As an individual household and sole trader in mainland China that they have less prestige and most of clients, customers and suppliers do not want trading with individual household and sole trader. China enterprises owners prefer to deal with legal registered Chinese limited company whatever they are WFOE, domestic company or partnership enterprises. The main disadvantage of a individual household or sole trader is no actual investment capital and so much of individual traders do not have any office and employee.
1. Good corporate structure and risks of liabilities
2. Legal registered address and fixed office
3. Perfect credit record and taxpayer degree
4. Can issue VAT invoice
5. Can apply for import and export licenses
6. Can apply for any special permits
7. Can open multiple of bank accounts
8. Good social insurance record for employees
9. Can hire foreign staff and help them obtaining residence permits
So for limited companies there maybe at risk of losing contracts and the business deal will face to fail. If you intend procuring goods or technical products or consulting services from individual households and sole traders, you need thinking carefully about the real risks when you deciding dealing with them. Unlike the limited companies need minimum capital requirement and as the assurance to clients, individual households and sole traders do not need the minimum capital required.
If you are planing to start register a local limited liability company, you may get in touch with our online consultants.
Here we recommend you more links to know about limited companies incorporation and process of registration.