The governors of China’s provinces and autonomous regions and mayors of its centrally controlled municipalities are appointed by the central government in Beijing after receiving the nominal consent of the National People’s Congress. Therefore, doing business in China is based on the provincial laws and regulations.
Types of China Companies
|a) Holdings Company
||g) Unlimited Company
|b) Limited Company
||e) Foreign-owned Enterprise
||h) Representative Office
|| f) Domestic Enterprise
|| i) Self-employed
Application Conditions for China Companies
At least two shareholders aged above 18 years old and one local director, local registered address and registered local secretary. The authorized capital depends on the nature of business and must be paid up with a particular period, different company is given a different particular period.
Scope of Business for China Company
The scope of business for China company is restricted to its nature of the business and authorized capital. The scope of business is stated in the business license, the size of authorized capital determines the scope of the business. China government is gradually releasing the scope of business as long as the business is recognized by the laws and regulations in China. For any special businesses, must be conduct a prior pre-approval.
Special businesses included:-
Petrol Station, Oil Storage, Slaughtering, Educational, Auction Industry, Seals Industry,, Laws, Accounting Services, Employment Agency, Construction, Publishing and Printing, Cosmetics, Pharmaceuticals, Travel Agency, Medical Institution, Food Production, Insurance and Banking Industries, etc.
Procedures of China Company Formation
Company name search → Verification → Business license application → Organisation code certificate →
Tax registration certificate → Bank account opening → Tax account registration → Taxes approved →
Stamp duty Submission → Taxpayer verification → Tax agent verification → Payment for tax registration
Company name search – 5-7 working days
Authorized capital verification – 1 working day
Business license application – 15-20 working days
Supervision Quality Bureau – 10-14 working days
Inland tax department – 15-20 working days
Tannet has 10 branch offices in China to assist you in forming China companies. Our branch offices in:-
We have more services than the above mentioned such as Hong Kong Company Formation, Offshore Company Formation, Trading & Warehousing Services and China Contract Drafting, etc.
1. A China WFOE eases to be formed. The applicant can be a natural person or legal person, and no nationality restricted.
2. The investor can take full control and profit in its business due to there is no shareholder who will be sharing the profit with and delay in decision making.
3. China WFOE which has been operating in production industry for more than 10 years the company is entitled tax reduction benefits.
4. China WFOE which registered under the category which is technology-intensive or knowledge intensive, or the foreign investment is USD 30 million and above is entitled low tax benefit at 15%.
5. China WFOE which under export industry, when the volume of product export in a year is more than 70% of the total production in the same year, thus, the WFOE can enjoy a tax benefit as low as 10%.
6. China WFOE which under production industry can be exempted from land rental. For export and technological industries, both can enjoy a reduction in land rental.
7. Form a China WFOE is better than joint-venture with China company because the investor can escape from being cheated and no due diligence need to be conducted.
We have more services than the above mentioned such as Malaysia Company Formation, China Due Diligence, Hong Kong Trademark Registration and Hong Kong Tax Planning, etc.
The China Wholly Foreign-Owned Enterprise (WFOE) is a common investment vehicle for mainland China-based business. WFOE is a company with limited liability wholly owned by the foreign investor to minimize the labor cost for export purpose.
The applicant can be one or more foreign natural person or legal person. The authorized capital is equally to RMB 100 thousand regardless any currency but must be paid up. The nature of business must comply with the “Foreign Investment Industrial Guidance” issued by the State Council of China.
Company name search → Certificate of approval → Business license application → Organization code certificate → Bank account opening → Tax account registration
Company name search – 3-5 working days
Certificate of approval – 40-50 working days
Business license application – 10 working days
Organization code certificate – 1 working day
Bank accounting opening – 7-10 working days
Tax account registration – 10 working days
We have more services than the above mentioned such as Hong Kong Company Formation, Offshore Company Formation and China Trademark Registration, etc.
1. Obtain extensive control with less capital.
2. Able to extend controllability over a number of enterprises in a short period of time by buying the stock of the existing enterprises. It’s much more rapid than formatting new enterprises.
3. Extending the business line with existing human resources of the subsidiaries and entitled to the profit from subsidiaries.
4. Able to minimizing the business risks from operating due to the holding company scattered its investment to diversified industries, hence, the profits can cover one another to ensure a stable profitability.
5. Enjoy tax consolidation benefits such as tax-free dividend can be claimed.
China Holding Company is an organization (parent company) that owns other companies’ major shareholdings. These companies are known as subsidiaries. The Board of Directors of the holding company has the authority to control or influence over the subsidiaries.
The parent company must possess total assets not less USD 400 million one year before application and paid up capital of minimum USD 30 million for a holding company. It must have strong financial backup and good credit standing. In addition, it must also have set up at least 10 enterprises or 3 investment projects.
Qualification audit → Application submission → Confirmation of Ministry of Foreign Trade & Economic → Documentation preparation → Examination & Approval
An audit that carry on by the local lawyer the foreign investor whether obtain the criteria to set up a holding company. Due to independent provincial law, therefore, the foreign investor must verify the exact place.
After auditing, a details report of the parent company and its foreign investment companies in China to be submitted to the Ministry of Foreign Trade & Economic for verification and approval.
Once the Ministry of Foreign Trade & Economic has approved, the local lawyer shall prepare the documents such as investment proposal, feasibility study report, contract, M&A, photocopies of certificate of approval, business license and inspection report by registered accountant, the balance sheet for last three years and other relevant documents.
Examination & Approval
The foreign investor shall submit all the prepared documents by the local lawyer and state the exact province, autonomous, region and territory to the Ministry of Foreign Trade & Economic and Ministry of Commerce for examination and approval. Meanwhile,
We have more services than the above mentioned such as China Feasibility Study Report, China Due Diligence Report and China Legal Advisory, etc.
We will be glad to share with you more information. Please do not hesitate to contact TANNET at 603 2141-8908 or email to firstname.lastname@example.org should require any assistance.