Company Formation and Incorporation in Northern China

As China is one of the largest markets in the world by the size of its population and also a great place for setting up the business by foreigners. The process of establishing a business in China is very complex and time-consuming because of inconsistent regulations, restrictions to foreign industries in certain specified industries, therefore, it is compulsory for the applicant before investing in China to consider the options whether it is necessary to establish their or it can be done through an Umbrella company

In China the business can be set up in form of four entities as described below:

Wholly Foreign Owned Enterprise: It is a kind of entity which is established in the form of limited liability companies under the regulatory framework of Chinese Company Law. In this form of organization 100% shareholding is owned by Foreign Individuals or entities.

Foreign Invested Commercial Enterprise – These kinds of the establishment are mainly for the purpose of wholesaling, franchising or trading business in China. The regulations for registering a business entity under this form is quite simpler in comparison to others.

Representative offices in China – The Representative office is the one that represents the parent company in China. In the form of establishing this kind of entity, there is no need, to comply with any registered capital requirement. It is basically, engaged in non- profit-making activities like market research, publicity, sales, and service activity.

Joint Venture Company Registration in China – It is a form of entity which is created through a partnership between foreign and Chinese investors in which they agree to share profit, losses, and management with their mutual concern. There are two forms of joint ventures in China i.e. Equity Joint Ventures and Cooperative Joint Ventures.

The process of Company Registration in China:

The foremost requirement, to get registered an establishment in China is to file an application with the relevant Company registration authority under the framework of Chinese law. If the company registration authority is satisfied that the application is as per the required norms, then they registered it in either as a form of limited liability company or company limited by shares.

As if any, prior approval is required as per laws or administrative regulations then it must be before getting to be registered.

In case, if the general public applies to company registration authorities to inquire on company registration matters, the company registration authorities are obliged to provide inquiry services.

Once, Procedure of Company Incorporation in China authorities are satisfied in itself is respect of application then, they issue business licenses of companies to the concerned company. The date of issuance of the business license for a company shall be the date of establishment of the company.

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