Company Registration process in China

Introduction

Without a doubt, China is a global economic powerhouse and a haven for investors. The country has experienced exponential growth since its economic reforms in the 1970s, making it the supreme launching tools for firms looking to expand and finance worldwide. To take advantage of this tried and true offshore investment destination, you must first complete the necessary China company registration procedures. The process of registration, which we mentioned in the article, is coming into effect from November 8, 2021.
 

If you are interested in registering a company in China, you need to follow these steps:-

1) -  Choosing a business structure: Before beginning the registration process, you must first choose a business structure. Like:-

1.  “ WFOEs (wholly foreign-owned enterprise)” – Among, common famous and certainly the suitable company formation option for foreign investors, from the legal point of view.

2.   Joint Venture Companies: -Joint Venture exist for specific purpose For a corporate JV, the most important documents are normally the joint venture contract and the company's articles of association, but it is feasible to limit this to just the articles of association. Several supporting and administrative documents are required to formally establish the company vehicle. These include the founders' incorporation certificates and copies of their identification cards.

• Letters of appointment for directors, supervisors, and the general manager.

• Certificate of occupancy from the government

3.   Representative Offices: A foreign corporation's Representative Office (RO) is an extension of that company. The foreign corporation is bound by the contract if a RO signs it. ROs are only allowed to involvein a particular or limited activities and are not permitted to gain surplus. It can only be used to aid a foreign company's activities in China, like market research, display, and publicity activities relating to the company's products or services; and liaison activities relating to product sales or services, as well as domestic procurement and investment.

4.   Partnerships: Partnership is in two form: General Partnership and Specific Partnership. It is most common form to register in china you can form A limited liability partnership is made up of general and limited partners, the former of whom carry unlimited joint and several liability for the partnership's debts and the latter of whom bear liability for such debts only up to the amount of capital contributions subscribed for. A general partner may not be a totally State-owned corporation, a State-owned enterprise, a publicly traded company, or a public benefit undertaking or public organisation. A partnership agreement shall be legitimately concluded, in writing, on the basis of agreement obtained through consultation by all partners.

5.   Limited liability company- Its definition is same as common law country it consist of one individual director, he can be of any nationality, director can be legal representative but cannot play supervision role at the same time. Shareholder can be local people or foreigner.  

These structure are widely accepted and can be used for formation of stricture.

2) Basic details of the Company: - before registration of the company you need to decide the name of the company, shareholders position, business scope, etc. To have a clear picture you need to check the client details to be filled in the form from a professional agency. You are require to carry Scan copy of director's passport, Scan copy of supervisor's passport, Scan copy of shareholder(s) passport,Email, phone number, address of company director, supervisor and shareholder(s) Chinese Embassy will help in legalizing the documents required in the company. Theabove information needs to be true so it can be easy for client to obtain the registration. 

3) Name of the company:- name of the company plays an vital role the name for registering the company is divided in three parts: before writing the name of the company you need to mention the place of registration address first. Example-(Shanghai XXX Co.ltd) after mentioning the registration address then the any name of your choice you can mention. if it’s an import and export company its needs to mention “International Company” or if its domestic company it needs to be mentioned as “Trading Company”. Incase of consulting company you can use “Consultancy Company “In the end term company limited has to be mentioned. You need to register the trademark for registration of company’s name In china who uses the name first is not followed its who register’s first for trademark places important role for registering the name of company. This is a crucial step in the process of forming a business. This is also to ensure that your business name does not conflict with that of any other existing business. As a result, you must apply to the Administration of Industry and Commerce for approval of your business name. Furthermore, the entire approval procedure could take anywhere from two to fifteen days depends on the availability of registrar.

4) Place of Registration: You need to be very specific for place of registration it depends on the business structure which place of the country will be suitable for you business you may take advice from professionals to select the place of registration.

5) Structural documents of the company: You must prepare the following documents before beginning the process of forming a company: The following is a list of controlling partners. 

▪ The list of controlling partners must be submitted to concerned charge. Furthermore, these are real owners who own a maximum of the stock in the company.

▪ Company's managerial structure– In addition, he/she must put forward the company's managerial structure. Information about the board of directors, general managers, supervisors, and legal representatives would be included. Copies of all of the directors' passports should also be attached to this document.

▪ Proof of official address– You must supply a legitimate proof of address for the company's official headquarters. Similarly, if the authorities have any questions about the company's operations, they will contact the company at this address.

▪ “Articles Of Association (AoA)’- The AoA contains crucial information about the firm, It consist of the business description, the scope of operations the company plans to pursue, the profit-making strategies to be used, the managerial structure, and so on.

▪ Request a Certificate of Approval-In this phase, you should apply to “the State Administration of Industry and Commerce (SAIC) and the Ministry of Commerce” for an approval certificate and an operating licence (MOFCOM). If you're in the food and beverage, manufacturing, telecom, or construction industries, you'll also need additional licences after you get your business certificate. 

6. Become a member of the PSB (Public Security Bureau) You'll be able to receive the corporate chops if you register with the PSB. In China, a contract cannot be validated without a chop. It will become easy for filling returns. 

7. File a tax return with the IRS: In China, all businesses will be required to listed with the Tax Bureau and follow its guidelines. As a result, various types of taxes are imposed in this country, including:

8. “Details Of Total Investment And Registered Capital”- Registered capital shall include the resources set aside to support the company's operating expenses. Similarly, the total investment will be the amount of capital and future loans from investors, banks, and other third parties.

REFERENCES:-

▪ https://vakilsearch.com/advice/what-is-the-procedure-to-register-a-company-in-china/

▪ https://silkroadinter.trade/downloada...

▪ https://www.ilo.org/dyn/natlex/docs/ELECTRONIC/92643/108008/F-186401967/CHN92643%20Eng.pdf

Written By:

Kaushiki