Creating a company in China is the first obstacle in the process of transacting business in China. If you set up a company using the wrong structures, it may cost you. Failing in China Company registration may cause a fatal blow.
If your company doesn’t collapse, its ability to expand and become successful can be tremendously impeded.
China laws permit a 100% foreign company ownership. Nonetheless, it heavily regulates and restricts foreign owned company activities. Such companies can only transact in the business operations listed on their company license. The amount of capital necessary by a foreigner to start any China Company registration can be determined by the location of the firm and its business operations.
Getting a business license in China
You have to fill up an application form to get your registration certification and HK trademark registration. Other required documents include:
• Identification and appointment documents of your supervisors, officers and directors.
• Identification and appointment documents of the legal representatives of your company.
• Articles of association obtained from each shareholder.
• The identification document if your officers and the identity card of your share holders.
• Representation authorization documents.
• An appraisal report or capital verification certificate
• A lease or any other document that may work as a proof of your company’s office.
If your initial contributions are as non monetary assets, then documents that certify transfer of the relevant property titles of these assets are necessary. Other documents might be necessary depending on the issuing authorities.
Quality and Bureau Code Certificate
You should apply for the organization of your company in a period of 30 days on getting your business certificate. Your application form should be completed and filed with the Shanghai company code management center. This is a branch of the quality and technology supervision Bureau. Other supporting documents include a copy of the identity card of the representative and the original and a copy of the business license.
Wholly Foreign Owned Enterprises (WFOEs) or limited liability companies whose investors are completely foreign are gradually becoming the most popular technique of foreign investment in China. While foreign companies used to think that a local partner was required to operate business in China, this is no longer the case in a wide range of industries.
Features of WFOE’s:
• Liability is restricted to the amount of registered capital contributed.
• Equity is divided based on contribution to registered capital and not allocation of shares.
• Limits public offering of shares
• Restricts the right to transfer shares
• Between one to 50 shareholders
WFOE’s are governed by the law of the PRC and you have to apply for China WFOE registration before you start working on it along with relevant implementing regulations.
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