China Company Registration
Service Description
| I. Advantages of registering a company in China |
| China as a country with huge market potential, low-cost advantages, preferential government policies, convenient business environment, abundant talent and supply chain resources, and abundant investment opportunities, has attracted more and more enterprises to choose to register companies in China, and many enterprises have chosen to register companies in China mainly for the following reasons:
1. Huge market potential: China is one of the largest consumer markets in the world, with a huge population and a fast-growing middle-class consumer base, providing enterprises with huge market potential and business opportunities. 2. Low-cost production: China’s relatively low labor costs allow companies to produce goods at lower costs and achieve higher profits here. 3. Preferential government policies: The Chinese government has adopted a series of preferential policies in attracting foreign investment and promoting domestic economic development, including tax relief, preferential loans and reduced procedures for business registration. 4、Convenient business environment: The Chinese government is committed to creating a more convenient business environment, continuously optimizing the management system, improving service efficiency and expanding market opening, making it more convenient to register companies in China. 5. Huge talent resources: China has a huge talent pool from which many companies can obtain suitable talents, which provides important support for business development. 6. Perfect supply chain system: China has a perfect supply chain system, including raw material procurement, processing and manufacturing, logistics and distribution, which provides an efficient and stable supply chain environment for enterprises. 6. Rich investment opportunities: As one of the largest economies in the world, China has rich investment opportunities in various sectors, allowing companies to expand and expand in different areas. |
| B. Types of registered companies and required information |
| The choice of which type of company to register is based on factors such as the business situation, the number of owners, the amount of investment and the financial risk required. The main types of companies registered in China are
1、Limited Liability Company (LLC): LLC is one of the most common types of registration in China. In LLC, the owners (shareholders) of the company enjoy limited liability, i.e., they only need to bear the risk of their capital contribution. Requirements: At least one shareholder and one director, registered capital, registered address, etc. Information: Articles of Incorporation, proof of shareholders’ identity, proof of directors’ appointment, proof of registered capital, proof of registered address, etc. 2、Partnership: A partnership is a consortium of two or more individuals or companies, which usually involves the sharing of profits and losses, and the partners have unlimited liability in the company. Requirements: At least two partners, registered capital, registered address, etc. Information: Partnership agreement, proof of identity of partners, proof of registered capital, proof of registered address, etc. 3、Branch Office: A foreign company can register a branch office in China to conduct the same business as its parent company. The branch office usually has limited liability, but its business is under the supervision and control of the parent company. Requirements: Parent company of foreign company, branch name, registered capital, branch address, etc. Documents: Application for branch office registration, proof of parent company, proof of registered capital, proof of branch office address, etc. State-Owned Enterprise (SOE): SOEs are enterprises owned by the government or government-controlled organizations. Requirements: Ownership by government or government-controlled organization, registered capital, registered address, etc. Information: Business license of enterprise legal person, certificate of government control agency, certificate of registered capital, certificate of registered company address, etc. 5、Joint Stock Company (JSC): JSC is similar to LLC, but the difference is that the shares of the company can be traded freely and there is no limitation on the number of shareholders. In a joint stock company, the shareholders have limited liability. Requirements: At least one shareholder and one director, registered capital, registered address, etc. Information: Articles of Incorporation, proof of shareholders’ identity, proof of directors’ appointment, proof of registered capital, proof of registered address, etc. 6、Sole Proprietorship: A sole proprietorship is a business operated by one person whose business is interrelated with the financial position of that person. In this type of company, the owner assumes limited responsibility. Requirements: Only one person is required to operate the business, and the business must comply with the law, registered capital, registered address, etc. ●Documents: Proof of personal identity, proof of business license, proof of registered capital, proof of registered company address, etc. |
| Three, China company registration process |
| 1、Determine the type of company: Before registering a company, you need to determine the type of company according to your investment needs and business plan, such as limited liability company, partnership, etc.
2、Pre-approval of company name: Before company registration, pre-approval of company name is required. According to the relevant national and regional regulations, the applicant needs to fill out the company name application form and submit the materials required for the company name application. 3. Signing of investment agreement: All shareholders are required to sign an investment agreement, specifying the proportion of each party’s share in the company, the amount of investment, and other matters. 4、Registered capital: To register a company in China, it is necessary to set up a registered capital. According to the relevant national and regional regulations, the company needs to pay a certain amount of registered capital when registering. The registered capital can be paid in money or in kind. 5、Signing the articles of incorporation: The articles of incorporation are an important part of the company, which should be formulated according to the company law, specifying the company’s form of organization, scope of business, directors and supervisors. Before signing the articles of incorporation, it is necessary to apply for notarization to the notary public. 6、Application for business registration: After signing the articles of incorporation, business registration is required. Applicants need to prepare the company’s registered capital certificate, articles of incorporation, proof of identity of shareholders, proof of identity of legal representative and other materials, and submit them to the local industrial and commercial administration for examination. 7、Obtain a business license: After examination by the Administration for Industry and Commerce, a business license will be issued if all the documents submitted by the applicant meet the relevant regulations. The business license is the proof of the company’s legal existence and a necessary document for daily operation. 8、Other registrations: After the company is registered, other registrations may be required, such as tax registration, social security registration, etc. It is important to note that the specific registration process may vary depending on the region, industry, type of registration and policy changes. Therefore, before proceeding with registration, it is advisable to consult with your local registrar or attorney to obtain the most up-to-date information and guidance. |
| 4. Open a bank account in China |
| After registering your company in China, you can open a bank account by following these steps:
1. Choose a bank: Choose a bank that suits your needs and business scale. The major commercial banks in China include Bank of China, Industrial and Commercial Bank of China, Construction Bank, Agricultural Bank, etc. 2. Preparation: You need to prepare the company’s business license, tax registration certificate, organization code certificate and other related documents, as well as your own identity card. 3. Make an appointment to open an account: contact your bank to make an appointment to open an account. 4. Interview: Come to the bank for an interview and submit the required documents. The bank staff will review your information to ensure that it is true and valid. 5. Sign the agreement: If your application is approved, the bank will ask you to sign an account opening agreement and open the corresponding type of account for you. 6. Pick up account information: You can pick up account information and related bank cards at the bank.
▶ The following information is required for a Chinese company to open a bank account: -Copy of the original and photocopy of the company’s business license -Original and photocopy of the company’s tax registration certificate -The original and a copy of the company’s organization code certificate -Company’s business scope -Original and photocopy of the identity card of the legal representative of the company -Original and photocopy of the company’s shareholder’s ID card (if shareholder) -Articles of incorporation or contract (required by some banks) -Corporate Account Opening Permit (if required) It should be noted that the requirements for account opening documents may vary from bank to bank, and the specific requirements of your chosen bank will apply. It is recommended that you communicate with your chosen bank to understand the specific requirements and procedures before opening an account. In addition, if you do not speak Chinese or are not familiar with the Chinese financial system, it is recommended that you seek the help of a professional service provider to better understand and complete the account opening process. |
| IV. Introduction to China Corporate Tax |
| Taxes on Chinese companies mainly include corporate income tax, value-added tax, consumption tax and personal income tax.
1、Enterprise income tax: Enterprise income tax is a tax levied on the profits of enterprises in China. The tax rate is 25%. According to the national policy, small and medium profit enterprises can enjoy the preferential policy of 50% tax rate reduction. 2. Value-added tax: Value-added tax is a tax calculated on the difference between the sales amount and the purchase cost. Different industries, products and services have different tax rates. The tax rate is generally 13%, 9%, 6%, 3% and so on. At the same time, VAT also has a certain credit policy. Excise tax: Excise tax is a tax levied on certain consumer products, such as tobacco, alcohol, cosmetics, etc. The excise tax rate varies depending on the product. 4、Personal income tax: Personal income tax is a tax levied on the income of individuals. The tax rate varies according to the income level. At present, China’s individual income tax is calculated in segments, with tax rates ranging from 3% to 45%.
For tax incentives, China also has many, such as: 1. Investment tax reduction policy: For eligible investment enterprises, they can enjoy corporate income tax reduction within a certain period of time. 2. Pre-tax deduction policy: For expenses on research and development, technological innovation and employee training, enterprises can make pre-tax deductions when calculating corporate income tax and reduce taxable income. 3, investment subsidy policy: for eligible investment enterprises, the national and local governments can give a certain amount of capital subsidies. 4. Tax incentives for special economic zones: Some special economic zones in China, such as free trade zones, economic and technological development zones, and customs control zones, can enjoy certain tax incentives, such as preferential corporate income tax rates, preferential value-added tax rates, etc. 5. Tax incentives for small and medium-sized enterprises: China has many tax incentives for small and medium-sized enterprises, such as a 50% reduction in enterprise income tax, a higher threshold for value-added tax, and a reduction in urban maintenance and construction tax. It should be noted that certain conditions and procedures need to be met in order to enjoy the tax incentives, and you can consult with the local tax department for details. At the same time, while enjoying the tax incentives, enterprises also need to fulfill the corresponding obligations. |
How to choose the right type of company for a foreign company registered in China?
Wholly foreign-owned enterprises: Wholly foreign-owned enterprises are enterprises operated solely by foreign investors in China, in which the investors own all the shares and control, and have higher operational autonomy, but have higher requirements for registered capital.
Sino-foreign equity joint venture: A Sino-foreign equity joint venture is an enterprise jointly operated by two or more investors from China and abroad, and the investors have an agreement on operation, management and profit-sharing, etc. The joint venture enjoys independent legal personality after its establishment.
Sino-foreign cooperative enterprises: Sino-foreign cooperative enterprises are enterprises jointly operated by two or more investors from China and abroad. The investors have agreements on operation, management and dividend sharing, but do not enjoy independent legal personality.
Branches: Foreign enterprises can set up branches in China, usually for better business development and management, but they do not enjoy independent legal entity status.
Representative Office: Foreign enterprises can also set up representative offices in China, but the scope of operation of the representative offices is limited and they can only engage in non-profit activities, such as market research, customer development, liaison and coordination, etc.