Company Formation and Registration in China

Company Formation in China

Law & Trust International offer our clients, the services of incorporating, formating and registering a company in such cities ofPeople’s Republic of China (PRC): Beijing, Shanghai, Guangzhou, Shenzhen, Dongguan, Hangzhou, NanJing, Qingdao, Suzhou. Our team of lawyers is ready to assist you with any documentation (collection and preparation) processes, provide full legal support for you, the client, and post registration/incorporation services for the company.

The Incorporation process of a new company in China (PRC) may sometimes delayed due to the need to obtain permits for particular activities from the Chamber and Ministry of Commerce (MOFCOM) in China.

In some cases, registration of a company in the People’s Republic of China (PRC) can take up to a year with the information concerning the cost of maintaining the procedure and amount payable to the state duly specified by contacting our company. Our Lawyers make a detailed cost estimate for you, including all the details up to subsequent accounting and tax audits. The final cost depends on the specific region of the company's registration in China (PRC), the number of founders and other various factors.

Advantages of Company Formation in China

Below are some of the reasons why you should think about starting a company in the People’s Republic of China (PRC):

• Production of goods or provision of services and sale to the local target audience. Higher sales in China as the local market (consumers) get a boost  of being the world’s most populous nation and the second largest economy.
• Sale of goods or services produced abroad to local residents.
• Importation of goods of any nature from other countries.
• Conducive atmosphere for the management of any business processes or conduction of market research in the territory of the country.
• High labour force and low labor costs - with a labour population of 998.3 million (as per Reuters statistics), and the cost of labour not yet as high as the western world. 
• Extensive support from the Chinese government facilitating investments and the growth of business. 
• The Chinese market is huge and it is still growing, thus, your company has the opportunity to keep growing in the market. 

Requirements of Registering a Company in China

The following requirements are needed to open a company, depending on the type of the company.

1. For WFOE (Wholly Foreign Owned Enterprise), minimum level of capital is 30,000 USD.
2. The list of goods or services that the company will produce and provide respectively should be provided at the stage of registration of business in China. The state allows you to interact only with those names that were declared earlier, going beyond the subject of activity creates basis for administrative punishment.
3. Organizational and legal form: Limited Liability Company or joint stock company. Our lawyers recommend the first form, as it is less demanding.
4. Type of capital. Registration of companies in China can be conducted both with local and foreign capital. For non-residents it is recommended to choose the second type, as it eliminates the risks associated with the establishment of the joint venture.

Types of Company Registration in China

The following are the different types of companies available for set up in the People’s Republic of China, they include:

• Wholly Foreign Owned Enterprise (WFOE) - China WFOE formation is the most popular company set up in the country.
• Sole Proprietorship
• Partnership
• Private Companies
• Public Companies
• Representative offices (RO)

Business In China: Taxation

In the territory of the PRC (China), there are two main types of taxation: VAT and income tax. Foreign trade companies can rely on moderate benefits from the state, and the degree of reduction in tax rates is partially dependent on the type of activities of the company and significantly on the region of registration of the company in China (PRC). Details on the rates can be discussed with the specialist of Law & Trust.

1. VAT is payable due to general or simplified form. In the first case, the company is obliged to pay 16% of its turnover to the state treasury , the profit margin is not important. Simplified form is introduced in exceptional cases, and the rate equals to 4%.
2. Corporate income tax is 25%. 20% - for small enterprises and 15% for state-encouraged new high-technology enterprises.

How to Register a New Company in China: Procedure

The following below are a guide on how to register a company in China.

1. Law & Trust works with the client to get a business name that will be translated in Chinese, and registered with the authority of Commerce and Industry Administration.
2. Law & Trust confirms with the Ministry of commerce in PRC for the establishment of the new company 
3. Registration documents and reference will be sent to the authority for registration of the company.
4. The fourth stage includes registering the new business with all necessary authorities: tax service, organizations of quality control and statistics, social security authority.
5. Law & Trust International notifies you of the progress made during the registration process and once, the company is incorporated.

The lawyers of Law&Trust will help you register a company in China. You can contact us for free consultation at any time. We are capable of providing consultations both in the office and remotely.

Chinese Company Formation FAQS

• How much does it cost to set up a company in China?

The total cost of registering a company in China starts from $4935 depending on the type of company. The total cost of registration includes comprehensive review, registration service, business incorporation and registration certificates.

• How long does it take to register a company in China?

It takes from three (3) months for full registration of a company in China.

• How to setup a company in China as a Foreigner?

Contact Law & Trust today to get a professional overview on how to setup your company as a foreigner in China, consultation is free.

• Do I need licenses and permits in China?

Yes, a license or permit is required, when planning to run a business in PRC.

• Is an offshore company registration possible in China?

There are specific administrative regions that provide more a favourable atmosphere for the registration of an offshore company.

WHY INCORPORATE WITH LAW&TRUST INTERNATIONAL?

• Full range of related services: Provision of a full range of legal, corporate, government, and business intelligence related services.
• Professionals and expertise of Law: Worldwide registration and legal maintenance of companies, accounting services and audit, tax planning and optimization, trademark and patent registration, and many more. Top professionals are always available to help your business.
• Thorough domestic service: Law &Trust ensure our services cover every province or region in China. No matter where you decide, be rest assured we got the location covered.
• Free initial advice: Lawyers of Law and Trust provide free initial advice, as well as services for analyzing and developing a legal position on the issue you have raised.
• Fast and safe: Law&Trust keeps every clients’ details secured.
• Efficiency and productivity: Strategically providing up to date personalized services to help your business succeed.

Ready for Company Incorporation?

If you are interested in registering and incorporating a company in China, Law&Trust International can help. Send us an email or simple pick up the phone and call to take the next step in your business today!