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How To Register A Company in China

2018-04-22 Josh ShanghaiWOWeng


For many, registering a company in China seems like an impossibility. There's a language barrier, confusing and ever-changing regulations, and general uncertainty that can scare off those considering the idea.

 

However, after a clear look at the processes and requirements of company registration, you may find that it's not as difficult (or expensive) as you thought.

 

Here is a quick guide on company registration in The People's Republic of China, along with all the documentation required.

 

Register Your Company in 10 Steps (3-4 weeks)

 


1. Select Industry

 

Before registering a company, you will have to select the industry which matches your business operations best. This will also influence the business scope of your company.




2. Registered Address

 

An address is mandatory to register your company. During the process of registration you will need to provide a rent contract (minimum length of one year) where you will register your company. Most office buildings will provide this. Sometimes a deposit may be necessary to pay to get this contract or possibly the entire cost of the rental contract.

 

Be careful, when choosing the address and before signing your rent contract, that you make sure that this office is eligible to register an address on it. Some addresses cannot provide this or may not be eligible for certain licenses.

 


3. Registered Name of Your Company

 

Your official company name must be structured according to your city, the name that you decide, your industry, and then company classification.

 

  • Name of the City - Given Name - Industry - Type of Company

  • For example: Hangzhou “Your Business” Technology Co. Ltd

  • Name of the company MUST be in Chinese.

 

Finding a good name which has not be used before by any other company can be quite a daunting task, especially when trying to choose a name which matches your business and your branding. Start this process as soon as possible to avoid wasting any time once you get started.

 


4. Articles of Association

 

Articles of Association is the “shareholder’s internal law” of your company. This document will include:

 

  • Company Name & Address

  • Registered Capital

  • Legal Representative

  • Business Scope

  • Shareholder's Name(s)

  • Budget, Accounting, Etc.

  • Investment Type, Amount & Timing

  


5. Business Scope

 

Depending on the industry that you have selected, you will have the possibility to choose the business scope of your company. Business scope will include what your company is legally allowed do. If you operate a business which is not included within your business scope, you'll more than likely face a variety of issues. Business scope will also permit you to open fapiao regarding this business operation so your clients/customers can claim their expenses properly.

 


6. Shareholder Structure

 

This includes your Board Members Nomination, Supervisor Nomination, Legal Representative Nomination, etc.

 

Your company will have to nominate select individual’s and create your shareholder’s structure.

 

Who is the owner of the Company?

 

  • It could be an individual or another company.

  • You must have at least one shareholder.

  • % of the ownership for each shareholder needs to be declared.

 

You will also have to decide on the board members of your company. You will need at least THREE people. There is no restriction to whom you can set as a board member, although many companies often choose their shareholders. Alternatively, you could decide to not have a board and nominate only a Board Executive Chairman, once again with no restriction as to who you appoint.

 

Your company supervisor also needs to be nominated. You need at least one supervisor or a supervisory board (at least three). Supervisors cannot be members of the board referenced above.

 

Legal representative will be the one who represented and signed for the company.

 

All of these roles can be held by foreigners or Chinese nationals. To open a company, you will need a minimum of TWO people. An individual can be the Legal Representative, Board Executive and only shareholder, however, it cannot be the supervisor of the company at the same time.

 


7. Registered Capital

 

To register a company there is no minimum requirement for the amount you set as your registered capital. You DO NOT have to put this money into the company, but you DO have to declare it.  

 

Why?

 

A registered capital is still necessary to be set, as it will be seen as a “liability” for the shareholders in case of bankruptcy. Shareholders themselves can decide when and how (cash or not) the capital will be paid-in. There is no time limitation on when you can decide to put the capital into the company.

 

For strategic reasons, using a higher registered capital can attract potential clients and partners. Therefore, an extremely low level of registered capital is not recommended.

 

In the case you decide to close the company and there are not outstanding debts, this capital would not be required to be paid-in.

 


8. Passport/Business License

 

You will have to provide your passport, Chinese ID, and/or business license of companies which are either shareholders, board members, supervisor and/or legal representative of the company.

 

If your shareholder is a foreign company, an authentication process is required.

 

Some local governments may require a face to face authentication when applying for a new company. Therefore, shareholders may have to, at least once, go physically to the Industrial and Commercial Bureau, the bureau which manages company registration.

 


9. Business License Application & Company Seal

 

Today, Chinese businesses can apply almost entirely online. However, Foreign Invested Enterprises or WOFE(s) are still required to fill out a formal application.

 

Your company seal can be obtained after receiving your business license. That is the only cost that your company will have to pay the government during the process, if not going through a third-party to register your company. Official seals may cost between RMB 500 and RMB 1000, depending on the type of company.

 

 

10. Business License Record (Online Registration)

 

After registering your company and getting your business license, you still need to register it. People often forget to do this step and may undergo problems when applying to open bank accounts or other licenses, such as an Import & Export license.

 

Seems easy, right?

 

Are you looking to start your own company in China? Don’t worry, you don’t have to go through it alone. Luckily for you, there are several companies that work to help people get their companies started here in the Middle Kingdom.

 

Some options are expensive, providing luxury service to MNC’s and global leaders looking to come to the China market. However, if you’re the average joe looking to transform into a Chinese entrepreneur overnight, you probably want to find something more affordable.

 

*Shameless plug alert!*


The reason I know so much about this topic is that I happen to work for a company called niHUB that offers this service to expats and foreign companies. Here's more information about that if you're interested in kickstarting your business here:

niHUB Innovation Center offers affordable company registration to expats and foreign companies looking to startup and scale in the Chinese market! niHUB provides affordable company registration for early-stage startups and entrepreneurs in an effort help them avoid the expensive costs of consultancy companies or international law firms.

 

Company registration fees range between RMB 3000 – 6000 depending on company type and location of registration. You can send an email to info@nihub.co if interested in getting your own company started today!

 

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