Creating a company in China is the first obstacle in the process of transacting business in China. If you set up a company using the wrong structures, it may cost you. Failing in China Company registration may cause a fatal blow. If your company doesn’t collapse, its ability to expand and become successful can be tremendously impeded. China laws permit a 100% foreign company ownership. Nonetheless, it heavily regulates and restricts foreign owned company activities. Such companies can only transact in the business operations listed on their company license. The amount of capital necessary by a foreigner to start any China Company registration can be determined by the location of the firm and its business operations. Getting a business license in China You have to fill up an application form to get your registration certification and HK trademark registration. Other required documents include: • Identification and appointment documents of your supervisors, officers and directors. • Identification and appointment documents of the legal representatives of your company. • Articles of association obtained from each shareholder. • The identification document if your officers and the identity card of your share holders. • Representation authorization documents. • An appraisal report or capital verification certificate • A lease or any other document that may work as a proof of your company’s office. If your initial contributions are as non monetary assets, then documents that certify transfer of the relevant property titles of these assets are necessary. Other documents might be necessary depending on the issuing authorities. Quality and Bureau Code Certificate You should apply for the organization of your company in a period of 30 days on getting your business certificate. Your application form should be completed and filed with the Shanghai company code management center. This is a branch of the quality and technology supervision Bureau. Other supporting documents include a copy of the identity card of the representative and the original and a copy of the business license. Wholly Foreign Owned Enterprises (WFOEs) or limited liability companies whose investors are completely foreign are gradually becoming the most popular technique of foreign investment in China. While foreign companies used to think that a local partner was required to operate business in China, this is no longer the case in a wide range of industries. Features of WFOE’s: • Liability is restricted to the amount of registered capital contributed. • Equity is divided based on contribution to registered capital and not allocation of shares. • Limits public offering of shares • Restricts the right to transfer shares • Between one to 50 shareholders WFOE’s are governed by the law of the PRC and you have to apply for China WFOE registration before you start working on it along with relevant implementing regulations.
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As an international metro city with ample opportunities and information, HK company formation provides matchless access to an estimated consumer market of 450 million people in Southern China only. With robust infrastructure and complete legal system of its own, it offers a beneficial commercial and financial environment to various entrepreneurs and traders. Hence, Hong Kong is a popular jurisdiction with international entrepreneurs looking forward to enter Chinese markets, and more and more people establish their own companies in Hong Kong with various purposes, which enhance not only the image of the company itself, but also the competitive ability in the international market. We know there are various reasons or factors that can be conducive to the success of a business. While Hong Kong is considered one of the best cities to establish and run a business, as it scores high on factors that matter to businesses. Here are some of the main advantages of setting up a business in Hong Kong and will serve you with the answers whether HK company formation is the best strategy. 1. Being an international centre of information exchange and transportation hub. A focal point of all the maritime activities in Southern China and is one of the major ports in the world in respect to tons of shipping using its amenities, cargo managed and the number of passengers carried. 2. With very low tax rate, tax exempt for income not incurred in Hong Kong. 3. Enjoy the comfort of international banking system. Various banks represent the interest of 32 foreign countries. The banking and financial services of Hong Kong is regulated by the Hong Kong Monetary Authority (HKMA). The advantages and features of using Hong Kong for private banking and offshore asset protection during China company formation are extensive. |