China is the biggest Electrical and other product exporter in the world. Integrated production facilities allow companies to develop the best products in the world here. Apple and Microsoft, two multinational companies, have chosen to assemble products in China with its resources. Since China has a huge population and is also inexpensive, it is a desirable place for business. Companies want to invest in China.
China is the biggest Electrical and other product exporter in the world. Integrated production facilities allow companies to develop the best products in the world here. Apple and Microsoft, two multinational companies, have chosen to assemble products in China with its resources. Since China has a huge population and is also inexpensive, it is a desirable place for business. Companies want to invest in China.
How to Form Businesses in China for Foreigners
Foreigners can set up companies in China in one of the following ways:
- WFOEs (wholly foreign-owned enterprises)
- Joint ventures
- Representative offices
- Partnerships
- Sole proprietorships.
Procedure to Register a Company in China
Here is the step-by-step procedure for new company registration in China:
It can be hard to comprehend Chinese company laws correctly. That's why you should entrust the entire company registration process to Vakilsearch. We will support you with audits, tax consultations, bookkeeping, and annual financial compliancies, among others. There are two types of businesses you can choose from: audited and unaudited. Unaudited businesses are more economical than audited businesses because they do not incur additional costs to have your company audited.
The fourth step is to gather the necessary paperwork. This process is critical to establishing a company. To avoid conflict with existing businesses, you must first apply to the Administration of Industry and Commerce for approval of your own business name. You must gather the paperwork listed below before beginning the process of establishing a company:
At this stage, you must apply for a state certificate of approval and a trade licence from the Ministry of Commerce (MOFCOM). You may also need further permissions if you operate in the food and beverage, manufacturing, telecom, or construction industries. You may obtain additional licences after obtaining your business certificate. The Public Security Bureau (PSB) will also be able to identify your business. You may register with the PSB at the Tax Bureau to get your chops. You will not be able to validate a contract in China if you don't have chops.
The corporation tax rate is 25% on profits. If you operate in certain ‘encouraging sectors,’ the rate can be reduced to 15%. As of 2017, the turnover tax rate is 3% to 5% of sales.