Establishment of a Wholly Foreign-Owned Enterprise in Xiamen and Compliance System Construction for a German Precision Manufacturing Company

Müller Precision GmbH of Germany plans to establish a wholly-owned subsidiary in Xiamen Torch Hi-Tech Industrial Development Zone for the R&D and production of high-precision automotive components, with a registered capital of 2000 million EUR. The project involves multiple legal matters, including review against the Foreign Investment Negative List, allocation of industrial land, environmental impact assessment approval, work visa processing for foreign executives, establishment of a Chinese employee labor contract system, registration of technology import contracts, and implementation of trade secret protection protocols. The client requires completion of all setup procedures and commencement of formal operations within 6 months.

1. Compliance review for industry access under the negative list management system following the implementation of the Foreign Investment Law; 2. Compliance design and tax optimization for technology transfer and intellectual property licensing agreements; 3. Coordination of work permits and social security contributions for foreign employees in China; 4. Dual compliance requirements under the EU GDPR and China's Personal Information Protection Law.

1. Assemble a bilingual Chinese-German legal team and conduct pre-coordination with Xiamen's Bureau of Commerce, Market Regulation Administration, and Tax Bureau to ensure seamless approval processes; 2. Design a dual-track structure of "technology licensing + technical services" to optimize withholding tax burdens on royalties; 3. Develop foreign employee hiring plans compliant with Chinese labor law while simultaneously processing work permits and residence permits for foreigners entering China; 4. Establish a cross-border data transfer security assessment mechanism to ensure data compliance in both China and the EU.

The project completed all establishment procedures in 5 months, two weeks ahead of schedule. The subsidiary successfully obtained its business license, foreign-invested enterprise filing receipt, customs import/export consignee qualifications, and all other required certificates. The labor employment system passed compliance review by the Xiamen Human Resources and Social Security Bureau, and the technology import contract was registered with the Ministry of Commerce. The company has officially commenced production and operations, achieving first-year annual output valued at 1.2 billion RMB. Clients highly praised the efficiency and professionalism of our legal services and have renewed the annual legal advisor contract.