Registration of a Legal Entity in China

Most of our services do not require registration of a legal entity in mainland China.
For example:

If your product or service is to be sold in mainland China and you are going to interact with Chinese individuals, you will need a bank account.

Key Differences

独资 公司 (dúzī gōngsī) - individual company (or individual entrepreneur)

• You can register a company with just one founder who has a 100% share in the authorized capital. The founder can be a non-resident from another country.

• Liability is limited to the founder's personal property (for example, a Chinese limited liability company may be held liable within its authorized capital only).

• Image: there is a risk of distrust in your company from your Chinese contracting agents.

• Tax burden:

  • 6% VAT + income tax – when company's annual turnover is up to 1M CNY

  • 13% VAT + income tax – when company's annual turnover is 1M to 3M CNY

  • 16% VAT + income tax – when company's annual turnover is 3M+ CNY

有限公司 (yǒuxiàn gōngsī) - limited liability company

• The company must have at least two founders to be registered

  The authorized capital can be shared in 99:1 ratio. One founder is a so-called legal representative, 法人 (fǎrén), we call it CEO. Another founder is a supervisory board representative, 监事 (jiānshì). The supervisor acts as a guarantor for the legal representative. Both founders may be non-residents from another country.

• Liability is limited to the authorized capital

  The minimum authorized capital for an LLC is 10,000 CNY.

• Tax burden:

  • 6% VAT + income tax – when company's annual turnover is up to 1M CNY

  • 13% VAT + income tax – when company's annual turnover is 1M to 3M CNY

  • 16% VAT + income tax – when company's annual turnover is 3M+ CNY

We can offer you two registration zones depending on where you are going to place your company (Shanghai in the example below):

1. Special economic zone

This zone is excellent for registering companies with foreign authorized capital. The main advantage is the speedy document processing and registration that takes 30 calendar days to obtain a business license (营业 执照 yíngyè zhízhào).

License to conduct business in China

The license is valid for 20 years from the date of issue.

The license states:

• Company's name

• Legal representative's name

• Categories of business activities

• Authorized capital

• Registration address (may differ from the actual address)

2. Regular economic zone

The regular economic zone is intended for residents of China, but is also suitable for foreigners who plan to open a business in China. Registration takes up to 60 calendar days; however, we have had cases when the registration was as quick as in the special economic zone.

How much does it cost to open a company in China

Authorized capital for a company in China

As a rule, the larger is the company's authorized capital, the faster and more efficient it deals with both government bodies and Chinese contracting agents. The authorized capital also depends on the business activities and the legal form. In particular, registration or reorganization into a joint stock company (股份 公司 gǔfèn gōngsī) require the minimum foreign authorized capital of 10,000,000 CNY, the presence of at least 8 Chinese citizens as shareholders in the company, and ideal financial statements for 12 months.

Obtaining an export-import license

If you are going to sell products in China, you will need an export-import license that can only be obtained having a valid business license. Obtaining an export-import license costs about $500 and depends on the category of products to be imported. Obtaining such a license takes up to 50 calendar days.

Opening an account in a Chinese bank

To open an account in a Chinese bank, you will need the following:

• A valid license for conducting business in China

• Tax registration details

• An accounting service contract

• Physical presence and identification documents of the company's legal representative (CEO)

Do you want to register your own company in China? Optimize your time: contact us to learn about all the ins and outs.