Why Do More and More Foreigners Set Up Companies in China?
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1.
Due to the Russia-Ukraine conflict and the explosive COVID-19, many countries have experienced economic dilemmas, such as inflation and high foreign debt. Some countries even declared bankruptcy.
However, even in this development environment where economic development is extremely unusual and unexpected factors have brought serious impact,China has achieved positive economic growth, which is rare in the international community.
According to data released by the National Bureau of Statistics on July 15,the GDP in the first half of 2022 reached 56,264.2 billion CNY, a year-on-year increase of 2.5% at constant prices.
In terms of industries, the added value of the primary industry was 2913.7 billion CNY, a year-on-year increase of 5.0%; the added value of the secondary industry was 22863.6 billion CNY, an increase of 3.2%; the added value of the tertiary industry was 30486.8 billion CNY, an increase of 1.8%.
Moreover, experts predict that China's economy will march into a definite upward route in the second half of the year, helping to achieve medium-to-high-speed economic growth throughout the year.
The growing resilience of the Chinese economy has attracted a large number of foreign investments. Many foreigners are trying to come here to open companies and open up the Chinese market.
2.
Companies registered by foreigners in China fall into two categories: joint venture and foreign-owned.
Joint Venture
it means that the foreigner needs a Chinese citizen to start the company with him. In this case, the Chinese representative can handle most ofthe procedures. Foreigners who abroad only need to send the relevant documents of company registration by mail.
Foreign-Owned
it means registering a foreign company in the name of a foreigner (or a Hong Kong, Macao, and Taiwan resident). If theforeigner is cannot enter the country for not having a valid visa, he/she can provide a copy of their passport certified by the Chinese embassy or consulate abroad to entrust a professional agency in China to handle the registration.
3.
Whether it is a foreign-owned or joint venture, the process and procedures for registration are the same as domestic companies.
Steps to register a company
1.Submit an online application.
2.Submit required documents to the industrial and commercial departments.
3.Obtain a business license.
4.make official seals(Chinese & English versions), financial seals, and legal person seals.
5.Register at the tax bureau.
6.Open a bank account.
4.
Registering companies in China not only creates conditions for doing business in China but also solves the problem of visas for coming to China.
If a foreigner has registered a company in China and operates it legally and normally, he/she can apply for a visa as the legal representative and conduct transactions with the company account in China.
In addition, Chinese law stipulates that people with student visas cannot work in China for pay. However, if the foreigner’s student visa states "创业(Entrepreneurship)", there can be a buffer period of 1-3 months before registering the company, and the foreigner can legally get paid before the student visa is converted into a work visa.
Even with a work visa, there are restrictions on the employment of foreigners in China. They are allowed to have one employer, and the job position and location are limited. With a work visa alone, it is difficult for foreigners to earn extra income in China.
But if a Chinese company is registered, things change. Because companies registered as independent individuals can sign contracts with other companies and make profits, which are counted as legal income for foreigners in China. Note that, in this case, the foreignercannot apply for a visa as a legal person of his own company.
5.
Some friends may still hesitate. Won’t it be nonsense if I do not have enough money for opening a company?
No worries at all! At present, there is no minimum requirement for registered capital of Chinese companies. And the subscription system is adopted, which means, you can register a company and do business without any capital contribution.
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