How to Open a Company in China

Opening a business or company in China is extremely protracted, but with better economic prosperity.

It may seem ironic for someone in America or another part of the world to start a company in China. As China becomes an economic superpower, though, it might make sense for someone to start a company there. It's possible to have a successful one, as long as you understand that starting a company in China will involve exponentially more protracted start-up procedures than you'd have in the United States.

Instructions

First Procedures

1. Visit the local Administration of Industry and Commerce in the Chinese city where you're starting your company and fill out an application for company name approval. Because of China's strict stance, the name of your business will be scrutinized. If you visit your local AIC in person, the name of your company will be accepted or rejected in the same day.

2. Use the local Administration of Industry and Commerce website to print out a form that can be sent by snail mail, fax or email (see Resource 1). You can switch to their webpage so it reads in English. Mailed applications for company name approval get approved or rejected within 15 days.

3. Take any cash you used toward capital in your business, place it in a preliminary bank account and get a certificate of deposit. It's required by law that you contribute up to 20% of the initial capital toward a company in China and place it in a bank account if paid in cash.

4. Locate an auditing firm in the Chinese city you're living in to get a verification report of your capital (see Resource 2). You'll need to present this when you get your business license. This will cost you 350 Renminbi--the name of Chinese currency.

Obtaining Business License

1. Obtain your business license by filling out the official form again at your local Administration of Industry and Commerce. The registration fee will be 0.08% of your capital plus 10 Renminbi.

2. Add I.D. items with your business license form. This will be your company name approval, your company's lease, capital verification, articles of shareholder association, authorization of representation, I.D. cards and documents of all shareholders and officers, appointment and I.D. documents of all directors, supervisors and officers, your own I.D., and documents showing proof of property title if the capital was non-monetary.

3. Be patient, because the AIC will take at least 15 days to approve or deny your business license.

Company Seal, Organization Code and Taxes

1. Go to your local Chinese police department with a copy of your business license and I.D. to get approval to make a company seal. It's required by law to make a seal for a business in China.

2. Hire a local company seal maker to create your company seal, even though the company you hire needs to have a special industry permit. The company seal may cost as little as 70 Renminbi or as high as 700. Get the cheaper seal since the quality won't matter.

3. Apply for an organization code certificate by filling out a form with your local Organization Code Management Center. Add the original and one copy of your business license and your I.D. card with the application.

4. Register with both the local statistics bureau and with the local tax bureau to pay state and local tax. For both, you'll need to register 30 days after getting your business license. For the tax bureau, bring all the I.D. items you brought when getting the business license, plus a commitment letter stating all your documents are authentic.

Other Procedures

1. Place your registered capital into a new bank account. Your first bank account was merely to assure authenticity of the capital.

2. Apply with your local and state tax offices to get financial invoices and receipts. You need approval first and will need to bring a copy of your tax registration certificate and I.D. card of taxation personnel.

3. Fill out an application form with your local career service center. By decree of Chinese law, you need to turn in a form here 30 days after hiring employees in your company. The form will ask for information about your employees.

4. Visit your local Social Welfare Insurance Center within 30 days after getting your business license. Turn in their application form so your employees can get social insurance. Once you're approved for it, authorities at the SWIC will request you to open a bank account to accommodate funds for this insurance. They'll issue a social insurance registration card to you once you open the account.

References

• Doing Business: Starting a Business in China
• NSW Business Chamber: Registering a Business in China
• China Law Blog: How to Start a Business in China

Resources

• State Administration for Industry and Commerce in China
• China Findouter: Search for Auditing Firms