Nine departments provide support for “individual-to-enterprise” conversions: streamlining procedures and reducing costs.

  On July 3, the State Administration for Market Regulation and eight other departments issued the “Guiding Opinions on Promoting the Efficient Transformation of Individual Industrial and Commercial Households into Enterprises as a Single-Service Initiative and Strengthening Support and Assistance” (hereinafter referred to as the “Guiding Opinions”), further advancing the standardization, regularization, and facilitation of government services, supporting the transformation of individual industrial and commercial households into enterprises (hereinafter referred to as “individual-to-enterprise conversion”), and intensifying efforts to foster and assist such transitions.

  The Guiding Opinions stipulate that, while fully respecting the wishes of individual business households, efforts will be made to strengthen the integration of government service systems, providing unified, standardized, efficient, and convenient services for “individual-to‑enterprise” conversions. This will help enhance post‑conversion internal management and compliance awareness, and mitigate and resolve various risks. At the same time, greater support will be provided to foster the development of such conversions, effectively reducing conversion costs, enabling more individual business households to grow stronger and larger, and promoting high‑quality development of the private sector.

  Liu Xingguo, a specially appointed senior researcher at the All-China Federation of Industry and Commerce, told a reporter from the Economic Information Daily that streamlining the procedures for individual-to‑enterprise conversion and reducing associated costs will help encourage more eligible self-employed individuals to voluntarily transform into enterprises, thereby bringing them onto new growth tracks, opening up fresh avenues for expansion, and injecting new momentum into macroeconomic development.

  Liu Xingguo also pointed out that a key highlight of the “Guiding Opinions” is the establishment of a transitional period for individual-to‑enterprise conversions, during which existing management and incentive measures will remain in place and inclusive regulatory approaches will be implemented. “This not only helps alleviate the concerns of eligible self-employed individuals about making the transition, but also enables them to gradually adapt to the new regulatory requirements after converting to an enterprise.”

  Specifically, the Guiding Opinions propose streamlining the procedures for “individual-to‑enterprise” conversions. With regard to optimizing the registration process, the registration authority, upon application by the individual business operator, shall complete the “individual-to‑enterprise” registration either through a direct amendment or via one of two methods: “deregistration plus establishment.”

  In cases where an individual business is converted into a corporate entity through direct registration amendment, the registration authority shall process the amendment in accordance with the Regulations on the Registration and Administration of Individual Industrial and Commercial Households, continuing to use the original establishment date and unified social credit code of the individual business. The relevant registration files and annual reports, among other materials, shall be incorporated into the newly established enterprise and preserved. Where the requirements are met, the business name and its industry or operational characteristics may also be retained. If the original business premises remain unchanged and comply with the requirements for establishing a corporation, submission of proof of residential address may be waived.

  For entities undergoing conversion through the “deregistration plus establishment” approach, the registration authority shall, in accordance with the Regulations on Market Entity Registration and their Implementing Rules, process both the deregistration of the original individual business household and the registration of the newly established enterprise. Localities are encouraged to consolidate these two registration procedures into a single application, enabling applicants to complete all formalities by submitting a single set of documents.

  With regard to strengthening support and assistance for the transformation of individual businesses into enterprises, the Guiding Opinions stipulate that a tiered, differentiated approach to cultivation should be consistently applied. Market regulatory authorities are required to earnestly implement all measures for targeted, category‑specific support for individual business households, accurately assess their overall development trends, and pay particular attention to the willingness of “growth‑stage” and “development‑stage” individual businesses, as well as those classified as “renowned, specialized, high‑quality, and innovative,” to transition into corporate entities. Eligible individual business households shall be included in a dedicated database for “individual-to‑enterprise” transformation, subject to dynamic management, with timely policy briefings, public outreach, and follow-up services.

  The Guiding Opinions stipulate that a transitional period for the “individual-to‑enterprise” conversion will be explored. Relevant local authorities are encouraged to implement transitional management measures for such conversions, tailored to local conditions and applicable for a specified duration. For enterprises that undergo conversion through direct registration changes, the original invoice issuance quota shall, in principle, remain unchanged; if this quota proves insufficient, the enterprise may submit a request to the tax authorities for an increase. During the transitional period, the competent authorities of relevant industries will maintain existing regulatory and incentive mechanisms, adopt a tolerant yet prudent regulatory approach, and work to reduce the institutional transaction costs associated with the “individual-to‑enterprise” conversion.

  The “Guiding Opinions” also emphasize strict adherence to the principle of voluntariness. In promoting the “individual-to‑enterprise” transition, relevant departments at all levels must fully respect the wishes of individual business operators, advise them to pursue a “rational transformation,” and refrain from compelling or inducing them to convert into enterprises. No targets may be set regarding the number, growth rate, or proportion of such conversions, nor may tasks be imposed on grassroots units in any form. (Reporter: Wang Wenbo)

[Editor-in-charge: Jiao Peng]

Source: Economic Information Daily