China Business Registration – An Introduction
Before doing the company registration in China one needs to clearly understand the Chinese laws and business procedure.
What are the types of Company which can be registered in China?
Types of a company that can be established in China are as following:
1. Wholly Foreign Owned Enterprise
2. Representative offices in China
3. Foreign Invested Commercial Enterprise
4. Joint Venture Company registration in China
5. State owned enterprise in china
6. Private enterprise
7. Individually owned
A brief description of types of company in China:
1. Wholly Foreign Owned Enterprises (WFOEs)
a. WFOEs are the companies with limited liability companies, governed by Chinese Company Law.
b. Shareholding in such companies comprises of completely foreign individuals or entities and only International business enterprises or foreign individuals (Citizen) are the.
c. Liability is to the extent of the amount of registered capital of the company. Capital means and includes assets, cash injection, and equipment,
d. No paid up capital is required for foreign investors to establish a Consulting, Trading or Information Technology business etc. in China.
Minimum Registered Capital Requirement is as given below in table:
|
Sr. No.
|
WFOE
|
Amount in RMBS
|
|
1.
|
Consulting
|
100000
|
|
2.
|
Trading
|
500000
|
|
3.
|
Manufacturer
|
500000
|
2. Foreign Invested Commercial Enterprise
Foreign Invested Commercial Enterprises (FICEs): The purpose of such FICEs is as following:
a. Retailing,
b. Wholesaling,
c. Franchising or
d. Trading businesses in China.
Its registration is quite faster and a good platform for the foreign investor to conduct trading activities.
The Minimum Registered Capital Requirement is as given below in table:
|
Sr. No.
|
FICE
|
Amount in RMBS
|
|
1.
|
Wholesale FICE
|
500000
|
|
2.
|
Retail FICE
|
300000
|
No minimum capital requirement for Representative Offices in China.
Representative Offices are representing the parent companies in China and used for market research activity in China to measure the depth of the Chinese Market, to consider the future investment scope. These representative offices work in research related activity and are not allowed to be engaged in any business for a profitable business. They work in illegal way.
Representative Offices need to submit a monthly report to the Tax Administration Department in China with regard to taxes paid on expenses (flat 10% rate).
4. Joint Ventures Company registration in China
Joint Ventures in China are of two types i.e. Equity Joint Ventures and Cooperative Joint Ventures
In Joint-Venture the domestic entity and international entity work together and is controlled by both foreign and Chinese partners and mostly the purpose is a transfer of technology.
5. SOE (State-owned enterprise)
The State Owned Enterprises are set up to operate in specific key sectors and are considered to be of strategic importance by the government, example aerospace, telecommunications or electric power.
6. Private Enterprise
It is a company registered by individual/s or companies, wherein the government ownership is zero. It is considered the most popular form of company registration in China, has impacted the economy of China positively.
7. Individually Owned
The Simplest form of company formation China is individually owned one and is usually small companies. The individual should be the one who must be a Chinese national.
What will be the procedure for Company Registration in China?
Here the procedure of Company Registration in China -
1. Check for name availability of the new proposed company pursuant to the Chinese Company law.
2. The applicant needs to submit an application for establishment registration to the relevant company/business registration authority.
3. Once submitted along with the required documents, it shall be scrutinized by the authority and if found opt the Business license shall be granted.
4. The company registration authorities provide the inquiry services and status can be checked through putting up the enquiry.
5. The date of issuance of the business license for a company will be the date of establishment of the company.
6. The business license of a company shall state the following information:
a. The name,
b. Domicile,
c. Registered capital,
d. Business scope,
e. and the name of the legal representative, etc. of the company.
What we provide:
a. Full Legal setup procedures
b. Company name approval
c. Certificates of Incorporation
d. Company Stamps
e. Preparation of the Company Business scope and many more.
The expert team of Enterslice can provide end to end solution for the registration of business in China.
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