Register a company in china

Answer 1

1. OVERVIEW OF SHANGHAI

Shanghai is the industrial, commercial and financial centre of China, an outward-looking city famous for its fashion as well as for its finance. Located in Yangtze River Delta, shanghai also has the largest port in mainland China. Shanghai has an area of 6,340 square km and a population of more than 20 million. Its highly developed finance, trade, travel, real estate catch up with the world standard day by day. The complete legal system and the international standard market rule build a nice investment environment for Shanghai. As the famous journal Economists stated, Shanghai is an ideal city to live in and work in for foreign investors.

2. THE CONCEPT OF WFOE

WFOE stands for wholly foreign owned enterprise, which is a Limited liability company wholly owned by the foreign investor(s). WFOE means the foreign investors (including Hong Kong, Macau, Taiwan) established the enterprise within Chinese territory, in accordance with ??PRC Wholly Foreign Owned Enterprise Law??, with capital provided solely by the foreign investor. The foreign investors refer to the foreign enterprise, individual or partner. (Including Hong Kong, Macau and Taiwan).

In Shanghai, WFOE were originally conceived for encouraged manufacturing activities that were either export orientated or introduced advanced technology. However, with China's entry into the WTO, these conditions were gradually abolished and the WFOE is increasingly being used for service providers such as a variety of consulting and management services, software development and trading as well.

3. COMPANY NAME

In China, only Chinese company names are officially used, while English company names for reference only. Not every name will be accepted by the Company Registry. For some sectors such as education, logistics, medicine and food industries, pre-approval special license is needed. It is important for you to know the wording of a company name should be in conformity with the registered capital and business activities, such as with the words "international" or "investment" or "industrial" within a company name, the registered capital should be more than RMB 10 millions; while "group'' or "holding" more than RMB 30 and 50 millions accordingly (The detailed information depends on the local stipulation.). In addition, your company name must be distinguished from the others registered name before. If the word ??China?? within the company name, must do pre-approval by CICB at national level in Beijing.

4. SHAREHOLDER, DIRECTOR, MONITOR AND LEGAL REPRESENTATIIVE

A shareholder could be foreign company or individual.

A director could be acted by foreign person or Chinese person.

A monitor should be appointed to supervise the company??s operation and management. A monitor could be acted by foreign person or Chinese person.

Legal Representative is a person in charge of corporate operation and management and development, responsible for all the legal affairs arising from the business running.

5. BUSINESS SCOPE

One of the most important issues covered in the project documentation is the business scope of the WFOE. Business scope is narrowly defined for all businesses in Shanghai and the WFOE can only conduct business within its approved business scope on the business license. Amending the business scope requires further application and approval if it is not available. General business scope usually includes, investment consulting, international economic consulting, trade information consulting, marketing and promotion consulting, corporate management consulting, science and technology , manufacturing, etc.

6. REGISTERED AND PAID-UP CAPITALS

In China, the registered capital is related to the business sector. For the manufacturing enterprise, the registered capital is usually required USD 140,000 or above (USD 200,000 is much better). For the trading enterprises, the registered capital is usually required as much as USD 140,000 or above. For the service sectors, such as consultancy, technology, market research and development, the registered capital is usually required USD 140,000 or above. All of the registered capital can be paid in one time (within 6 months after the date of the issuance of the Company's business license) and can also be paid for many times in two years (In the first 3 months, 20% of the registered capital is mandatory). The terms of payment is determined by the volume of registered capital. The fee of paid-up capital confirmation will be reduced if the registered capital can be paid in one time.

7. PREFERENTIAL POLICIES FOR WFOE in SHANGHAI

Most of the preferential policies have been abolished since January 1, 2008, but for some sectors preferential policies still remain there, such as hi-tech or environmental protection sectors.

8.GORVERNMENT PROCESSING PROCEDURE

Step 1: Check the company name with local CICB (Company Registry);

Step 2: Achieving an approval from the Fire and Environment Bureau for manufacturing sector;

Step 3: Pre-approval for some special sectors;

Step 4: Go to Bureau of Trade and Industry for certificate of approval;

Step 5: Apply for the business license from CICB;

Step 6: Apply for chops from the Public Security Bureau;

Step 7: Apply for the Organization Code License from Bureau of Quality and Technical Supervision;

Step 8: Apply for the registration licenses from National & Local Administration of Taxation;

Step 9: Apply for the permits for the bank account opening from bank authorities;

Step10: Apply for Foreign exchange registration license from National Administration of Foreign Exchange

Step11: Open the basic account in the bank;

Step12: Apply for the IMPORT&EXPORT registration license from local Customs (if needed);

Step13: Apply for Financial Registration For Enterprises With Foreign Investment from Financial Department

9. DOCUMENTS REQUIRED FOR THE TRADING ENTERPRISES

Step 1: Minutes or resolution from investors board of directors;

Step 2: One proposed name (in Chinese), and provide two alternative names in case the first name is not available;

Step 3: Detailed information about the business scope and registered capital;

Step 4: Feasibility study report;

Step 5: Four original articles of association signed by members of the Board and with company chop;

Step 6: Copy of the business license, certificate of incorporation of parent company;

Step 7: The original and copy of identity certification of legal representative, and two color photos;

Step 8: Two original bank reference letters (from investor's bank) indicating foreign investors' creditability, issued within 6 months in both English and Chinese translation;

Step 9: Lawyer's legalization or notarization and endorsed by local China Embassy or Consulate;

Step 10: The lease of commercial office between leaser and lessee needed to be endorsed by the Housing Management Authority. The lease should be signed personally by shareholders, directors and legal representative.

10. DOCUMENTS REQUIRED FOR THE MANUFACTURING ENTERPRISES

Step 1 - Step 9 the same as above

Step 10: Production address: your own house property or the rented commercial workshop (two original copies of lease with signature and endorsed by Housing Management Authority. The signing party of lessee should be qualified for and on behalf of WFOE, such as its legal representative, shareholder, director or monitor. The area is required no less than 200 m2 and for manufacturing use only.

Step 11: Project reports are necessary for the approval by the relevant government department, such as, business service, environmental and fire departments. The manufacturing area should reach the required standard set out by the Fire Department and Environmental Protection Department.

11. DOCUMENTS REQUIRED FOR THE FOREIGN INDIVIDUALS?? ENTERPRISES

Step 1: Chinese company's Legal representative, directors, monitors and manager's holding original document &the copy of identity certification;

Step 2: Lawyer's legalization or notarization;

(Notarized by the local notarization department and approved by the Chinese embassy or consulate In local country);

Step 3: Two color photos of the legal representative;

Step 4: Feasibility study report;

Step 5: Two original bank reference letters (from investor's bank) indicating foreign investors' creditability, issued within 6 months in both English and Chinese language.