Establishing A Corporation In China |
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International entrepreneurs choose to establish a corporation in China to tap opportunities in the one of the world's fastest-growing economies. The information below is a brief example of some of the issues investors who may wish to establish a corporation in China should me mindful of. |
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| 1. | 100% foreign ownership is permitted for a Foreign-Invested Commercial Enterprise (FICE) and a Wholly-Owned Foreign Enterprise (WOFE). |
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A China Representative Office (CRO) is an excellent opportunity for entrepreneurs planning to form a company in China to market the parent company and generate income in China. |
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Several tax exemptions are available to establish a corporation in China, for example a manufacturing FICE has a low corporate tax rate of 10% in certain circumstances. |
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China has signed double taxation treaties with many countries, offering tax exemptions to entrepreneurs planning to form a company in China. |
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| 5. | A China WOFE and 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. |
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| 6. | A Representative Office in china cannot invoice clients in China directly, and can only conduct market research on behalf of its parent company. |
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The process to establish a corporation in China remains difficult because of inefficient bureaucracy and complex application procedures. Furthermore, the Chinese government requires frequent, onerous and complicated accounting and tax reporting. |
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Contact Us |
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For additional information on establishing a corporation in China, email email@healyconsultants.com or call us at (+65) 6735 0120. |
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