TT Talk - China opens doors to forwarders

From the end of this year, China's doors are fully opened to foreign investment in freight forwarding business, subject to satisfying capital requirements and other conditions. Companies will able to establish a presence in China, either in the form of joint ventures (JV) or wholly foreign-owned enterprises (WFOEs, providing that they:

a. have a minimum paid-up capital of USD1 million;

b. have at least five staff members must have more than three years of working experience in international freight forwarding industry or have obtained relevant qualifications;

c. have permanent office premises in China; and

d . are equipped with the necessary business facilities for communication, transportation, loading / unloading, packing etc.

These JVs or WFOEs are in turn able to set up their own branches across China if the following requirements are met:

a.. The JVs or WFOEs have been operating in China for at least one year;

b. All registered capital has been paid up;

c. . Payment of an additional paid-up capital of USD120,000 for each branch.

However it should be noted that in China the concept of "freight forwarding" has a narrow meaning, referring only to agency business, which is regulated by the Ministry of Commerce. If the company wishes to issue its own house bills of lading, it must register with another ministry (Ministry of Communications) and make a cash deposit of RMB800,000 (about USD100,000) as liability guarantee. A further RMB 200,000 deposit is required for each additional branch in China .