Incorporate a Company in China
International investors choose to incorporate a company in China to tap opportunities in the one of the world's fastest-growing economies. The following information will help you determine whether to incorporate a company in China to meet your international business objectives: |
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Advantages to incorporate a company in China |
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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 a tax efficient strategy ideal way for entrepreneurs planning to incorporate a company in Ch
ina to market the parent company and generate income in China. |
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Certain tax exemptions are available to incorporate a company in China, for example a manufacturing FICE has a low corporate tax rate of 10%. |
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China signed double taxation treaties with many countries, offering tax exemptions to entrepreneurs planning to incorporate a company in China. |
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Investors interested to incorporate a company in china are set to benefit from China's plans to standardise its complicated tax system across the country on 1 January 2008. Refer to a related media article here. |
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After incorporating a company in China, Healy Consultants can open a corporate bank account with one of the world's leading retail banks, including HSBC, Standard Chartered and Citibank. |
Disadvantages to incorporate a company in China |
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According to the 2008 Index of Economic Freedom published by the US Heritage Foundation, China has one of the most restricted economies in the world, ranked 126th out of 157 countries. |
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China is perceived as the 78th least corrupt country in the world, according to a 2005 Corruption Perceptions Index by Transparency International. |
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Despite widespread legal reform, the process to incorporate a company in China remains difficult because of inefficient bureaucracy and complex application procedures. |
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A China WOFE and FICE must inject a minimum 20% of the paid up capital of RMB30,000 (US$4,175) into a corporate bank account prior to incorporation. The 80% balance is injected into the account in installments within two years of incorporation. Thus, to incorporate a company in China, a substantial initial capital is required.
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For all entities, the Chinese government requires frequent, onerous, complicated accounting and tax reporting. |
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There are geographical restrictions on where a WOFE can be set up. |
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A Representative Office cannot invoice clients in China directly, and can only conduct market research on behalf of its parent company. |
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Many investors planning to incorporate a company in China are concerned about the poor enforcement of intellectual property rights in the country. |
Healy Consultants' fees to incorporate a company in China |
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WOFE - Our fee to incorporate a company in China starts at US$9,250, although total engagement costs depend on the range of the professional services required. |
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FICE - Our fee to incorporate a company in China starts at US$8,500, although total engagement costs depend on the range of the professional services required. |
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Representative Office - Our fee to incorporate a company in China starts at US$6,250, although total engagement costs depend on the range of professional services required. |
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Joint Venture - Our fee to incorporate a company in China starts at US$7,250, although total engagement costs depend on the range of professional services required. |
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Contact Us |
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For more information on how to incorporate a company in China, email email@healyconsultants.com or call us in Singapore at (+65) 6735 0120. |
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Back to China Company Formation page. |
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Buy the China chapter of Healy Consultants' Asia Business Set Up book for US$100, to order call +65 6735 0120 or e-mail email@healyconsultants.com