China Company Formation

China company formation assists global entrepreneurs legitimately conduct business in one of the world’s fastest-growing economies. The following information will help you determine whether China company formation is the optimum corporate structure to fulfill international business objectives:

A foreign-owned company can obtain tax exemptions if based in a Free Trade Zone or Export Processing Zone. Furthermore, to encourage foreign investment some provinces offer preferential corporate tax rates. Although the most popular locations for foreign investors are Beijing, Guangzhou, Shanghai and Shenzhen, Healy Consultants will compare regional options and provide a professional recommendation based on our client's requirements.

China company formation is popular with foreign investors looking for a foothold in the world's third-largest economy (after the USA and EU). According to the United Nations Conference on Trade and Development (UNCTAD), China is Asia's largest recipient of foreign direct investment (FDI). Furthermore, China offers a vast labour pool which in the major cities increasingly comprises sophisticated graduates.

Following China company formation, Healy Consultants can open a corporate bank account with one of the world's leading retail banks, including HSBC, Standard Chartered and Citibank. For more information, visit our China corporate bank account page. For a wider overview of our services visit our Other services to support China incorporation page.

In its 2009 World Competitiveness Yearbook, the Switzerland-based IMD positively ranks China as the world’s 20th most competitive economy. The ranking takes into account factors including economic performance, government efficiency, business efficiency and infrastructure. Furthermore, in the World Economic Forum's Global Competitiveness Report 2009-2010, China is ranked at a positive 29th place.

Although 100% foreign ownership is permitted, the company activities allowed and minimum start up capital required varies depending on geographical region. The activities of a foreign-owned entity are restricted to those on its business license, issued by the provincial government. Because of this, it is critical for a foreign investor to carefully prepare incorporation documents. Healy Consultants handles all pre-incorporation documentation for clients to ensure the scope of business license matches the planned activities of the company. Examples of the restrictions placed on Chinese companies include the inability of a Representative Office to make sales and invoice clients in China.

Both a foreign-owned entity and a Representative Office must be located in a prime office premises pre-approved by local government and municipal authorities. Consequently, office premises eligible for foreign-invested companies are expensive to rent.

China company formation takes up to six months due to inefficient bureaucracy and complex licensing procedures involving local and provincial authorities. To highlight this, China ranks poorly as the world’s 89th easiest place to do business in the 2009 Doing Business Survey by the World Bank, which takes into account China company set up procedures, time, cost and minimum capital required to start a business. China also negatively ranks as the world's 140th freest economy in the Heritage Organisation’s 2010 Index of Economic Freedom, a measure of freedom enjoyed in business, trade, monetary, financial, investment and labour markets.

Following China company formation, all entities are required to submit financial statements and tax returns to federal and provincial authorities. Healy Consultants will assist our clients efficiently and effectively to complete this annual statutory obligation.

Forbes Tax Misery Index 2009 rated China as having the 2nd highest tax misery in the world. The index takes into account corporate income, employer social security, personal income, employee social security, wealth tax and VAT/sales. Forbes suggests the index can be used as a proxy to evaluate whether a country’s policy attracts or repels capital and talent.

WOFE - Our fee for this type of China company formation starts at US$18,500, although total engagement costs depend on the range of the professional services required.

Representative Office - Our fee for this type of China company formation starts at US$12,500, although total engagement costs depend on the range of professional services required.