How to Open a Business in Shanghai

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Shanghai, China
Shanghai, China (Image: Joi, Flickr.com Creative Commons License)

China is a country with a thriving economy, as well as successes that attracts business investors from around the world. Nowhere in China is this foreign investment as abundant as it is in Shanghai. Shanghai is a city of strong economic growth. Many companies from other countries view this port city as a gateway to the Chinese interior. Whether you are a local resident with a dream of owning your own business, or are a foreign company wishing to expand into China, Shanghai is one of the best options available. Follow these steps to open a business of your own in Shanghai.

Determine what type of business you need to open. Think about whether you need a representative office, a manufacturing facility, an import/export business or perhaps a joint venture with an existing company in Shanghai. A representative office is a common selection, although highly restricted in the types of functions it is allowed to carry out. A joint venture with a local resident of Shanghai is also a popular selection due to the fact that it allows you to circumvent a significant amount of red tape in the Chinese legal process.

Find a legal representative. Any business in a foreign land will benefit from having legal counsel that can advice you on local laws and regulations. In terms of opening a business in Shanghai, having legal counsel is also important because they will help you complete and translate all of the paperwork associated with forming a company, as well as help you make sure that your operations to not violate any legal regulations.

Obtain an application to register a Foreign Investment Enterprise. This application can be obtained by the Shanghai Administration of Industry and Commerce. A link has been added to the Resources section for your convenience. The application must be completed and signed by both you and the legal representative selected in the previous step. Submit the application and wait for approval on the company name you have selected.

Draft the Articles of Incorporation for your business. Obtain the assistance of your legal counsel on this point to help make sure your documents conform to legal standards in Shanghai. Attach a copy of the approval of your company name that was received in the previous step and submit all paperwork to the Shanghai Administration of Industry and Commerce. Wait for a certificate of approval on your Articles of Incorporation.

Gather together all remaining documents. You will need to lease an office or other premises for at least one year, and obtain a copy of the lease, along with a certificate from a licensed realtor. Also obtain a bank reference from your country of origin to state that you have good financial credibility. You will also need to draft a letter of appointment for everyone who will be on the board of directors, and obtain a photocopy of the passport for each individual.

Submit all documents gathered in the previous step to the Shanghai Administration of Industry and Commerce. Wait for the Administration office to send you a certificate of business registration, which contains a unique company number for you to operate under. You have now successfully opened a business in Shanghai.

Tips & Warnings

  • Instead of using a standard attorney, you may wish to hire a business consultant in Shanghai. These consultants can provide the same legal counsel, but also help you in other aspects of operating your business. Two consulting firms to check into are PathToChina.com and GoInvestChina.com. Both of these are listed in the Resources section, for your convenience.

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