What is the procedure for forming a corporation in China?

What is the procedure for forming a corporation in China?

It will take 0.5–1.5 months to complete all of the procedures and obtain a business certificate from the Administration for Industry&Commerce in China. The procedures will change based on the type of business you intend to do in China.

For foreigners, I believe the first step should be to read the China State Council's Special Administrative Measures For Foreign Investment (Negative List). Following that, you will know whether your firm is permitted in China. For example, many foreigners desire to establish firms that may hire actors/actresses and perform in China, but this is prohibited on the Negative List. Currently (in the year 2020), only 31 types of business are prohibited or restricted. If your company is not on the Negative List, you can establish a WOFE (wholly foreign-owned firm) without having Chinese partners.

Prepare paperwork and information for the shareholders, legal representative, and supervisor of the firm you intend to establish in China

 

The Stockholders:

If the shareholders are foreigners (individuals), they can enter China with a valid China visa to establish a corporation (business visa, tourist visa, or any other kind of visa are all OK). If the shareholders do not wish to enter China, copies of their passports must be authorized by the Chinese consulate (or the Chinese embassy) as shown below:

If the shareholders are foreign companies or entities, the following shareholder documents must be legalized: the business certificate (certificate of incorporation), the business file (showing who the shareholders are and who is in charge), and a letter of authorization (to show a person who is the empowerment representative to sign documents for the Chinese company formation, with the empowerment representative's signature on it).

The number of stockholders might range from one to fifty. If the number of shareholders exceeds 50, the firm will become a limited liability corporation, requiring further permission and monitoring from the government.

The legal representative needs a copy of his or her passport's first page. In China, each firm must have one legal representative. It might be a Chinese or a foreigner above the age of 18. In China, he or she must have a mobile phone number. If the shareholders are people, one of them may act as the legal representative.

The supervisor requires a copy of his/her passport's first page. According to Chinese Business Law, each firm in China must have one supervisor, who cannot be the same person who is the company's legal representative or financial head. The supervisor, on the other hand, maybe one of the stockholders.

After completing the preceding steps, rent a business address for the firm. There are several types of business addresses available for your consideration. You can hire a standalone office, a workstation from a coworking space, a place in a factory, or even a virtual office. Some of my clients, for example, solely import and sell food or other commodities in China. They just hire a virtual office in Guangzhou for their businesses, which costs around USD1,300 per year. If you require assistance, please click my name to discover my contact details.

To obtain a business certificate (certificate of incorporation), you must first obtain a rental contract, then prepare and sign some application forms, then submit all the documents, including the application forms, rental contract, and shareholders' docs, to the local Administration for Industry and Commerce, and you will receive a business license, indicating that you have a company in China; typically, we will spend one week on this for our clients. Obtaining a business certificate indicates that you have actually established your firm in China. If no further special permissions are necessary for your sector, you can begin doing business with your firm. If you require additional specific licenses, such as to sell foods, you must apply for a food permit before conducting business with your customers.

You must also create a corporate bank account for your business and declare your company details to the tax authorities. And make sure to file your tax returns on schedule each month. To open a bank account, your company's legal representative needs to travel to the bank and take photographs. If you are having difficulty with this section. You may get my contact details by clicking my name. In previous years, we assisted numerous clients with business formation (including totally foreign-owned enterprise, joint venture, and rep office), office rent, HR&payroll, bookkeeping&tax counseling, work visa application, and trademark registration in China.