Company Formation in China


China is attractive to international investors due to its connections to powerful financial endeavors. Businesses from abroad aim to generate profile profits in every industry of this country. If you are an investor with plans of company formation China, there are various structures you can choose from depending on what your business requires.

Types of companies for company formation in China

Company Formation in China

Depending on the structure you want and the operations involved, your success will depend on the business entity. You can set-up your company with the following structure as Sole-Proprietorship which recommended for smaller businesses in China with simple business structures. Representative Offices recommended for those who want to test the market for now. Private Enterprises recommended for beginners and can change to public companies when requirements are met. Partnerships recommended for medium to small-size entrepreneurs. Joint-Venture Companies perfect for more experienced business owners in China. WFOE or Wholly-Foreign-Owned Enterprises is the most popular of all Chinese business structures, and for good reason. The main WFOEs in China include:

China Trading WFOE creates exports and imports of various services and goods;

China Food & Beverage WFOE – various beverage and food businesses;

China Technology WFOE performs technological activities;

China Consulting Services WFOE is for consultation services in business, technology, management, and other fields;

China Manufacturing WFOE is about activities in the production field and selling various types of goods.

Company Formation in China

Specificity of company formation

When you set up a WFOE business, this entails opening an LLC by share-owners and foreign investors. Except for the businesses such as marine charting and geodetic surveys that Chinese authorities monopolize, China WFOE is allowed in almost all other industries. Depending on the sector and activities, a China WFOE can be opened rather quickly. This includes specific documents you need to submit according to enforced rules. For foreigners, WFOE represents the regular form of business for foreigners seeking to open a business in China. You will need to submit the following requirements if you want to incorporate your business in China:

Verify your business name with the in-charge authorities;

Provide your personal and business information such as your name, country of residence and nationality;

List your business activities;

Appoint a board of managers composed of Chinese national, foreigners or both;

Create a feasibility report for your business;

Provide the capital minimal share in a bank in China. This is not required in free-trade zones;

Apply for the appropriate license for business;

Verify the tax system and register your business for tax purposes in China.

When you attempt to do all these steps yourself, it may take more time than usual, especially if you have never been to China in the past. To make the process of getting a business permit faster, our representatives can incorporate your company and can offer you all the assistance you need to register your business in China. Private Financial Services can help you through the process of fulfilling all the requirements and getting all the required business permits you need to open your business in China.

Company Formation in China

Process of Company Formation in China

There are a few steps to take and requirements to fulfill in order for you to open a WFOE Company in China. Also known as WFOEs, Wholly-Foreign-Owned Enterprises can be established easily by foreign investors. Follow these steps to register your business in China using the WFOE structure:

Decide on the name of your business. Make it official and valid with the Industry and Commerce State Administration of the People’s Republic of China;

Appoint the board of managers for your China WFOE and appoint a legal representative;

Create a mandatory feasibility report, which is a requirement for business investors in China;

Open an account in the bank with the minimum deposit of share capital amounting to RMB30,000;

Apply for the required permits and licenses for your future activities in the country;

Register for social contributions and tax purposes in China.

Company Formation in China

Legal system

For the most part, the business laws in China require foreign investors to have business permits and licenses. Just like many other countries, licenses and special permits in China are required to open a business or a company. For the manufacturing or retail sectors, for example, there are mandatory requirements. You will need to apply for a special permit or license especially when you open an import and export business as an overseas investor. Keep in mind that specific licenses may be required for opening telecommunications companies. In China construction is important and many foreigners have companies in this field. Specific requirements are necessary for the automotive sectors. In China, selling cars requires registering and operating a joint-venture and for this type of structure, foreign investors will need a Chinese partner.

Our team of company incorporation agents in China has years of experience with helping and assisting foreign investors in company formation in China. Our team of agents can help you not only in setting up your company in China but we can also act as your representatives when you need to:

Verify and test the market before you open your company;

Perform various marketing research in the selected field of business.

Sign contracts and negotiate terms in the name of the parent company;

Develop future collaborations with business persons in China;

If company formation in China seems to be too complicated for you, as alternative, company in Hong Kong might be a good alternative.

When you are seriously considering opening up a partner company in China, look no further. Our team of agents has enough trusted experience to get you all the right permits, licenses and help you fulfill requirements in the soonest possible time to get your company up and running so you can begin your profitable operations with confidence.

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