The simple and better way for China company registration | Hawksford (2024)

The procedure for China company registration

1. Choose an agency to help you with the registration

While the Chinese administration has put a lot of effort into supporting businesses, we must indicate that registering a company is not a simple task. From theinterpretation of the company lawsto prepare the required documents, the process can be overwhelming. But this should not dampen your resolve to expand to China. The best and sure option is using an agency.

Agencies are run by professionals who have helped other investors withChina company registration. So, they know the best steps that you should follow, and the mistakes to avoid. Well, if you want to complete the registration faster, professionally, and enjoy every step, work with the bestChina company registrationfirm.

In addition to helping you with company incorporation in China, the expert firm will also come in handy to assist you with the following:

• Payroll
• Bookkeeping
• Tax advise
• Tax minimisation methods
• Audits
• Support for the annual financial statements

2. Select the preferred company scope

In China, the government has categorised its sectors and put emphasis on areas with the potential to grow the economy faster. To learn about the categories, you should check the Catalog for the Guidance of Foreign Investment Industries. It is updated regularly, with the government encouraging investors who are focusing on innovation. For example, if you are in manufacturing, the business venture will be greatly supported by the administration. Well, this is the reason why Chinese manufacturing has exploded in a way never seen anywhere in the recent past.

3. Prepare the required documents

In order to get authorised to start operating your company, you need to prepare an assortment of documents and submit them for approval. Here are the documents that you need:

• The company name.To get the company name, you should seek approval from theAdministration of Industry and Commerce. This is very important to ensure that your name does not conflict with others already in operation. Note that this approval can take between two and fifteen days depending on where you want to open the business.
• The list of controlling partners. These are the shareholders who hold the majority of shares in the company that you are incorporating. To avoid getting into trouble later, it is advisable to confirm that the business partners are allowed to hold shares in China.
• The managerial structure. This is the complete business operational profile that includes the board of directors, supervisors, general manager, and legal representative. This structure should be accompanied by copies of the directors’ passports.
• The legal address. This is the official headquarters of the company where the authorities can seek answers to any issue about the company. The address should include details such as the phone number and email of the house or landowner.
• Articles of Association. This is another crucial document during theChina company registration process. It contains important information on the business description, including the scope that you intend to operate in. In the document, you outline the core details of the business, including the managerial structure and the methods to be used for returning profits.
• Registered capital and total investment. The registered capital denotes the resources dedicated to meeting the expenses of running the company. On the other hand, the total investment is the sum of registered capital and future loans from investors. It can also be from third parties like banks.
• A feasibility study. To prove to the authorities beyond any reasonable doubt that the company is feasible, you need to provide a comprehensive business plan and a budget. Here, you need to demonstrate theregistered capitalcan finance the operations. If the authorities are not convinced of the feasibility study, your company registration will not be approved. So, make sure to work with a professional agency to craft a convincing feasibility study document.

4. Apply for approval certificate

In order to get issued an approval certificate and operating license, you need to deal with two entities. One, theMinistry of Commerce (MOFCOM)and theState Administration of Industry and Commerce (SAIC). These authorities will review your application and notify you if the certificate has been approved or declined.

5. Apply for business license

Once issued with a business certificate, you will need additional license/s depending on the niche you are operating in. In China, businesses in manufacturing, food, beverages, construction, and telecoms require additional licenses.

6. Register with the Public Security Bureau (PSB)

This registration helps you to get thecompany chops. In China, company chops are equivalent to the value of a signature in western countries. If you do not have a chop, it is impossible to validate any contract.

7. Open a bank account

For your business to start operating, it must have a bank account. AChinese bank accountallows the company to get paid and be able to pay bills. The bank account will also come in handy when filing returns.

8. Register at the tax bureau

In China, all companies, including thewholly foreign-owned enterprises, are required to comply with the Tax regulations. Therefore, you should first register the business's basic financial and operating info such as CFO verification and category, among others. When still at this, you need to note different taxes obligation. They include:

• Corporate income tax: This is a tax on profits of 25%. However, if you are in the “encouraged sectors” you can enjoy lower corporate income taxes.
• Transaction Tax: This tax is also known as turnover tax, which is 3-5% of the business sales.
• Custom duties: These are charged on goods that are exported from or imported to China.
• VAT (Value added tax): There are different tax rates in China: 3%, 6%, 9%, and 13% in terms of industries.
• Individual income tax: This tax is imposed on dividends that are levied by company partners and staff salaries.

As we pointed out earlier,starting a business in Chinais a monumental task. Therefore, it is a great idea to have a professional holding your hand all the way. Note that working with an expert agency means that you have a partner to walk you through, even during the early days of company operations. So, do not wait any more; it is time to identify a great agency and take advantage of the high-potential Chinese market.

FAQ

Q. How do I register a company in China?

Registering a company in China is a process that requires you to prepare the right documents and seek approvals from various departments. The best way toregister a company in Chinais using an expert agency.Registering a company in Chinarequires you to follow these steps:

• Choose an agency to help you with the registration
• Select the preferred company scope
• Prepare the required documents
• Apply for approval certificate
• Apply for business license
• Register with the Public Security Bureau (PSB)
• Register at the tax bureau

Q. What are the main documents that I need to incorporate a company in China?

There is a whole array of documents that you must prepare in the process ofregistering a business in China. Here are some of them:

• The company name
• The list of controlling partners
• The managerial structure
• The legal address
• Articles of Association
• Registered capital and total investment
• A feasibility study

Q. Can foreigners own companies in China?

The answer is, “yes.” They can own companies by incorporating them in China. For example, a foreigner can incorporate awholly foreign-owned enterprise (WFOE), open a joint venture, or start a representative office.

Q. How much corporate income tax reduction do WFOEs in “encouraged” sectors in China get?

If your company is in the “encouraged” sectors, the Chinese administration cuts the corporate income tax from 25% to 15%.