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Company Regsitration in China
company registration
in China
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COMPANY REGISTRATION IN CHINA
Going through the procedure of the Company
registration in china, you will realize that it is
not at all simple to incorporate a company in
China. So before deciding to incorporate a
company in China you need to consider the
options, whether it is absolutely necessary to
incorporate a company, or your project can be
completed via an Umbrella company.
Umbrella Company is an entity in China that
works for and on behalf of any foreign entity or
individual who wants to do some business in
China. It manages employees and your work on
your behalf. Usually it takes care of all your
sales, marketing, import-export or any other
kind of consultant needs. It takes care of
recruitment, salaries, accounts etc.
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In order to start a business in China in a less expensive
manner, to start it as an umbrella company is the best
option. Once you set your business on its feet, you can
certainly set up your own company. However, this
arrangement will only work if the business you are
starting is of service. If the business concerned is of any
other nature, you got to start your own company in China
or get into a joint venture.
There are four major forms of business entity to register a
business in China
• Wholly Foreign Owned Enterprise
• Foreign Invested Commercial Enterprise
• Representative offices in China
• Joint Venture Company registration in China
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Wholly Foreign Owned Enterprises (WFOEs)
Wholly Foreign Owned Enterprises (WFOEs) are in the form of limited liability
companies, established under Chinese Company Law. It is a kind of organization where
complete shareholding is of foreign individuals or entities. Only International business
enterprises or foreign individuals (Citizen) can be shareholders in a Wholly Foreign
Owned Enterprise. Liability in a WFOEis up tothe amount of registered capital injected
into the business. Although the capitalmay in fact be a combination of two assets, cash
injection and equipment, the total value of these also represents the extent of the
WFOE’s liability.
The international investors wishing to manufacture, process, or assemble in China
consider WFOEs the best investment vehicle. To establish a WFOE in China you don’t
need a Chinese partner.No paid up capital is required for foreign investors to establish a
Consulting, Trading or Information Technology business etc. in China. Also, there is no
need of large amounts of registered capital to fund – Manufacture WFOEs.
Minimum Registered Capital Requirement
• Consulting WFOE RMB 100,000
• Trading WFOE RMB 500,000
• Manufacturer WFOE RMB 500,000
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Foreign Invested Commercial Enterprise
Foreign Invested Commercial Enterprises (FICEs) are the
establishments for the purpose of retailing, wholesaling, franchising
or trading businesses in China. The regulation for registering a
Foreign Invested Commercial Enterprise are comparatively quicker
and enlarge the playground available for the foreign investor to
conduct trading activities.
The minimum registered capital required
Wholesale FICE RMB 500,000.
Retail FICE RMB 300,000.
Suggested registered capital
Wholesale FICE > RMB 1,000,000
Retail FICE > RMB 1,000,000
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Representative Offices in China
Representative Offices are not allowed to be engaged in any business for profit, sign, contracts
on behalf of the parent enterprise, receive revenue in China, issue official tax invoices, buy
property or import production equipment.
China Tax Information
All expenses incurred by Representative Offices(including staff salary and rental) are taxable in
China. Tax rate is approximately 10% of the total amount.
Representative Offices need to submit a monthly report to the Tax Administration Department in
China.
Staff Recruitment
Representative Offices are not allowed to recruit local staff in China by themselves. These offices
need to turn to an HR agents appointed by China government for the purpose of recruitment.
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Joint Ventures Company registration in china
Joint Ventures in China are of two types
• Equity Joint Ventures
• Cooperative Joint Ventures
Joint-Venture, usually is an arrangement where both the domestic
entity and international entity work together. It is type of a
company controlled by both foreign and Chinese partners.
A Joint-Venture usually is created for the purpose transfer of
technology. Given the very usual problems of infringement
associated with intellectual property that plagues China, foreign
companies who intend to make or sell high value products (such as
a patented product or software), often prefer to opt for a WFOE.
In case, that the international entity wishes to operate in a
“restricted” industrial sector, a Joint-Venture is the only option.
WFOE and Joint-Venture are very similar in nature.
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1. China’s Labor Law, allows enterprises to decide for themselves the timing and means of
recruiting staff as well as the relevant requirements and number.
2. If a company in China hires a foreign employee, the company needs to register this employee
with the local social security authority within 30 days of the employee receiving their work permit.
3. China’s corporate tax rates range from15% to 25%. (The rate depends on the jurisdiction where
the company is registered and the industry sector that a company is engaged in). All the
enterprises in China are required to report to the Tax Administration Department monthly, quarterly
and annually.
4. Any limited companies in China shall submit an annual audit report to the concerned authorities
periodically or as may be prescribed. The annual audit cost is approximately RMB 6,000. If the
Annual Audit Report is not submitted in a timely manner the company in default will be subject to a
fine.
5. Profit repatriation is freely allowed by China Government. It allows Foreign Invested Enterprises
to remit their profits out of the country and such remittances do not require any prior approval of
the State Administration of Foreign Exchange (SAFE). However, dividends cannot be distributed and
repatriated overseas if the losses of previous years have not been covered.
6. The Business duration for a manufacturing WFOE is typical of 15 to 30 years. This duration of
WFOE can be extended by obtaining prior approval from the government. The projects in which the
amount of investment is large, or the construction period is long and the return on investment is
low, projects producing internationally competitive products, or the projects producing sophisticated
products using advanced or key technology provided by the foreign partner, for the term of WFOE
may be extended to 50 years.
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PROCESS OF COMPANY REGISTRATION IN CHINA
To register a company in China, the applicant needs to
submit an application for establishment registration to the
relevant company registration authority in accordance with
the Chinese Company law. If the application filed satisfies
the establishment conditions provided for herein, the
company registration authority shall register the proposed
entity as either a limited liability company or a company
limited by shares; if the field application does not satisfy
the required conditions, the proposed entity shall not be
registered as a limited liability company or a company
limited by shares.
Where laws or administrative regulations specify that the
establishment of a company shall be subject to approval,
the relevant approval formalities shall be gone through in
accordance with the law prior to the registration of the
company.
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The general public may apply to company registration
authorities to inquire on company registration matters, and
company registration authorities shall provide the inquiry
services.
Company registration authorities shall issue business licenses of
companies to the companies established under the law. The date
of issuance of the business license for a company shall be the
date of establishment of the company.
The business license of a company shall state therein such
matters as the name, domicile, registered capital, business
scope, and the name of the legal representative, etc. of the
company.
Where any of the matters stated in the business license of a
company is changed, the company shall go through the
formalities for change of registration in accordance with the law,
and the relevant company registration authority shall issue new
business license to replace the old one.
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SHANGHAI FREE TRADE ZONE
COMPANY REGISTRATION
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SHANGHAI FREE TRADE ZONE
SFTZ and the other free trade zones may have unique policies in place that might be expanded
outside the zones. Shanghai Free Trade Zone Company Formation is a negative list approach and
faster company registration for foreign direct investment.
The Zone
Now the Shanghai Free Trade Zone covers 120 square kilometers and as of now is composed of
seven bonded zones 1) Waigaoqiao Free Trade Zone. 2) Waigaoqiao Free Trade Logistics Park. 3)
Yangshan Free Trade Port Area: deep-water port, the major component of Shanghai Port. 4)
Pudong Airport Comprehensive Free Trade Zone. 5) Lujiazui Finance and Trade Development Zone:
a financial services hub. 6) Jinqiao Economic and Technological Development Zone: an advanced
manufacturer services area 7) Zhangjiang High-tech Industrial Development Zone: an area
specializing in high-tech manufacturing and medical services.
100% Ownership
Wholly Foreign Owned Enterprise may be capitalized by foreign investors and operated without
the need for Chinese partners or employees. It will provide you with greater control over your
business’s operations, revenue and profit targets. A WOFE is a favorable option for both
individuals or overseas company that wants to enter the Chinese market.
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Advantages of Shanghai Free Trade Zone
• No Registered Capital needed
• Virtual Address Provided
• Fast Set-up
• Fully Bonded Zone
• No restriction Money Transfer
• Best Zone for Export
• VAT returned in 30 days
• Registration takes only 20 days
• Corporation China – Official Partner
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Encouraged Industry Fields
• Shipping Industry
• Financial Service
• Biological Medicine
• Medical Apparatus
• Cosmetics
• Commerce and Trade Service Industry
• Professional Service Industry
• Beverage & Liquor
• Social Service Industry
• Export Trading Industry
• Media Industry
• Automobile
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Shanghai Free Trade Zone
Registration
We take care of the complete China Company
Registration process
• Full Legal setup procedures
• Company name approval
• Certificates of Incorporation
• Company Stamps and Chops
• Company Business scope
Post-incorporation company setup
• Company Bank Account
• Tax & Accounting
• Full Back office support
• Register for Tax Invoice ( Fapioa Machine)
• China Payroll Service
• Applying for China work Visa
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DOCUMENTATION TYPES
SET UP AS AN SET UP AS A SET UP AS A
INDIVIDUAL HONGKONG COMPANY
COMPANY
• A scan of your passport • Notarized copy of Passport of • A Passport Scan of the Director(s)
Director and Company
• A Personal Bank Reference Letter Registration Certificate • A Certificate of Company
incorporation
• Choose a name for the your China • Hong Kong Company Registration
WFOE Certificate • A Company Bank Reference Letter –
stating no bad record
• Choose a location for the company • Hong Kong Company Bank
in China Reference Letter • All Documents need to be notarized
by the Chinese Embassy
• The Hong Kong Company will
then be the Holding Company for
the WFOE We can set up a Hong
Kong Company in about 5 days
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THANK YOU
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www.licensehub.in we are providing more than 150 license and approval services on one platform. Contact Paras Mittal, Mb 9971002715.
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