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- What are the basic requirements for incorporating a company in China?
To incorporate a company in China, you need:
- Reserved Specific Company Name,
- Registered Office Address
- Registered capital of the company
- Details of Directors including chairman and MD
- Details of Shareholders
- Legal Representative in China
- Prepare Legal documentation
- Business Scope.
- Business License
- Company stamp
- Tax registration
- Registration with Other Authorities
- What are the minimum and maximum number of directors and shareholders required?
- Number of Directors: 3 to 13 directors
- Number of Shareholders: 1 to 50
- What are the documents required to incorporate a company in China?
The various documents to apply for approval certificate:
- ID of the legal representative
- Shareholder and director information (Email, Mobile No, Address etc.)
- Notary documents of the shareholders and director
- Articles of Association (AOA) and Memorandum of Association (MOA)
- Feasibility study along with budget
- Proof of registered office (Lease agreement etc.)
- Business plan
- Managerial structure and List of controlling person.
- Other documents as required by local authorities\
Additionally, you will also require business license and also need to comply with local registration requirements.
Also, the specific requirements can vary depending on the type of company you wish to establish (e.g., Wholly Foreign-Owned Enterprise (WFOE), Joint Venture, or Representative Office).
- What type of company should I choose for my business in China as a foreign investor?
The choice of company type depends on your business goals and Operational needs. A foreign investor interested in doing business can incorporate company by forming:
- Wholly Foreign-Owned Enterprise (WFOE): allows full foreign ownership and control but requires more capital.
- Joint Venture (JV): involves a partnership with a local Chinese entity and can be beneficial for businesses needing local market access. Parties merge their resources and expertise to reduce the exposure of risks from other businesses and to create new business projects or activities.
- Representative Office: is a lower-cost option for market research and liaison but cannot directly engage in profit-making activities.
- Foreign Invested Partnership Enterprise (FIPE): involves establishing a partnership by two or more foreign enterprise or individuals.
Wholly Foreign Owned entity is the preferred option by many foreign investors for its flexibility in terms of location and ownership.
- What are the benefits of incorporating Wholly Foreign Owned Entity?
- All directors, partners or shareholders can be foreigner and No Chinese director, partner or shareholder required
- You can have total ownership/control
- Better protection of Intellectual Property
- Has its own legal status
- Flexibility & autonomy in conducting business.
- Authority for incorporation of company in China?
State administration for Market regulation (SAMR)(Previous authority State Administration
for Industry and Commerce(SAIC) merged into SAMR) is the administrative organization in
charge of company incorporation in China.
- Do you help with choosing and registering a Company Name in China?
We can help by checking with the State administration for Market regulation (SAMR)
whether the Chosen Company name can be registered or not.
- What is the minimum Share capital requirement?
No minimum share capital is required for starting a company in China. It's up to foreign
individual, business can be started with 1,00,000 RMB.
- How long does it take to complete the incorporation process?
- The incorporation process in China generally takes around 3 to 9 months. This timeline includes name approval, document preparation, registration with the State administration for Market regulation (SAMR), obtaining business licenses, and registering with tax authorities.
- The exact time may vary depending on the complexity of your business and the efficiency of local authorities.
- What are the costs associated with incorporating a company in China?
The complete process of Company Registration also includes ancillary service fees. So, a
correct cost estimate cannot be provided.
Costs for incorporation of company in China includes:
- registration fees,
- legal and consulting fees,
- office rental,
- capital requirements.
Additional costs might include expenses for obtaining necessary licenses, permits, and
setting up a local bank account. The total cost can vary significantly based on the type of
company and specific requirements.
- Do I need a local partner to start a business in China?
It depends on the type of entity you want to incorporate.
- For a Wholly Foreign-Owned Enterprise (WFOE), you do not need a local partner as you have full control.
- However, for Joint Ventures, a local partner is required.
- If you're setting up a Representative Office, you do not need a local partner but must comply with specific restrictions on the scope of activities.
- Is opening a Chinese Bank account required for setting up business in the mainland?
Yes, it is required for foreign investors to open a Chinese Bank account.
- What are the tax implications for my business in China?
China has a Value-Added Tax (VAT) system ranging from 3% to 13% and corporate income
tax of 25% on company's profit, with rates varying depending on your business's industry
and size. You may also be subject to local taxes and fees.
Additionally, transaction tax on turnover and custom duty also applicable depending on the business of the company.
- What are the benefit of incorporating company in China?
- Economic stability
- Access to China Market
- Lower Labor Cost
- Government Incentives like Subsidies in Economic Development Zones
- Sophisticated infrastructure
- How do I handle compliance and regulatory requirements after incorporation?
After incorporation, you'll need to comply with ongoing regulatory requirements, including tax filings, annual audits, and updates to business licenses.
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