Along with the rapid development of China's economy, China has become one of the largest economy country in the world, its proportion of manufacturing and export and import in the global scope is more and more higher, many international investors take chance to find the right business opportunities in China. Establishing a China company or Representative office becomes the foreign investor's important choice, which is also the right business development mode.
►The main questions to foreign investors ：
1. The legal issues for China company formation
As a foreign investor, it’s easy to encounter many legal issues on your China company formation. Esp. China company law, It is much different to the laws in western countries, Arab countries etc. All the foreign companies will take the format of APPROVAL first and then Registration in China. So the most important thing is to find an agent with good China law background and be very familiar with related laws and regulations on China company formation.
2. What’s the best investment method?
Two main investment methods are considered by more and more foreign investors, one is to set up a China company directly, the other is to acquire an existing company in China. The first one is applicable to the investors who are not very familiar with China laws and China market, or the industry could be developed again. The later one is suitable to the investors who has knowledge of China laws and markets even live or work in China for a period. They could own the existing company through merger and acquisition, and further develop the business quickly by using the existing channel model and its resources.
3. How to choose the best company type?
In accordance with China laws and regulations, the professional agent could help investors choose the best company type through evaluating its background, industry situation, business scope. Beside this, the agent company could help investor generalize better and wider business scope which is helpful for your future business.
4. How to choose the office or premises?
The requirement on office or premises is different upon company types. E.g. Food and Beverage Company, the requirement for the shop’s location, area, design and decoration, neighboring environment are higher than other company types. The professional agent could provide valued proposal after /before investors signed the rental contract, which could avoid any unnecessary loss to investors.
6. New ! What's the mininum investment capital ?
China has removed the mininum capital requirements for registering a new company , among other reforms aimed at lowering the threshold for business startups and stimulating the private economy. According to China new company law released in Mar 2014, there is no more limitations on the proportion and duration of the paid-in capital ,and it will be no longer a problem for company registration now. Instead, the amount and duration of the registered capital will depends on the founder of the company. And base on our actual experience, it's allowed to be contributed within 30 years from your company business license releasing date.
5. Apply for Residence permit for foreign employees.
All the foreigner who want to work in China legally, must get employment permit and residence permit/work visa firstly in accordance with China laws, otherwise it cause penalty or seriously be facing expelled or in prison.
6. Accounting service
How to get reasonable tax mitigation during the legal operation has become the first question for foreign investors. LIC could put forward the constructive opinions base on different company situation through our professional accounting and tax services.
►Business models in China
1. WOFE formation, New ! Shanghai Free-trade Zone
2. Representative Office formation (R.O)
3. Foreign –foreign Joint Venture Enterprise (J.V Enterprise)
4. China-Foreign Joint Venture Enterprise formation
5. Partnership enterprise formation
6. Acquire the existing China company
►Foreign Company types and industry
1. Commercial trading company( Trade WOFE)
2. Consulting company (Consulting WOFE)
3. Science and Technology company (Tec. WOFE)
4. Manufacturing
5. Food and Beverage company / Catering company (F&B WOFE)
►Essential factor for foreign company formation
1. Company name
2. Investor information
3. Investment capital
4. Organization Chart
5. Business scope
6. Register address
7. Special licenses
►Foreign investor’s work visa/ residence permit / Z visa issues
According to relevant China law and regulations, the foreign investors, as investor or legal representative, will enjoy the special treatment on work visa application, which without requirement on age, work experience and education background. The company’s investor, legal representative, general manager or vice general manager is adaptable to apply 2~5 years work visa depends on the company’s investment capital and company size. Meanwhile, as a foreign company, it has right to apply work visas for its eligible foreign employees, and also could apply official business visa invitation letter for its overseas customers, which is helpful for the customer to get China business visa/ F visa.
►Foreign company’s tax declaration and annual audit issues
In accordance with China fiscalit regulations, all the company must make bookkeeping and tax declaration after tax registration certificate released, same requirement to all China companies including foreign company and local domestic company.
