The registration of a business license in China takes about 30 working days.
After approval of the business license there are a number of post-set up activities such as register for bank account and tax account etc.
Forms of enterprises for foreign companies in Mainland China
There are three common forms of enterprises for foreign companies in Mainland China:
- Joint Venture (JV),
- WOFE (Wholly-owned Foreign Enterprise),
- Representative office (RO).
Nowadays WOFE is the most preferred form by foreign entities.
A WOFE may be capitalized by foreign investors and operated without the need for Chinese partners or employees. It will provide you with greater control over your business’s operations, revenue and profit targets. A WOFE is a favorable option for both individuals or overseas company that wants to enter the Chinese market.
The following matters are linked to the company incorporation of a WOFE in China:
- You must decide on and verify the name of the business with the authorities in charge;
- You should provide information about the owners (name, nationality, the country of residence);
- Decide the business scope and main business activities;
- Appoint the board of managers (these can be foreigners or Chinese nationals);
- Generate a business feasibility report (each type of entity requests this report);
- Provide the minimum share capital (free trade zones do not require it);
- Apply for a business license in accordance with the type of service you are offering;
- Approval from the PSB (Public Security Bureau) of the company chops, that in China are extremely important since often, a signature is not enough, you’ll also need a stamp;
- Registration with the Tax Bureau;
- Registration with the Customs Office (for trading companies);
- Registration with SAFE (State Administration of Foreign Exchange);
- Register for corporate bank account.
Who Should You Choose When Setting Up A Company in China?
Consulting company vs Law Firm
Application process and documents are government standard format and does not need to be reviewed by a lawyer. Sperton is a one-stop service provider for company set up and tax set up.
Sperton provides the complete set up process whereas law firms only help you to the point you receive the business license and you will need to figure out the post set up formalities such as bank account, tax verification, mandatory accounting etc. by yourself or find another service provider.
Sperton can assist with dissolution and closing of a legal entity.
It is also mandatory to hire a local accounting firm in China for monthly and yearly reporting of tax and revenues. Sperton also offers cost-efficient and high-quality accounting service in China.