Set Up Company In China Can Be Easy

Set Up Company In China Can Be Easy

After helping thousands of foreign investors to achieve their business dreams in China. We thought it is our obligation to share some of our valuable experience with whom are also thinking about entering this huge market. Below are the most frequent questions we have been asked by foreign...

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After helping thousands of foreign investors to achieve their business dreams in China. We thought it is our obligation to share some of our valuable experience with whom are also thinking about entering this huge market. 

Below are the most frequent questions we have been asked by foreign investors. 

Question 1: Can a foreigner alone open a company in China?

The answer is certainly YES! This question is often asked by foreign individual investor as they would often be told by Chinese people that foreigner cannot open a company in China by themselves. Well, that is not true! Same as foreign company, both are eligible to open a wholly foreign owned enterprise “WFOE”. In most cities, Chinese individual is not allowed to form a Joint Venture with foreign company, but a FIPE “Partnership Enterprise” could allow such structure.

Question 2: Timing

Often, we heard people are comparing China with Europe or other western countries in terms of setting up business. For example, register a company in UK would only cost 12GBP and within 24hours your company would be ready. China is not there yet! Since 2016 the Chinese government has implemented new regulation called foreign investment “Negative list” which means if your business scope does not require approval outside the negative list, you could just make an online recording instead of going through district or municipal government for which sometimes could take long time. In some cities, business license can be applied right after the company name is registered, provided all required documents are well prepared.

Question 3: How much money should I bring to China?

In many countries, it is required to open a bank account and make certain amount deposit before you could apply for business registration. In China, this is unnecessary. The registered capital is a unique concept exists in the Chinese company law, also, since 2014 Chinese government has abolish the requirement on minimum registered capital and its paid time limit. The registered capital allows the foreign investor to start their business operation in China before they could generate income locally. Although in some cities due to local district government or in special industry, the registered capital is expected to be paid according to their article of association. However, these days, not only there is no requirement on minimum amount but also the paid duration can be up to 10 or even 20 years. So, there is no financial burden in the beginning.

Question 4: How many times do I must come to China?

The answer to this question is zero. This might sound unbelievable? What about finding office space and signing the documents? Many office spaces now can do a virtual tour especially with many shared space or even allow virtual address registration (Shanghai Free Trade Zone), this means finding a physical office won’t be necessary. Application documents such as article of association can be signed overseas then courier to China. Specific district government might still have their own requirements.

Question 5: Would I get resident permit if I set up my own company?

In most cases, the company legal representative is eligible to apply for work permit in China. After the work permit, you can apply for resident permit, not the other way around. Business license is issued by Administration of Industry& Commerce and work permit is issued by labor bureau/foreign expert bureau. Having your own business does not 100% guarantee the visa success rate since the new work permit application process adopts a new scoring system for which number of documents are required.


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