The Simpler and Better Way for Company Formation in China

Estimated reading time: 3 mins

Today, China is without a doubt one of the global economic giants. What is more impressive about China is that its economy is overflowing with potential, and has opened the market to global trade. It is because of this that its manufacturing sector is booming, and you should not be left behind in taking advantage of this huge potential. 

The first step of exploiting this potential is registering your company in China. This post is a demonstration of the simpler and better way for company formation in China

Types of Companies You Can Form in China 

When you decide to do business in China, it is important to decide the type of company to form. Here are the main options to consider. 

  • Wholly Foreign-Owned Enterprise (WFOE)

As the name suggests, a WFOE is a company that is fully owned by foreigners. As a limited liability company, it is an independent legal entity from the owner. Foreigners coming to China prefer WFOEs because it provides them with full control over their businesses. 

  • Representative Office (RO)

This is a company formed in China to operate as a representative of the parent company back home. Although the establishment of a representative office is pretty simple, it comes with major limitations. For example, a representative office cannot issue invoices or make direct financial transactions. 

  • Joint Venture (JV): A joint venture is a type of business where a foreigner is required to form a partnership with a local Chinese. It is preferred by investors who want to grow their ventures rapidly by using the already established network of their Chinese partners. The main problem with joint ventures is that the Chinese partner is required to hold controlling shareholding in the company. 

Notably, the Chinese government is encouraging investors to form limited liability companies as opposed to joint ventures.  

How to Register a Company in China 

Once you have picked the preferred type of company, it is time to move to the main step of registering it. The entire process can be broken down into the following six main steps: 

  1. Get the name of your company approved. 
  2. Prepare the required documents. These include the company name, list of controlling shareholders, the managerial structure of the business, the legal address, the articles of association, and a feasibility study.
  3. Apply for an approval certificate from the State Administration of Industry and Commerce (SAIC) Ministry of Commerce (MOC)
  4. Register with the public security bureau. 
  5. Open a bank account.
  6. Register at the Tax Bureau. 

Register the Company with the Help of a Firm of Experts 

The six steps of registering your company in China can be lengthy and complex because you have to prepare a lot of documents and deal with multiple departments. Furthermore, the process takes long and you might have to make several flights to China. This is why you should consider using the simpler, more convenient, and reliable method of working with an agency of experts

Having been in the Chinese market for years, the firms of experts have the experience needed to professionally prepare the documents for company incorporation in China. They also know how to deal with multiple departments during company formation and are ready to help you to become successful after entering the Chinese market. Forming a company in China is a great idea, but the process can be lengthy and complex. This is why you should consider working with a firm of experts to prepare all documents professionally, and complete the registration fast. With a professional on your side, you cannot go wrong.

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