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Upgrade to the New Business License, Five-in-One
Published on: 2017-08-11
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030Companies in China with soon-to-be outdated certification would be wise to put the Five-in-One business license amendment on their upcoming agenda.

China's Five-in-One system combines a business' tax registration certificate, organization code, business license, social security registration certificate, and statistical registration certificate into a single document with one social credit code. This has made setting up a business in China faster and easier for foreign investors.

Businesses without an integrated business license under the Three-in-One or Five-in-One system should now upgrade. The deadline for converting to Five-in-One certification is December 31, 2017. Beyond this date, all five certificates held by the company, now encompassed by the Five-in-One system, will be deemed as invalid and cancelled.

Companies who hold business licenses under the previous Three-in-One system, which did not include the social security registration and statistical registration certificates, need not worry. According to the State Council, companies registered under a Three-in-One business license will automatically have their information submitted to related departments for amendment. This means they do not need to submit any Five-in-One amendment applications.

Some regional disparities apply. For example, Liaoning and Jiangsu provinces have piloted a Six-in-One license in several counties, which also includes a company's seal carving approval certificate. Yangzhou prefecture city in Jiangsu is currently mulling the possibility of integrating a 'Twelve-in-One License'. Shenzhen and Zhejiang provinces both launched a Five-in-One license for WFOEs early when the Three-in-One license was first announced.

Despite these regional differences, the key requirement to have a combined business license and unified social credit code carries the same State Administration for Industry and Commerce (AIC) deadline. Notably, some local AICs, such as that of Shenzhen, have not separately issued deadlines. It is possible that some local officials will give very short notice before the reform is fully consolidated. It is therefore highly advisable for businesses to play it safe and amend their certification and license sooner rather than later to avoid being caught of guard.

Businesses in all areas are advised to employ the assistance of an advisor so as to successfully navigate local conditions. Amendment may be easier in some areas than in others, as local government departments often vary wildly in their ability to exchange information. This means that what could be a very simple amendment process in one city may turn out to be more complicated in another.

Many businesses may already have been required to change to the Five-in-One business license. For example, in Shanghai, businesses making changes to their registered information, such as their business scope, legal representatives etc. have already been required by the government to register for a Five-in-One business license. Businesses who have had their organization code expire within the last year have also been required to update their certification to be included under a Five-in-One license.

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