How to incorporate company in China?
Tetra Consultants’ ultimate guide on China company incorporation is tailored to help our international clients fully understand the whole process. Before you decide to open a company in China, Tetra Consultants advises you to read through the following comprehensive guide as requirements and regulations are stated clearly to help you fully understand the process of China incorporation.
Simply put, we can break down our China company formation engagement into four different phases:
Prior to China company incorporation, you need to understand that there are multiple requirements and steps to take so that the newly-established company will be legally compliant. Tetra Consultants is a specialized China company incorporation consultant, we will advise you of all regulatory requirements to ensure all parties are clear of the steps to take throughout the engagement.
On average, you can expect to own a China wholly foreign-owned company and a local China corporate bank account within 6 weeks depending on the business activity and corporate structure.
- The first step to understanding how to incorporate a company in China is to choose the correct business entity. The myriad of business form options may leave one in a dilemma. Determining the optimum business entity to adopt is no easy feat. After considering the advantages and disadvantages of each business structure, Tetra Consultants will recommend a suitable business entity.
- This recommendation will also be made based on the type of business activity, tax obligations, and nationalities of your shareholders and directors. Generally, for most clients, Tetra Consultants will recommend incorporating a company limited by shares.
- Once confirmed, Tetra Consultants reserves your preferred business trade name with the Local Administration of Industry and Commerce.
- Before Tetra Consultants move with the China company incorporation, you are required to provide a list of required KYC documents. Some of these documents include the names of directors and identification proof.
- Once you have understood China company incorporation procedure, Tetra Consultants will proceed to draft and notarize the company’s Memorandum and Articles of Association. If needed, Tetra Consultants can also provide translation services for these documents.
- Based on Chinese law, a company secretary and registered office are necessary for China company incorporation. As such, Tetra Consultants will also provide you with a company secretary and office. The address will be used to manage process service requests and official notices. An application to incorporate will be filed by the proposed registered agent to the Registrar.
- Once the aforementioned steps are completed, Tetra Consultants will proceed to register company in China by filing the documents such as the Memorandum, articles signed by the proposed registered agent, and an approval form signed by the proposed registered agent to the Ministry of Commerce (MOFCOM) and the State Administration of Industry and Commerce (SAIC), who will provide the approval certificate and operating license.
- After receiving approval, Tetra Consultants will courier the Certificate of Incorporation, Memorandum and Articles of Association, China company registration certificate, and other corporate documents to your preferred address. You will also be notified of your registration number.
- Simultaneously, Tetra Consultants will also assist you in acquiring the relevant Chinese business licenses. The “5-in-1” China business license will comprise a business license appropriate to your industry, an organization code, a tax registration certificate, a social security registration certificate, and a statistical registration certificate, according to the recently modified legislation.
- Furthermore, Tetra Consultants will also assist you in securing a company chop with Public Security Bureau.
- Simultaneously, Tetra Consultants will proceed to open a corporate bank account for your newly incorporated China-based company depending on your business goals and objectives. You can leverage on our extensive banking network and expect to receive your account numbers within 4 weeks.
- Tetra Consultants will contact multiple reputable Chinese banks and present your business to the respective relationship manager and compliance team.
- In most cases, the directors and shareholders are not required to travel. However, if travel is required, we will have a representative accompany you to the bank meeting. Alternatively, our team will negotiate with the banks to conduct a conference call instead or request a waiver.
- Some of the reputable banks we work with include Bank of China, Industrial and Commercial Bank of China, China Construction Bank, and Agricultural Bank of China.
- Tetra Consultants will assist you in registering with the Tax Bureau following the formation of your new Chinese corporate home. our team of dedicated consultants will continue to ensure that all services necessary for your company’s successful operation are well taken care of.
- Our team of dedicated consultants will prepare your company’s financial statements, corporation tax returns, and bookkeeping for you on a timely basis.
- Corporation tax will be imposed on both resident and non-resident businesses. You can be taxed on both local and worldwide income, unlike most other governments. In general, you may anticipate paying roughly 25% incorporation taxes, however, this will be reduced by the applicable subsidies for non-resident companies with China-sourced income and for small and medium businesses. Additional subsidies will be available for certain high-tech or promoted industries.
- Tetra Consultants will assist you to file income tax returns and audited financial statements with the appropriate department.
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How much does it cost to incorporate company in China?
- China company incorporation cost ultimately depends on the services you need from Tetra Consultants, the total engagement fee will differ.
- Our services include China company incorporation, corporate bank account opening, accounting, and tax services as well as provision of nominee directors and shareholders.