Import Procedure Study for a European Transmission Device Manufacturer

The client, a European Transmission Device Manufacturer is in the process of setting up a WFOE in China for import and domestic sales to Chinese customers. However, the client had an urgent shipment request from one Chinese customer, and was therefore in need of support to understand the requirement of importing to China.

In response to this, ARC Consulting conducted a thorough study and provided answers to the client’s questions relating to the import procedure and legal entity setup timeline.

Chinese container port

The client had already obtained its business license for its Chinese subsidiary when they approached ARC Consulting, however, they still had 11 to 15 weeks to go before the subsidiary had a bank account opened and import & export license issued.

As sea shipments from Europe to China usually takes 6 to 8 weeks, the client would not be able to reach the delivery deadline if they waited for the Chinese entity to fully received all documents and licenses from the local Chinese authorities. Therefore, they had to find a solution to meet its customer’s request.

ARC Consulting collected data through desktop research as well as discussion with local government contacts by phone and face-to-face meetings.

The following fields were covered in the study:

  1. Requested documents and standard lead time of the all the sub-processes in the business registration process, including business registration, making red company chop, opening bank accounts, import & export license application (foreign trader filing, customs declaration registration, foreign exchange filing)
  2. Import duties and VAT for the goods related to their HS code
  3. Requested documents for import customs declaration for the goods under their HS code, and costs of using a third-party import agent
  4. Transfer pricing principle and methods

After verification and processing of the collected data, ARC Consulting produced a report to answer all of the client’s questions and to identify possible solutions to the issue.

ARC Consulting’s team concluded that the client is able to ship the goods before all the licenses are ready and meet its customer’ urgent timeline. Clear recommendations on how to conduct the sub-activities, such as bank account opening and import & export license application, simultaneously was provided to the client to speed up their process.

The team also provided the estimated costs of using a third-party import agent in the worst-case scenario, if the Chinese legal entity was not able to act as an importer by the time of arrival.

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