Set Up a Company in China

If you want to set up a company in China, you are making the right choice. However, you need to understand a lot of questions. For example, what is the registration process for Foreign Invested Enterprise in China? How to apply the License and Certificate in different activities? 

Generally, Foreign Invested Enterprise in China is referred to WFOE (Wholly Foreign Owned Enterprise), or JV (Joint Venture) company, or RO (Representative Office), including Consulting company, Trading company, Technology company, Food and Beverage company, as well Manufactory or Factory company, etc.

GWBMA provides one-stop business service for Foreign enterprises, including Registration Process, Bank Account, Accounting & Tax, HR outsourcing, VISA & working permit and legal services. 

Choose GWBMA, choose its expertise with high efficiency, and start your business in China Today.

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Choosing a type to set up a Company

background Layer 1 WFOE

Wholly Foreign Owned Enterprise

WFOE company is very popular. Wholly Foreign-Owned Enterprise (WFOE or WOFE) refers to foreign enterprises, corporations, economic organizations or individuals which are 100% owned and capitalized in China by foreign investors. WFOE is not included the branches of foreign companies, enterprises, other economic organizations located in China, such as branch offices, representative offices, etc. The unique feature of a WFOE is that involvement of a mainland Chinese investor is not required, unlike most other investment vehicles (most notably, a Sino-foreign joint venture).

background Layer 1 JV

Joint Venture

Joint venture (JV) is a business entity set up in China, by one or more enterprises, corporations, or economic organizations cooperating with Chinese enterprises, corporations, or economic organizations, namely investors from two or more nationalities, in accordance with the Company Laws in China, characterized by shared ownership, shared returns and risk, and shared governance. The contribution of capitals shall be converted to a certain proportion, and the proportion of the foreign investors shall be no less than 25%.

background Layer 1 RO

Representative Office

Representative Office (RO) allows a foreign company to hire staff in China through their own legal entity, for the sole purpose of company representation. The main difference is that a representative office can't issue official invoices, nor receiving payments from it's clients. Starting up a representative office in China is the fastest way to get an income at a lesser cost. However, for starting a representative office you need 2 years viability of your company and then the representative office certificate will last till the end of the foreign guardian company.

The procedure to set up a company

  1. Company name Registration

    5 Working Days

    We need the certificates of incorporation and the investor certified Chinese Embassy and Passport, Office rental agreement, Company name pre-approval application form, Five options of company name in Chinese.

  2. Application for Business License 3 in 1

    10 Working Days

    After taking name approval, we draft a Articles of association for your company. We need Incorporation application report, Certificate of incorporation of overseas investor certified by Chinese Embassy, Standards forms, etc.

  3. Company Stamps

    3 Working Days

    Public security bureau record and seal engraving, including Company stamp, Financial stamp and Legal person's stamp.

  4. Basic RMB Bank account opening

    5 Working Days

    Standard forms (provided by the bank), Business license 3 in 1, Stamps, ID or passport of legal representative.

  5. Open Tax account

    3 Workding Days

    Opening the company's tax application and filing of accounting system. After that ,the legal person of the company signs the power of attorney, we'll open the Tax Account in Tax Bureau.

Basic Documents Required

Passport

Certificates of legal representative of the personal investor should be notarized by local, state or national registration office or authentication department and then be authenticated by Chinese Embassy of consulate.

ID Proof

Certificate of Registration/Business Certificates, Identification Certificates for personal investor, and both should be notarized by local, state or national registration office or authentication department and then be authenticated by Chinese Embassy or consulate.

Address Proof

Address Lease Agreement at least one year agreement (office rental certificate required), Property Certificate (Copy and stamped with property owner's chop in China).

What do you receive

What do you receive after the company is registered

Business License

Obtaining a Business License from Government

Articles of association

Company's articles of association (Basic Version in Chinese)

Stamps

Company stamp, Financial stamp and Legal person's stamp

What to do next after Company Registration

Bank Account

RMB Company Bank Account / Company Capital Account / Foreign Exchange Account

TAX Bureau Disk

Golden Tax Bureau Disk (OfficialTax USB disk to issue invoices and the tax)/ Fapiao printing machine / Blank fapiao notes

Visa & Work Permit

Work visa is required for entrepreneurs who set up a company in China. After applying for a work visa, you must obtain a work permit and residence permit.

Social security account

Pension, Medical Insurance, Unemployment Insurance, Maternity Insurance, Work Injury Insurance and Housing Provident Fund for Chinese employees.

Licenses & Certificates

Choose Licenses & Certificates After Company Registration

Import Export Certificate

It contains the following 4 permits in the Customs Bureau: 1.Certificate for Inspection and Quarantine. 2.Certificate of customs declaration. 3.Foreign Exchange Administration Unit . 4.Electronic port Card.

Food Circulation License

Restaurants and the Companies engaged in the manufacture and packaging of food need the Food License. You need to provide the address agreement at least one year, 2 health certificates, etc.

ICP License

If the company has an official website or an e-commerce site in China. For official website or online sales commerce platform, you need to apply a commercial ICP license.

Medical device license

If the company business is belong to 2 class(Mid-risk medical devices), you should be put on record in authority, if the business is belong to 3 class (High-risk medical devices), you should go to NMPA to get the License.

Wine Wholesale/Retail License

If the company has the Food Circulation License, you need to provide the real office or shop agreement with property certificate,etc.

Human Resource license

The HR license of company needs the bank deposit of RMB 100,000 of Registered Capital, 5 employees with Talent certificates, and real office.

Travel agency license

The Recruitment license needs the bank deposit of RMB 200,000 of Registered Capital and you will get the Travel License.

NVOCC License

Certificate for Non-vessel Operating Common Carrier Business. You need to provide vehicle registration certificate, qualification (clarification of the type of cargo required - regular or container), etc.

Frequently Asked Questions About Company Registration

How much does it cost to set up a foreign-owned company in China?

The cost depends on the company type, the scale of company and the industry. If you want a specific quotation, please contact us directly.


What is the requirement of a foreign-owned company?

At least one of the shareholders is from a foreign country. 


I haven’t rented an office yet, can I set up a company first?

Registering a company in China requires an office and requires the provision of a lease agreement, a copy of the real estate license, and other related materials. If you haven’t decided where your office rental is, we can help you to find the best office and provide you with address registration.


Will the company be able to start operations after obtaining the business license?

After obtaining a business license, there is also a need for public security records, official seals, corporate seals, and financial seals. Meanwhile with tax registration (within 30 days of obtaining business license). Meanwhile, open a bank account and apply for an “account opening license”.


What will happen if the registration fund cannot be paid after the subscription period expires?

  • If the shareholder cannot pay, it will constitute a breach of contract with other shareholders and bear responsibility for breach of contract.
  • If someone claims a claim from the company, the shareholder who fails to make a timely contribution shall bear the liability for repayment or compensation for the unfunded part.

What processes do I need to deregistration a company?

The entire process of deregistration write-off the company is generally about 5 to 7 months.


How to fill in the company’s business scope?

The company law stipulates that an enterprise may not operate beyond the business scope of the business license, otherwise it will face a fine. Therefore, we must first determine the main operations to ensure that the company can legally operating these industries. If you are unsure whether to do the scope added, you can later go to the State Administration for Market Regulation (SAMR) to change the scope of your business.


What is the limit on the number of board members of a limited liability company?

If a limited liability company has a board of directors, its members are three to thirteen. A limited liability company with a small number of shareholders or a relatively small company may have an executive director without a board of directors.


Can a limited liability company not have a board of supervisors?

A limited liability company with a small number of shareholders or a small scale may have one to two supervisors and no supervisory board. However, state-owned sole proprietorship companies must have supervisory boards.


Who can become the legal representative of foreign companies?

Setting up a company in China requires a legal representative. The legal representative may be Chinese or foreigner. However, the legal representative may be one of the shareholders, or it may be an appointment system (the position is the chairman, executive director or manager).


How to name your company in China?

In China, the official name of a company consists of four parts: administrative region, designation name, industry characteristics and organizational form. The designation name includes two or more Chinese characters. Industrial characteristic includes the name of the products, business or industries such as trade, advertising, etc. Organizational form includes limited company, liability limited company, etc.


How to fill in the company’s business scope?

The Chinese company law stipulates that an enterprise may not operate beyond the business scope of the business license, otherwise it will face a fine. Therefore, we must first determine the main operations to ensure that the company can legally operating these industries. If you are unsure whether to do the scope added, you can later go to the Administration for commerce and Industry to change the scope of your business.


What is the difference between branch and subsidiary company?

  • A branch company is a branch of the company. It has business qualifications but does not have legal personality, and cannot independently assume civil liabilities. Its civil liability is bared by the company that establishes the branch company. The name of the branch company has to set up branch name in front, followed by the name of the company plus a branch location;
  • A certain amount of shares of a subsidiary are held and controlled by the parent company, but they have independent legal personality. Civil liability can be assumed independently and externally according to law, and the parent company is not liable for the debts of the subsidiary company. Subsidiaries can name themselves without adding the parent company’s name.

What should I do if the registration fund cannot be paid after the subscription period expires?

  • If the company does not intend to continue to operate, it can directly deregistration or transfer.
  • It is possible to extend the capital contribution period by amending the statutes; this method should be the most cost-saving, but it must be approved by all shareholders.
  • Find someone to help advance the capital, and the registered capital will actually be paid.
  • Shareholders who fail to timely contribute capital can be paid by other shareholders or transfer shares.
  • Go to the State Administration for Market Regulation (SAMR) pre-filing.
  •  to handle the change of capital reduction.

What is a branch office? Is a branch company qualified as a corporate legal person?

A branch company refers to a company that establishes a business activity outside its residence. Branches do not have corporate legal personality.


What is the difference between a Company Limited and a  Representative Office (RO) in China?

Although Representative Office (RO) can not conduct any direct profit-making commercial activities, compared to companies with a certain scale, foreign companies have a lot of role in establishing offices. For example, firstly, foreign agents in China may cooperate with bonded warehouses or import-export companies for operations. Secondly, for precision equipment manufacturers in the mainland for after-sales service. Thirdly, the Foreign trade importers and exporters who intend to enter the Mainland  China market will cooperate with the Mainland China’s foreign trade import and export companies  to complete the import and export actions. Basically setting up an office will have the function of a similar trading company. Lastly, intellectual property enterprises may authorize the use of their property rights on behalf of their parent company in China and have the ability to supervise the infringement of pirated copyrights.

In the process of applying for the establishment of Representative Office, the examination and approval authority of the Chinese government on the establishment of a foreign company office is relatively strict. Mainly from the establishment of the subject qualifications, location, chief representative or representative of the qualifications and credit status and other aspects of the review and restrictions.