Company incorporation in China?

The People’s Republic of China offers several possibilities for foreign individuals and enterprises to do business in China. The registration and formation of a local company is often required when having a small team employed in China: it provides staff with a local office space, a China-based human resources administration, and direct control over business operations in the country.

Our Company Registration package includes the following:

  • DSC for one director and DIN for up to three directors
  • Drafting of MoA & AoA
  • Registration fees and stamp duty
  • Company Incorporation Certificate
Incorporation

Company formation and bank account opening to start a business in China fast

Wholly Foreign-Owned Enterprise (WFOE)

When targeting direct control over payments/invoicing operations in China, the type of structure required is a Wholly Foreign Owned Enterprise (WFOE, sometimes also referred to as WOFE). This type of legal entity is a limited liability company with entire foreign ownership. It allows a foreign company to locally conduct business activities in China with customers, clients, and partners, therefore offering the possibility to limit the roles of third-party operators (such as distributors, importers, factories, etc.). Its main advantage is to incorporate both the employer of record duties and liabilities, along with getting control over local operations. Consequently, this structure maximizes flexibility for doing business in China. It increases the parent company’s local autonomy and controls while enabling profit making In practice, New Horizons can incorporate a WFOE on behalf of a foreign investor while the first staff is already hired through our Employer of Record entity, in order to ensure local presence throughout the entire incorporation process. Once the company is incorporated and the business license issued, the staff employment ownership is transferred from New Horizons umbrella company to the newly created WFOE.

Sales Office

When a foreign company wants to maximize control of its staff via its own HR, legal, and administrative departments, the Sales Office is the appropriate solution. It is one of the most used forms of local presence since most of the foreign businesses only need in-country representatives for business development, marketing or brand representation. Indeed, it is common practice to rely on local Chinese partners for import, export, trading, and logistics purposes, while all financial operations are controlled directly from the headquarters abroad. The Sales Office set-up only requires a single collaboration agreement with New Horizons as your onsite Professional Employment Organization (PEO) to ensure local compliant employer of records’ services, as well as a registered office provider for the lease agreement in the preferred working location. From a legal perspective, all the office and employment liabilities in China are transferred to New Horizons, which reports directly to the foreign company’s headquarters.

  • Representative Office

    When a foreign company wants to maximize control of its staff via its own HR, legal, and administrative departments, the Representative Office (RO) is the appropriate solution. As for the Rep. Office, this type of local presence doesn’t allow foreign businesses to conduct any business activity but offers security when hiring and payrolling a team. The office and employment liabilities are under the direct legal responsibly of the headquarters of the foreign company. New Horizons offers incorporation, payroll and tax services for both the RO and its staff, and acts as an external services provider. On the other hand, it limits the flexibility of hiring staff in different cities – only possible throughout the opening of additional local branches, or via New Horizons’ PEO solution. In practice, it is widely used for the hiring of large teams for marketing support activities in China.

  • Joint Venture

    A Joint Venture (JV) is the most complex form of organization in China, due to the necessity of partnering with a local Chinese company. New Horizons can assist with the legal support in all major cities in China. While the incorporation process takes several months – after round of negotiations in order to determine the final structure of ownership of the JV -, it allows the foreign company to benefit from a local partner experience and in-country network. The JV can conduct business in China as a normal Chinese company, under the terms and conditions of the partnership regarding profit sharing, technology ownership, and operational control. This type of local presence is required when targeting a restricted sector of activity or when the support/experience of an exclusive local partner is needed. On the other hand, the management and performance of the JV requires a specific set of skills and experienced managers, from both the foreign company and its Chinese partner.

Shanghai Free Trade Zone Company Registration
  • Details about the Shanghai Free Trade Zone

    • Automobile manufacture and design
    • Beverage and liquor
    • Biological medicine
    • Commerce and trade service
    • Cosmetics
    • Export trading
    • Financial services
    • Media
    • Medical apparatus
    • Professional services
    • Shipping
    • Social services

  • Benefits of Setting Up Your Business in the Shanghai Free Trade Zone

    There are many benefits to setting up your business in the Shanghai Free Trade Zone. Like Hong Kong has done before, there are free trade opportunities and new innovations that encourage foreign investment. There are no limits to the scope of the business. Foreign investors can establish Wholly Foreign-Owned Enterprises and operate these businesses without having to partner with Chinese companies or employees. This option provides you with greater control over the operations of your business, as well as the ability to increase your revenue and profits. Foreign entities can open a limited company in the Shanghai Free Trade Zone with no real capital requirements, providing an important gateway into the Chinese market. Some of the most notable benefits of opening a company in the Shanghai Free Trade Zone include:

    • The minimum investment necessary – You can open a business in mainland China without having to invest in any real estate, minimizing your initial capital investment. This benefit allows you to enter a new market that may have been previously closed off to you.
    • Faster setup – With the help of a PEO in China, you can launch your business in a matter of days
    • Easier entry – The Shanghai Free Trade Zone encourages foreign investment. You can benefit from incentives for your investment in the region.
    • 100% ownership – With the ability to create your own WFOE, you do not have to bring in outside investors or give away part of your business.
    • No restriction on money transfer – Relaxed administrative controls and the Renminbi convertibility encourage cross-border money transfers.
    • Low-risk entry – With minimal capital investment and loosened regulatory control, you can open your business in a low-risk environment.
    • VAT tax benefits – The Chinese good export VAT rate is 17%. However, the government offers a rebate to exporters in approximately one month when in the Shanghai Free Trade Zone.
    • Other tax benefits – In addition to the VAT tax rebate, there are other tax benefits to operating in the Shanghai Free Trade Zone, including that you only pay tax when entering in China while you operate in the bonded area
    • Fewer restrictions – While foreign investment requirements in various industries and other regulatory requirements often keep foreign investors out, the Shanghai Free Trade Zone has fewer requirements and restrictions regarding industries that foreigners can invest in.

Site Visitors!


TaxFillingIndia: Legal Information for Indian businesses

Since 2011, ​TaxFillingIndia has been a one-stop solution for any business or entrepreneur looking for a lawyer, chartered accountant or company secretary. We have been particularly instrumental in ensuring startups are fully compliant with India's labyrinthine legal system. Over the past five years, the depth of our offerings, connection with reliable professionals, affordable prices and customer satisfaction has made us the largest online facilitator of legal services in India. We have already served over 120,000 customers and have a steadily growing network of over 1000 professionals from all the major cities (particularly the metros of Mumbai, Bangalore, Chennai, Delhi and Kolkata) on our online platform. In 2016, we launched way of working for legal professionals across India.

Starting a Business

Many founders are confused about what kind of entity to register when they start their business. Should it be a private limited company, limited liability partnership, partnership firm, one person company or a sole proprietorship. Each of these has very specific advantages and disadvantages. There is no one type for all businesses. A private limited company registration, for example, would be a good fit for any venture that will look for funding at a later stage. You can contact TaxFillingIndia for all the advice you need. We assure you of great service at a reasonable price. You can find a company name availability here.

Intellectual Property

In modern business, there is no other asset as valuable as intellectual property, and yet so many startups end up neglecting it. But this is surely not advisable, as trademarks, copyrights and patents ensure that you have sole rights to your creation, be it your brand, your designs or your inventions. At TaxFillingIndia, we are well equipped to handle all your IP requirements. We facilitate trademark applications in just three days, copyright registration for all your software, pictures, audio and video content, and can connect you to patent attorneys to conduct a patent search and file your patent applications. You can find a Trademark availability here.

Government Registrations

In India, you need a license for everything in business. Started a manufacturing business? You need a GST Registration and a Trade License. For a food business, you need an FSSAI license. Have employees? You need a Professional Tax registration and Shops & Establishments Act Registration. If that's not enough, you also need to file GST Returns and Professional Tax Returns.

Legal Documentation

The worst way to approach business is to just get into new partnerships and arenas without examining consequences. By getting a lawyer to draft contracts or agreements with new vendors, employees and investors, you're ensuring that you have all the downsides covered. At TaxFillingIndia, we connect you to lawyers who will deliver complex documents, from shareholders' agreements and founders' agreements to terms of service/privacy policy and non-disclosure agreements, at a reasonable cost in a few days' time. Well-known startups, such as Holachef and Big Basket, have chosen to connect with a lawyer through us for their documentation work.

Mandatory Compliance

It's not enough to have started a private limited company or an LLP. You need to comply with all the requirements of the Ministry of Corporate Affairs and Income Tax Act once you do. You need to inform them of every relevant change you make, whether it is adding a director, removing a partner or increasing authorised share capital. You also need to file annual returns and maintain your accounts. In the case of a private limited company, you even need them audited. At TaxFillingIndia, we facilitate all these services completely online. Which means you can engage a professional on retainer for the year and we'll ensure that all the formalities are completed for you while you focus on your business.

By continuing past this page, you agree to our Terms of Service, Cookie Policy, Privacy Policy, Refund Policy and Content Policies.

Please note that we are a facilitating platform enabling access to reliable professionals. We are not a law firm and do not provide legal services ourselves. The information on this website is for the purpose of knowledge only and should not be relied upon as legal advice or opinion.