How to Incorporate a Company in China
China is becoming an ever-more important market on the world stage, and businesses, foreign and domestic, are seizing the opportunity to make an impact in this emerging economy. Despite the speed at which China is developing economically, its legal framework has been evolving slowly and inconsistently, and it might be difficult for entrepreneurs and businesspeople to know the current requirements involving the incorporation of companies in China. A foreign company incorporated in China is known as a "Wholly Foreign Owned Enterprise" (WFOE), and government approval might take three to five months.
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Instructions
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Register your company name with the local State Administrative Bureau for Industry and Commerce (SAIC). The name must be in Chinese and include two alternative names in case your first choice is taken.
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Prepare the relevant documentation needed for the incorporation of your company. These include reports of financing, risks, and financial forecasts, land-use requirements, employment and wages, production plans, and any requirements for public facilities. These documents may be requested by any relevant authority in later stages of the registration of your company.
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Submit a project proposal to the local government authority, which is a general business plan and budget. Such proposals are used by the local government in order to assess the company's practices and its impact on the local economy. The business plan also includes a list of the various chairpersons involved, articles of association, and lease agreements.
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Obtain a business license from the local SAIC, which should be done 30 days after the approval of your business proposal. Similar documentation to the business proposal is usually required and typically takes 5 to 15 days. After the business license is obtained, the WFOE is considered a legal entity.
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Register your company with the rest of the relevant authorities. These include the tax bureau, foreign exchange control, the statistics bureau, the customs bureau, and any authority that is relevant to the nature of your business.
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Tips & Warnings
The minimum amount of registered capital required to incorporate a business in China is the equivalent of one million Hong Kong dollars as of August 2010, which must be paid into a bank account specified by the government.
Wholly Owned Foreign Enterprises may not be listed on the stock exchange, and therefore may not present themselves as a viable option for some enterprises. In this case consider an alternative type of legal entity, such as a joint venture.
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