With the Yangtze River running through the city, Wuhan was once nicknamed the “River City.” In addition to that, Wuhan has been referred to as the “Chicago of China” due to its role as a transportation hub for central China. It was even, at one point, described by way of an ancient Chinese idiom from the Ming Dynasty as “九省通衢 (jiu sheng tong qu),” which means that Wuhan is easily accessible by water or land from nine provinces – Sichuan, Shanxi, Henan, Hunan, Guizhou, Jiangxi, Anhui, Jiangsu and Hubei.
Today, Wuhan is still the transportation hub of Central China. In addition, being the capital of China’s Hubei Province, Wuhan is also recognized as the third largest technological and educational center in China behind Beijing and Shanghai. It is also a key finance, commerce, logistics and cultural center of Central China, even being colloquially known as the “golden key” to the enormous markets located within China’s central areas.
Economic Overview
In 2012, Wuhan’s GDP reached more than RMB800 billion and grew at an annual rate of 11.4 percent. Among which, RMB30.1 billion was contributed by the city’s primary industry, growing by 4.5 percent, and RMB387 billion was achieved by the city’s secondary industry, with a growth rate of 13.2 percent. The remaining RMB383.3 billion was earned by the city’s service sector which grew by 10 percent year-on-year.
Further, by the end of 2011, foreign investors from over 80 countries have made investments in Wuhan, among which 5,973 foreign-invested enterprises have been established in the city with actual foreign capital injections totaling US$22.45 billion. Also, by the end of 2011, there were a total of 84 Fortune 500 companies that have invested in Wuhan, including Wal-Mart, Shell, General Electric, General Motors, HSBC, Pepsi and IBM.
The average yearly disposable income in Wuhan is RMB23,738.09, which is expected to grow at an annual rate of about 14 percent. There are now 158 large and medium-sized supermarkets in the city in addition to a combined 4,128 convenience stores, department stores and specialty stores, making Wuhan an increasingly growing consumer market with great potential.
Administrative Divisions
As a city with more than 3,500 years of history, Wuhan was previously broken up into three notable towns in Chinese history: Wuchang, Hankou and Hanyang.
Wuchang was the political, educational and cultural center; Hankou was the transportation hub and commerce and trade center; and Hanyang was the cradle of China’s modern industry. Nowadays, despite the administrative divisions having been changed, the major functions of each area basically remain the same.
Currently, Wuhan is divided into two main parts: the central town and the new town. According to statistics released by the government of Wuhan in 2012, the GDP growth rates of the districts in Wuhan’s new town were higher than those the central town across the board. It is estimated by the municipal office of the National Development and Reform Commission that the development zones and the six districts in Wuhan’s new town will generate at least an extra RMB120 billion in 2013 over what it achieved in 2012, leading it to become a major support network for the industrial development of the city.
Town Districts
- Central Town: Jiang’an District, Jianghan District, Qiaokou District, Hanyang District, Wuchang District, Hongshan District, and Qingshan Distrcit
- New Town: East and West Lake District, Caidian District, Jiangxia District, Huangpi District, Xinzhou District, and Hannan District
Investment Opportunities
Wuhan offers many preferential policies for foreign investors, including tax incentives, discounted loan interest rates and government subsidies. The preferential policies are generally offered to enterprises in the manufacturing and service outsourcing industries, and are offered to all companies that set up their headquarters within the city.
Further, financial incentives are provided to foreign-invested banks, and the local government also provides for more convenient guidelines for imported talent and their families with regard to visa formalities and obtaining the relevant permits.
The city of Wuhan was founded primarily on the iron and steel, petrochemical, food, automobile, optoelectronics and equipment manufacturing industries. In addition to these pillar industries, Wuhan has further determined to put the development of its strategic emerging industries at the top of the priority list over the next few years.
Strategic emerging industries refer to:
- New information technology;
- Energy saving and environmental protection;
- New energy;
- Biotechnology;
- New materials;
- High-end equipment manufacturing; and
- New energy automobiles.
There are also over 400 enterprises that have been identified as high-tech enterprises in the city, among which 24 of them have realized annual outputs of over RMB1 billion.
Development Zones
Wuhan currently has three state-level development zones and three functional parks. They are as follows:
Development zones
- East Lake High-Tech Zone: focus on optoelectronic technique, biopharmaceuticals, energy and environmental protection
- Wuhan Economic & Technology Development Zone: focus on automotive and electronics industries
- Wuhan Airport Proximity Economic & Technology Development Zone: focus on food import, logistics and high-tech electromechanical products
- Wuhan New Port: functions as a shipping hub in the middle reaches of the Yangtze River
- Wuhan Chemical Industry Park: functions as a base and supply center for petrochemical products as well as a logistical base for chemical products
- Wuhan East Lake Scenic Area: functions as an ecotourism destination
To facilitate people who want to invest and
set up company in Wuhan, here is an introduction of Types of business presence
in China:
Before starting up a business in China, you
have to know what are the options. Foreign Investors generally establish a
business presence in China in one of five modes: Wholly Foreign Owned
Enterprise (WFOE);
Representative Office; Foreign Invested Partnership Enterprises (FIPE);
Joint Venture and Hong
Kong Holding Company.
Wholly
Foreign Owned Enterprise (WFOE) is a Limited liability company wholly owned by
the foreign investor. WFOE requires registered capital and it's liability
of equity , can generate income, pay tax in China and it's profit could be
repatriate back to investor's home country. Any enterprise in China which is
100 percent owned by a foreign company or companies can be called as WFOE. No.
minimum registered capital is required for WFOEs with scope of business of
consulting, Trading, retailing, information technology etc. in China. There are
minimum registered capital still required for some industries for instance:
Banking, Forwarding etc Since China still maintains foreign currency control
policy, it's still advisable to choose registered capital within RMB 100,000 ~
RMB 500,000 as the minimum registered capital. Companies can now determine how
much capital will be required to maintain their operations and must simply
ensure that they meet those targets within a period of 10 years.
Representative
Office (RO) is a Liaison Office of it's parent company. It requires no
registered capital. It's activities would be: product or service promotion,
market research of it's parent company's business, Quality Control liaison
office etc in China. RO generally is prohibited to generate any revenue nor
generating contracts with local businesses in China.
Joint
Venture (JV) is a Limited liability company formed between Chinese investor and
Foreign investor. The parties agree to create a entity by both contributing
equity, and they then share in the revenues, expenses, and control of the
enterprise. JV usually been used by foreign investor to engage the so called
restricted in areas such like: Education, Mining, Hospital etc.
Since
March 1, 2010, Measures of Establishment of Foreign Invested Partnership
Enterprises (FIPE) in China is taking effect. The regulation, which take
effect since March 1, 2010, are known as the Administrative Measures for the
Establishment of Partnership Enterprise in China by Foreign Enterprises or
Individuals. There's no required minimum registered capital for a Foreign
Invested Partnership Enterprise (FIPE) in Shanghai, Beijing, Wuhan, Hangzhou
and rest cities of China
Hong
Kong Company usually been used as a Special Purpose vehicle (SPV) to invest
Mainland China. Hong Kong is one of the quickest locations to Incorporate a
business. Although a HK company is not a legal entity in Mainland China
(MainlandChina and Hong Kong, See Wiki 1 country, 2 systems), lots foreign
investors, especially investors from Europe and North America still chose to
setting up a Hong Kong company as SPV to invest China.
After China's entry to WTO, most industries
in China welcome foreign investment, WFOE
setting up in China becomes the first option of foreign investment's entity
structures instead of Rep. Office setting up in China At the mean time, for
tax purpose, effective licensing system etc more and more investors use Hong
Kong as the holding company to invest China mainland, using this offshore
company to hold their operations in China.
Business set-up in Wuhan is a big project
by itself, which requires financial and time commitments, business management
knowledge and China expertise. Identifying a competent agent to manage the
complex process will be a cost and time effective way to avoid potential
pitfalls
Since 2006, Tommy China
Business Consulting has been focusing on consulting services for our
clients to invest in Wuhan China. We are specialized in establishment of wholly
foreign owned enterprises (WFOEs), setting up of offshore companies, trading
services,
tax minimization, Assist in obtaining government approvals and certificates
for running business, negotiate and draft various legal documents provide
legal advice, negotiate government officer for Land acquisition. Advising
on formation of WOFE and business structures, managing and controlling WOFE in
Wuhan China, drafting privacy policies and structuring commercial transactions
TCBC will manage all aspects of
incorporation to get you a business license in Wuhan China. We offer a range of
company formation services including helping you to set up:
-Wholly Foreign Owned Enterprises (WFOE )
-Joint Ventures (Equity/Co-operative)
-Foreign Invested Partnership Enterprises
(FIPE)
Please visit:http://www.tommyconsulting.com/CorporateFormation.html
Email: tomlee@tommyconsulting.com, Skype:
tomleeli
WhatSapp/Wechat/Cell Phone: +86 18926401128
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