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2022-06-22 |
【4 mins Read】OneStart Weekly - China Company Formation

Company formation (Global) – China

China has now been ranked as the top 5 largest economy among the world. Being well-known as the world’s factory before, China has slowly migrated towards a new reform of its economy structure, and started to build their new financial hub with top-edge financial services, advance digital technology, economics analysis and cultural hub. After China becomes the member of World Trade Organization (WTO), more Foreign-owned Enterprises in the area of business service, consulting, software development or trading companies are established in China. With its growing competitiveness, China has been a very popular investment choice in foreign investors. Purchasing power of the Chinese has slowly become well-known among the world, as they could invest or purchase high quality tailored designer pieces, and be shopping and cruising the globe. As a result, retail industry is one of the most popular type of business with foreign investments.

 

The opportunities offered in the Chinese market is such luring, that despite its strict limitation on foreign-owned enterprises, many are still seeking a way into the local Chinese market. Hon Kong being one of the administrative regions, could grant Hong Kong investors a fast-ticket into China. Most of China’s most profitable companies are all state companies, but recently there are more private companies that could make a fortune in the competitive China market, for example Alibaba.

Running a foreign-owned enterprises in China, allow you to do business formally in China, without difficulties and limitations as in your local Hong Kong office. Also, when you have incorporated your Chinese company, you can open RMB invoices and use RMB as revenue. Your RMB profit can be converted into USD, which HKD is linked to, and be remitted to overseas parent company. Such benefit is only registering a foreign-owned company in China, via Hong Kong can offer you.

 

We believe that the advantages of making business in China do not need further commenting on. So now, let’s get to know how to incorporate in China. As regulated by the Chinese government, foreign-owned enterprises can only be allowed to carry business within its allowed business scope, which is stated on its business certificate. There are also lists of different requirements you will need to follow.

The basic requirements for setting up a foreign company in China, is that your future Chinese company is required to have (1) an actual address, (2) at least one shareholder, (3) at least one director, and (4) at least one supervisor. The appointed director, if only one, would serve as the legal representative of your company. There are no citizenship restrictions for the shareholders of your company, but the appointed supervisor could not be concurrently appointed as a director or legal representative of your Chinese company.

 

Unlike most other countries, China has set different capital requirements for different business sectors, as well as the business type. But basically, the registered requirements for setting up a Chinese company, could be concluded as follows:

l   Trade: RMB500,000 (wholesale), RMB300,000 (retail)

l   International Freight Forwarders: RMB5,000,000 (Sea), RMB3,000,000 (Air), RMB2,000,000 (Land)

l   Software Development, Consulting, Design: RMB100,000

 

Apart from a Chinese company constitutional requirements and capital requirements, when setting up a Chinese company, there are also further regulations on the information you will be required to file:

l   Identity card of shareholders, directors and supervisors (2 copies), subject to Chinese notary

l   Shareholder’s bank credit certificate (additional Chinese translation required)

l   Original Office Lease

 

If you own another Chinese limited company, you will laso have to prepare the following Chinese notarization in 2 copies:

l   Certificate of Incorporation

l   Last year’s business registration

l   Annual Return of the Latest Year

 

Although there might seem to be a lot of different regulations, and might seem to be too complicated and start to intimidate you, you don’t have to panic! OneStart Business Centre can help you with the registration process! We can assure you with a smoother process over registration of your Chinese company. Out helpful consultant could help you to check and prepare documents, as well as to make sure there is no left-out boxes you haven’t finish preparing for.

 

At OneStart Business Centre, we can offer you our help in mainly 3 areas:

(1) registration process and Chinese notary preparation,

(2) provision of address for registration, and

(3) preparation of accounting and tax returns.

These are all formal documents as requested by the Chinese government. Of course, documents can be prepared by your own team, however, China has stiffly strict regulations on received documents. There might be different standards on information to be provided on the documents among different countries. Therefore, as always, OneStart Business Centre suggest putting your trust in professional hands. OneStart Business Centre has years of expert experience in aiding our clients to build and flourish in their business. We have professional teams to handle all sort of services. Company formation in China might sounds troublesome, but with the help of professionals, it could be as easy as brewing yourself a cup of coffee.

 

China is the expected to be one of superpowers in the global financial market. If you make your application now, your Chinese company could be incorporated in around 30 working days. Because of the strict reviewing by the government authorities, there might be a possible delay. So if you wish to form your own Chinese company, and take this golden chance into the next business highway, act now!

Interested in OneStart Business Centre’s Company Formation Services? Phone in to our hotline 3575 6888 or WhatsApp our helpful consultants!