After the progression of China’s “Three-in-One” Reform in October 2015 incorporating the business license, organization code certificate and tax registration certificate into one integrated business license (one certificate with one unified code), and the updated to “Five-in-One” policy (October 2017), the “all-in-one” process now stands fully implemented as of 31 December 2017.
Prior to “Three-in-One”, the establishing of a company involved obtaining several licenses from various government bureaus via a one-by-one process. The “Five-in-One” reform integrates the five requisite certificates — business license, tax registration certificate, organization code certificate, social security registration, statistics registration certificate — into one license with a unified social credit code. Needless to say, “Five-in-One” is a welcome advance in company incorporation.
The national all-in-one online system processes applicant documentation and the issuance of an electronic business license with the new 18-digit single social credit code in one fell swoop. What’s more, its digitalization allows for the license to be interoperable among all relevant departments. Among these includes the key administrative bodies, such as Administration for Industry and Commerce (“AIC”), State Administration of Taxation, the State Bureau of Quality and Technical Supervision (“QTS”), Ministry of Human Resources and Social Security and the National Bureau of Statistics of the People’s Republic of China (NBS).
Companies under the old system were required to update to the “Five-in-One” license before the transfer period expired, which for Shanghai was 31 December 2017, while the Beijing deadline stands as 31 December 2020. Varying deadlines have been established by local AICs and according to local policy. For those not meeting the transfer deadline, they run the risk of their separate certificates being invalidated.
We note that in some cases, local authorizes may have the autonomy to amend the policy, which may lead to a variation in implementation. For instance, the Hangzhou AIC operates a “1+N”: integrating the business license and a maximum of 22 certificates into one unified social credit code. Therefore, for those still holding old certificates, it is advisable to follow local policy carefully or enlist an experienced advisor to ensure compliance with the new regulations.
The “Five-in-One” reforms improve information access, streamline processes and procedures, and provide convenient and efficient services for companies. Although, as the reforms enable information to be shared and accessed across governmental bureaus, companies should, as a best practice measure, ensure all business operations are fully compliant with Chinese corporate management regulations and laws.
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