China Company Incorporation

China is an emerging market with an immature legal system and poorly-enforced laws, especially in more remote provinces. Investors who incorporate a company in China should be aware of local conditions before proceeding with China company incorporation.

Under the terms of its accession to the World Trade Organisation (WTO), China is obliged to protect intellectual property rights. However, there have been a number of high profile cases of widespread infringements of proprietary technology protection. Investors who incorporate a company in China should be aware of this potential danger.

When incorporating in China, it is important to have a thorough understanding of the country's legal system. Healy Consultants China business setup experts have been working in the market for many years and can advise on all aspects of incorporating in China.

When incorporating in China, international profits sourced outside China and booked in a properly-structured non-resident Chinese company pay no local corporation tax.

Since the 1st of January 2008, China has standardized its complicated tax system across the country, which is good news for investors planning to incorporate a company in China. The corporate tax rate since this date has changed from 33% to 25% for both domestic and foreign companies.

When incorporating in China, note though foreign-based companies may continue to establish and maintain representative offices in China, Foreign-Invested Commercial Enterprises (FICEs) that qualify as companies under the revised company law may not establish new representative offices.

When incorporating in China, capital can be paid in installments within two years, as opposed to in a single payment.

When incorporating in China, note that a domestic limited liability company requires just one shareholder. However, investors who incorporate a company in China with this type of entity should be prepared to register a minimum capital of RMB100,000 (approximately US$14,500).

International investors who incorporate a company in China can take 100% ownership of a Foreign-Invested Commercial Enterprise (FICE) and a Wholly-Owned Foreign Enterprise (WOFE).

When incorporating in China, note that a shareholder in a Chinese entity can request that the company repurchases their shares if they oppose a merger or acquisition, if they oppose the disposal of major assets, and if the company does not distribute dividends for five years running (if it has earned profit for those five years).

When incorporating in China, cash contributions to a company must account for at least 30% of capital, and can also include in-kind contributions, industrial property and land use rights.

When incorporating in China, a WOFE or FICE must pay a minimum 20% of the registered capital into a corporate bank account in the first 3 months of incorporation, the remaining 80% is to be paid within 2 years. Under China company law, the minimum share capital for a company with multiple shareholders is just RMB30,000 (US$5K) however, the real minimal capital requirements depend on what authorities believe to be required for each specific company project.

After incorporating in China, Healy Consultants will open a corporate bank account to support the company. However, banking standards are lower in China than elsewhere in Asia and we do not recommend a China corporate bank account as part of China business set up.

China has a wide network of double taxation agreements with other countries, offering tax exemptions to entrepreneurs who incorporate a company in China.

According to the 2010 Index of Economic Freedom published by the US Heritage Foundation, China has one of the most restricted economies in the world, ranked 140th out of 157 countries.

Healy Consultants' procedures ensure that incorporating in China is as smooth as possible. Procedures include:

Before incorporating in China, our client settles our fees and signs our engagement letter.

Prior to China company incorporation, Healy Consultants provides our client a detailed engagement plan, outlining a roadmap for the upcoming engagement.

Healy Consultants legally completes China business setup, with the correct corporate structure.

Healy Consultants helps open a corporate bank account or our client to support China company incorporation. Healy Consultants will open a corporate bank account with the world's leading retail banks, including HSBC, Standard Chartered and Citibank.

Healy Consultants provides our client with a local business address details for invoicing purposes, together with telephone, fax and email support following China company incorporation.

Healy Consultants assists our client with business website building, search engine advertising, as well as stationery and logo design to support China company incorporation.

After incorporating in China, many clients ask Healy Consultants to help them obtain corporate finance, trade finance and to open merchant accounts.

Following China company incorporation, Healy Consultants provides accounting and taxation services including i) corporate structuring ii) minimising withholding tax iii) tax returns and financial statements iv) payroll and investments.

After incorporating in China, Healy Consultants offers human resource support including i) employment and entrepreneur visas ii) staff recruitment iii) payroll support local business address details for invoicing purposes, together with telephone, fax and email.

Following China company incorporation, Healy Consultants offers merger and acquisition advice, conducts business due diligence, offers internal audit support and business process re-engineering to support those who incorporate a company in China.

Following China company incorporation, Healy Consultants offers IT Support services including i) hardware purchasing and configuration ii) office network configuration iii) business website design and maintenance iv) server maintenance.

China business matching services to support China business setup.

Representative Office - Our fee for this type of China company incorporation starts at US$6,250, although total engagement costs depend on the range of professional services required.

FICE - Our fee for this type of China company incorporation starts at US$8,500, although total engagement costs depend on the range of the professional services required.

WOFE - Our fee for this type of China company incorporation starts at US$9,250, although total engagement costs depend on the range of the professional services required.

Joint Venture - Our fee for this type of China company formation starts at US$7,250, although total engagement costs depend on the range of professional services required.

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