Incorporation of Company Just Needs 20 Workdays

No restrictions on foreign residents to incorporate a private company in this fast-growing market, the whole process of business registration is the same as local citizens.

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Why choose Incorporating and Establishing a Limited Liability Company in China

A limited company and Chinese LLC ( limited liability company ), LLP ( limited liability partnership ) in mainland China are incorporated in terms of the latest enterprises laws of business registration act of 2014. There have many advantages for registering a Chinese limited company or a partnership and the owners of the company will be as the shareholders to contributes investments which they are interested in using the company to develop their planning of business in the market of mainland China. Certainly, all of the shareholders can share the profits from their owned China limited companies.

To start a limited liability company incorporation is affordable and the whole procedure can be done within 3 weeks ( around 20 working days ), when you deciding the most reasonable and optimal corporate structure for your China LLC or LLP, you have to consider the best solution of maximizing profits and the planning of business management and corporate development strategies and so on. There have many regulation and laws, culture and legal compliance in this great country with rapid expansion and powerful economic performance, here local governments are reforming and creating a brand new environment of investment to assist domestic companies and foreign enterprises acclimatizing to the changeable international political and economic environment.

Benefits of Incorporating a Chinese Limited Liability Company

As a legal registered limited liability company is the most popular company type in mainland China, well deserved reputation and required registered capital for entity status can provide to your clients additional confidence to get orders and incomes. Limited companies have more businesses opportunities due to all company register information and corporate credit rating will be published on the websites of different department offices, such as: tax bureaus, industrial and commercial administration bureaus. If have any black records on these website systems, no any purchasers and suppliers want to deal with them. The most important and major benefits is that the shareholders or owners do not need to undertake the private assets in case of Chinese company bankruptcy.

Advantages for Applying for a LLC for Non Residents

1. Low opening fees and running costs and as the best business type and company structure be popular with global investors which means foreign enterprises and non residents can jump into the China market comfortably.

2. Do not need to inject the registered capital at the beginning, this requirement has been postponed that oversea shareholders can free choice the amount and timings to inject the investment capital. China government allows foreign shareholders injecting the registered capital within 30 years.

3. Since 1st May 2018, tax office has reduced the VAT tax rating comprehensively for different industries.

4. Small and micro businesses can apply for the policies of taxes reduction according to different scale and business activities.

5. Most of industries cancel registration systems, change to commitment system which means encourage and open more limits industries, integration with the world economy.

6. The most important advantage is that you can through registering a local limited company, LLC or LLP to do business, do not forget that China is the largest consumer market in the world.

7. Holding a local company to hire employee and help foreign staff obtaining visa residence permits easily.

8. Establish a own business entity to register Chinese trademark to do business and electronic commerce.

Can a WOFE and Joint Venture be a Limited Liability Company

Exactly, whatever the type of China company is, WFOE and Joint Venture also can register to be the limited liability company and the costs and procedure of company establishment are the same here, and WFOE and Joint Venture also can obtain the same taxpayers degree and share the same rights and tax ratings. A WOFE and Joint Venture which means included non residents as the shareholders and the structure also can be LLC or LLP.

Difference of LLC, LLP, WFOE, Joint Venture and Domestic Company

First, all of them belong to limited liability companies, there have not any difference with procedure of registration and taxes rates. All types all can be approved from local industrial and commercial bureaus and tax offices easily. And all these commercial structures can be registered as LLC or LLP.

1. WFOE means the corporate shares wholly owned by non residents, like, individual foreigners or oversea existed enterprises.

2. Joint Venture means the hold shares owned by both China and foreign residents. And the foreign shareholders ( individuals or oversea existed companies ) have to hold shares more than 25%.

3. Domestic Company means the whole shares owned by local Chinese residents ( individuals or registered local companies ).

Timeline and Procedure of registering a LTD, LLC, LLP

Stage 1, Chinese company name registration and application, 3 working days.

Stage 2, Sign official legal documents and register forms, 1 working day.

Stage 3, Submit to local industrial and commercial bureaus to obtain business license, 8 working days.

Stage 4. Apply for a Chinese local bank to open a bank account, 3 working days.

Stage 5. Tax registration and apply VAT invoice machine, 5 working days.

Stage 6. Apply for import and export permits and licenses if you need, 7 working days.

The whole process and procedure, our consultants and lawyers will help you completing, all documents and forms we will courier to you, and will submit to government approval. The whole procedure will be done according to above timeline.

Focus on Foreign Business Services

If you are a non Chinese resident and look forward to do business in mainland China, you should find a local cooperate organization or laws firm instead of an ordinary company formation agent, even though there are many company registration agents can help you completing the limited company registration but you also have to consider if they can offer the follow up services for different stages of development and growth. Moreover, your China LLC or LLP as a legal registered company and must adopt different financial strategies and structural adjustment to match with changeable policies and law regulations. So you may hire our dependable senior consultants to help you making a series of business plannings whatever your type of company is and whichever nationality you are from.

In conclusion, with our professional and international elite team fully capable of being responsible for your China companies from company establishment, licensing, taxation planning and declaration, internal auditing, human resource management, visa residence permit, bank maintenance to trademark registration, taxes breaks, government inspection, permits, legal compliance in terms of different growth stages of enterprises development.

Why SMEsChina Teams

Our confidence depending on our remarkable achievements and rich practical experience come from long times foreign corporation services and succeed in helping our customers increasing their opportunities for advancement and expanding influence of brands in Chinese market since 2001. Our mission is helping each other together to overcome all difficulties and to realize our common dreams.

Our teams will give you better suggestion and businesses plannings if you want incorporating and establishing a limited liability company ( LLC or LLP ) in mainland China. Our services and solutions are assisting large number of corporate clients succeed in doing their businesses here. If you wish to be one of us, you may contact our incorporation consultants immediately.

This is a collection of guidance on the requirements of taxation, legal documents, registered capital, legal representative, supervisor, business scope, costs and the relevant information of reference in the process of incorporating a company in mainland China. If your business idea does need to set up a company in the Chinese market, this is a right place for your studies.

Our Company Incorporation Service Items as Following:

  • Assist global customers to jump into China market.

  • Collection, approval, and verify the documentation prepared by customers and our teams.

  • Offer a legal virtual office address to obtain the approval of registration.

  • Name search and submit application, get the approval of the corporate name.

  • Documents and forms preparation, and signature of the corporate shareholder(s).

  • Apply for the certificate of registration of foreign owned enterprise approved by the local Municipal Commission of Commerce.

  • Obtainment of the business registration license from the local licensing authority, know as: 5-in-1 business license.

  • Issuing of the corporate stamps, known as corporate seals.

  • Documents collection and submitting for tax registration, and VAT taxpayer application.

  • Basic and capital accounts opening and capital account declaration.

  • Government cost, translate fee, and drafting of the legal files and forms.

  • Import and export license registration and permits application.

  • Yearly administrative and maintaining services, such as license renew.

  • Annual bookkeeping and tax declaration services for income tax report, annual audit, government inspection, tax final settlement.

  • Other optional service selections, such as: HR, social insurance, housing fund, VISA and resident permit, trademark, etc.

With the implementation of the New Foreign Investment Enterprise Law, China is encouraging more and more oversea companies to join this emerging market through the further openness of various policies and regulations, such as: lower registered capital system, new 5-in-1 business license, efficient account opening process and more open market access system. Now, start up a Chinese WFOE has become a simply and comfortably experience, even you do not need visiting China personally. SMEsChina assists you completing the whole process of establishment confidently by our experienced teams and lawyers.

Shareholder(s) / Owner(s)

Any existed foreign companies, foreigners ( nonresidents ) can be the shareholder(s) of a China WFOE, and obtain the approval of certificate of business registration to operate daily businesses and transactions. Before setting up a WFOE in mainland China, you have to make a decision, who will be the shareholder(s), known as owner(s), because shareholders have the right to distribute the final profit of after-tax. Learn more: Qualifications and Legal Requirements of Shareholder

Corporate Shareholder(s)

A foreign parent company ( existed corporation ) as the shareholder to own the 100% stocks ( shares ), need to register a Chinese subsidiary company as a wholly foreign owned enterprise, and the Chinese WFOE as an independent subsidiary to operate businesses in local market. Foreign parent company as the controlling party, has to obtain notarization and authentication documents for the certificate of registration of foreign parent company issued by the Chinese embassy in your home country.

Individual Shareholder(s)

Non residents also can be the shareholder(s) of a WFOE, and you have to apply for the notarization and authentication documents for your passport issued by Chinese embassy in your country.

Legal Representative of a Private Business

Legal representative, known as: legal person, or executive director, appointed by shareholder(s), an individual shareholder also can be appointed as the legal representative, no nationality restrictions, legal representative has to apply for the notarization and authentication documents of passport issued by Chinese embassy. If legal representative is a Chinese, need original ID. Learn more: Legal Representative Requirements

Corporate Supervisor

Supervisor, known as: senior secretary, appointed by corporate shareholder(s), no nationality restrictions. An individual shareholder also can be the position of supervisor. But according to Chinese company laws, the supervisor cannot serve as legal representative at the same time. Foreign supervisor just needs the passport copy and photo, Chinese supervisor needs original ID and photo. Learn more: Legal Requirements of the Supervisor

Business Scope

Known as: business activities, you have to select a list from national economic industry classification and obtain approval of business registration, whatever your industry is, you must apply for the business scope when you submitting the application of certificate of registration. Also, different business activities mean different taxation rates, such as: trade, service, engineering, etc. Here, SMEsChina teams suggest you to learn the business scope from our guidance: A Collection Of Guiding Corporate Business Scope.

Registered Capital

Known as: investment capitals, corporate shareholders act as investors and fulfill their capital contribution obligations. China government allows foreign shareholders to inject the registered capital with 30 years once local corporation be approved. Registered capital will be transferred from oversea shareholder’s account to Chinese corporate account after exchanging to RMB currency.

Setting up registered capital is a mandatory provision you have to comply with that, if you are deciding to establish a Chinese business. Traditional trade or service industry, the minimum registered capital is 20,000 USD or Euro. About more reference of capital of China companies, suggest you reading our guidance: Company Registered Capital.

Requirements of Incorporation of Company

Key Structure of WFOE:Required Documents:Remarks:
Corporate ShareholderNotarization and authentication documents for the certificate of registration of foreign parent company issued by the Chinese embassy. Learn more: Embassy Notarization Authentication Documents2 sets, bilingual
Individual ShareholderNotarization and authentication documents for the passport issued by the Chinese embassy. 16 years old at least. Learn more: Embassy Notarization Authentication Documents2 sets, bilingual
Legal Representative – Chinese PeopleOriginal ID card, photo, 16 years old at least.none
Legal Representative – NonresidentNotarization and authentication documents for the passport issued by the Chinese embassy. 16 years old at least. Learn more: Embassy Notarization Authentication Documents2 sets, bilingual
Supervisor – Chinese PeopleOriginal ID card, photo, 16 years old at least.none
Supervisor – NonresidentPassport copy, photo, 16 years old at least.none

Taxation of Chinese Companies

Whatever your corporate type is, all taxes of the company are consistent with the local resident enterprises, such as VAT, profit tax, personal tax, additional taxes, and so on.

Basic Taxes:Service Activities:Trade Activities:Engineering and Installation:
VAT – Value Added Tax6%13%9%
Corporate Income Tax – Profit Tax

( less than 1 million RMB each year )

5% ( preferential tax rate )5% ( preferential tax rate )5% ( preferential tax rate )
Corporate Income Tax – Profit Tax

( 1 – 3 million RMB each year )

10% ( preferential tax rate )10% ( preferential tax rate )10% ( preferential tax rate )
Corporate Income Tax – Profit Tax

( more than 3 million RMB each year )

25%25%25%

Prices and Costs of Setting up a China Business

Service Industry

$4,950first year
  • Government Costs
  • Certificate of Registration
  • Business License
  • Seals/Stamps
  • Virtual Business Registration Address ( 12 months )
  • Annual Tax Compliance ( 12 months )

Trade Industry

$6,450first year
  • Government Costs
  • Certificate of Registration
  • Business License
  • Seals/Stamps
  • Virtual Business Registration Address ( 12 months )
  • Annual Tax Compliance ( 12 months )

Frequently Asked Questions

The whole procedure of WFOE registration needs 3 weeks, and after getting the approval of license registration, you may open a bank account within 1 week, so you can run your businesses around 1 month after you making a decision to register a wholly foreign owned enterprise in mainland China. Also SMEsChina suggests you reading another guidance edited by our lawyers: 20 Workdays Setting Up a WFOE in China

Because a trade company needs another procedure for the application of import and export permits. If your trading business does not need to apply for them, the cost of setting up is the same as service industry.

Due to the latest reforming of business registration for startups, the bank account opening process is getting easier, even you do not visit China personally.

Exactly, in China, whatever your industry is, you have to report monthly incomes and expenses, and profits, if you do not have a local full time accountant, you can entrust SMEsChina financial center to get supporting on monthly tax return.

Do not worry about that please. Before SMEsChina lawyers getting your orders, we will confirm all required documents of legal compliance for your company registration. In case of misfortune, you can not obtain the business approval of WFOE registration, we guarantee a full refund.

Your decision, if you plan to rent a business office to register your WFOE, also this office address can be approved as your registered address of license. If you do not want that, you can contact our lawyers to provide a virtual registered address to obtain approval of registration.

An available Chinese company name decided by your teams with your brand name and both languages. Such as: BASF Catalyst (Shanghai) Co., Ltd. The corporate name of BASF, includes BASF (brand name), Catalyst (industry), Shanghai (registration area), and Co.,Ltd (limited company). Detail reference of company name, you can link our guidance: naming rules and requirements.

SMEsChina teams previously published a guidance: Top 2 Categories of Chinese WFOE, consulting and trading businesses are the most popular types for foreign companies, if your company involves cross-industry business activities, do not worry, a consulting WFOE also can apply for the trade activities, the same reason, a trade company also can select consulting and service activities.

As a foreign shareholder, you can pay off the registered capital within 30 years, you can inject the capital anytime from your oversea account, but for activating the functions of banking, SMEsChina suggests you to transfer 500 USD to your China company’s account once account be approved, the reason of injecting 500 USD at the beginning, is to keep the corporate account valid.

In China, a company must include 4 key people as the corporate structure, shareholder(s), legal representative ( executive director ), supervisor ( senior secretary ), and financial manager ( accountant ), then can be obtained the approval of business registration. Also, you can appoint other people to set up a board of directors or general manager, more reference of company structure, you can link to our guidance: corporate structure.

Your decision, China is actively reforming the commercial registration system, and it has become more and more convenient for foreign companies to register their business entities here. After you getting notarization and authentication documents from Chinese embassy, you can register your WFOE easily and don’t need to be present in person.

In China, most of foreign enterprises have registered their business entities with service and trade industries. More guidance:

Launching Online Business in China

Setting up Consultancy Business

How to Set up a Management Company in China

How to Open a Trading Company in China

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Check if setting up a private company is right for you, how you launch a corporation depends on what business activities your company does. It can also affect the processes of registration and different requirements for your preparation.

SMEsChina focus on the growth of enterprise and providing a variety of business solutions in the area of strategy consultancy, WFOE setting up services, business registration, company formation, incorporation of company, finance and audit services, HR and payroll, corporate bank account, resident permit, immigration and visa, trademarks and legal compliance. If you have everything to set up a private business in Mainland China, you can get in touch with our teams to get more useful information and online guidance.

More than 47 million companies and small medium enterprises have registered their business entities in mainland China and over 3.5 million new enterprises are incorporated during each financial year with comfortable process of registering companies due to China government implemented new rules and regulation on business registration laws since Oct. 2014. That’s Why SMEsChina is Here.

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