Company Formation in China: FAQ

China Import and export Company Setup Service
Hotline: 86-755-82148419, Email: susiehu@citilinkia.com, Wechat: 13823131503

China is a huge market, the Chinese market is expanding many important business person's choice. Before making the right decision, the local industry and commerce, taxation, law, management and operation of a wide range of understanding and research is particularly important.While the country has introduced a number of reforms that have made the process to do business in China relatively easy, the country’s jurisdiction and legal structure are still very enclosed. And especially for foreigners, there are a lot of legal hurdles that must be jumped over before being able to function in the jurisdiction smoothly.

You may have the following inquiries on the company formation in China.

Q1: What are the company types available to foreigners?

A: There are a number of structures you can apply for. However, the main types are Wholly Foreign-Owned Enterprise (WFOE), Joint Venture (JV), and Representative Office (RO).

Q2: What are the main requirements when picking a company name of a foreign-owned enterprise?

A: The following requirements must be kept in mind when choosing a company name:

The name of the company cannot be the same as that of other registered companies in the same industry or companies operating in unspecified industries.
It cannot be the same as the original name of another company that changed its name to another one in the past year.
It cannot be the same as the name of an enterprise whose registration has been canceled or whose business license has been revoked in the past 3 years.
If the words “China”, “Province Name” and “International” are to be used in the name, the applicants need to get approval by relevant departments first.
Chinese pinyin and Arabic numerals are not allowed to be included in the name.

Q3: What methods can be used by foreign investors to inject capital into their foreign-owned company?

A: Investors are allowed to use cash to contribute capital to the company. Other methods to inject capital include use of property, factory building, machine equipment or other material, industrial property rights, and even special technology.

Q4: Do foreign-owned companies need to apply for import and export rights exclusively?

A: Not necessarily. You only need to apply for an import/export license if you wish to directly carry out import and export in China.

Q5: What is the general process of establishing a foreign-owned company?

A: The application for the establishment of a foreign-owned enterprise is made in the following order:

Submission of application for company name approval by the local foreign trade department.
Application of a business license sent to the Industrial and Commercial Bureau.
Issuance of the official company seal by the Public Security Bureau.
Publishing of the organization’s articles of association certificate.
Bank account opening.
Tax certificate registration of both national tax and local tax.
Registration of Financial Certificate.
Registration of Foreign Exchange Certificate
Registration with the Customs.

Q6: Who can be the legal representative of a foreign-owned company?

A: Usually, the Chairman of the Board of directors can act as a legal representative of the company. You can also appoint other Chinese citizens for the role, however, there are no strict rules that must be adhered to when picking a legal representative.

Q7: What are the conditions for the deregistration of foreign-funded companies?

A: The conditions are as follows:

The enterprise is dissolved due to a merger, division or if the enterprise is declared bankrupt or ordered to close down according to law.
A resolution is made by the board of directors.
A liquidator is hired.
The company has published at least three announcements for liquidation in the newspaper.
The liquidator has prepared a liquidation report which is approved by the board of directors, shareholders, and relevant competent authorities.

ATAHK’s Services

ATAHK is a China based International Business Consulting Firm, helping foreign investors establishing their business presences in China. ATAHK provides the full spectrum of international business consulting services for clients interested in starting their business in China and assist companies interested in China market to establishing and structuring their entities in China. ATAHK provides business registration, accounting and tax, auditing, marketing services and China VISA support to foreign enterprises aiming to succeed in the Chinese marketplace.

Contact us
For further queries, please do not hesitate to contact ATAHK at anytime, anywhere by simply calling China hotline at 86-755-82148419, or emailing to susiehu@citilinkia.com.