What is the business scope?
The business scope is a list of business activities that the Foreign Investment Enterprise will carry out in China. The business activities list should state clearly during the registration. For the classification purpose, the major business activities will define the overall nature of the Foreign Investment Enterprise. In fact, the type of invoices issued and the applicable taxes for example.
How to draft the business scope for a company?
The business scope should be precise, leave no room for interpretation. Also, the list should in compliance with the restrictions provided in the Negative List. An unclear and vague business scope can lead either to rejection by State Administration for Industry and Commerce. Or the incorrect classification of the industry of an enterprise. As a consequence, the Local Tax Bureau may refuse to process the Foreign Investment Enterprise registration.
Think deep, you should have a clear picture about your own business you wanted to set up in China. For example, what are you going to sell? What kinds of commodities? What kinds of services you are going to provide? Or what about your business development?
You may think you should put as many numbers of item in your business scope as possible. However, your enterprise may involve difference type of tax applicable. Therefore, you need to consider your recent business situation and your further business development plan.
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You may want to read: DIFFERENCES BETWEEN LOCAL ENTERPRISE & FOREIGN ENTERPRISE IN CHINA