As we approach 2024, our exploration of the intricacies of China Company Registration is fueled by the numerous FAQs that have shaped our journey throughout 2023. Whether you’re navigating corporate compliance, exploring legal procedures, or seeking insights into the Shanghai Silk Road initiative, JR & Firm is poised to guide you. In this comprehensive FAQ guide, we address key aspects of business formation, providing clarity on regulations, tax implications, and the expertise of Jasur Mavlyanov, with over 15 years of corporate consultancy. Join us on this journey through the most frequently asked questions that have shaped China’s business environment in 2023 as we transition into the new year.

1. Can foreigners register a company in China?

Yes, they can. Despite China being the world’s second-largest economy with a multitude of foreign businesses, misconceptions persist about foreigners owning businesses in China. Some individuals assert that only notable figures like Elon Musk can own businesses in China, a notion that lacks foundation. Contrary to such beliefs, China, while governed by a communist party, actively promotes private businesses, extending incentives not only to locals but also to foreigners. Since 2015, China has streamlined bureaucratic processes, established free and special economic zones, and reduced restrictions for foreign investors. By the end of 2023, it has become notably easier for foreigners to initiate and manage 100 percent-owned businesses (WFOEs) in China.

2. Can I start a company in China remotely without visiting?

The feasibility of remote company registration in China hinges on specific client situations. Two scenarios merit consideration:

Scenario One: If your intention is to establish a company in China, hire local and foreign staff, and remain solely as a shareholder without relocating or assuming a position in the company, you can indeed initiate the process entirely remotely. A personal visit to China is not required during or after the company registration. However, given the mandatory roles of a company director and supervisor, both positions necessitate distinct individuals who must physically visit a Chinese bank to open the company’s bank account. As a shareholder, you can handle the documentation remotely, utilizing courier services for sending and receiving.

Scenario Two: If you aspire to register a company in China and assume the role of a company director or supervisor while remaining a shareholder, at least one visit to China is imperative. This visit specifically pertains to the bank, as both the company director and supervisor must personally visit to open the corporate bank account for the company in China.

3. Can students register a company in China?

Yes, they can;

However, it is not advisable, particularly if they intend to apply for a work visa through the same company in the future. Operating a company while on a student visa can be considered illegal work by the immigration office in China, as students are not permitted to work or generate income during this visa status. If the plan is to apply for a work visa immediately after obtaining the company license (without operating the company for an extended period), then registering a company is encouraged. It’s essential to note that foreign students cannot assume company positions or list themselves as company executives in China while on a student visa. Such roles can only be undertaken after completing their studies, just before transitioning to a work visa. For further information, feel free to contact JR & Firm for assistance with intricate matters like this: www.jradnfirm.com/appointments

4. Can I give power of attorney to you or my friend in China to open a bank account for the company?

Generally speaking, no. Major banks in China do not accept Power of Attorney as a substitute for a personal visit during the company bank account opening process. They specifically require the presence of the company director and supervisor. Additionally, apostilled copies of passports from company shareholders are necessary, especially if they differ from the company director and supervisor. If corporate shareholders are involved, apostilled copies of company documents from the parent company will be required. While some smaller banks in China might consider accepting an original passport and a power of attorney if the director cannot personally visit, a representative can manage the visit to the bank with the original passport sent to China via courier along with the power of attorney.

5. How long does it take to register a company in China as a foreigner?

The registration process typically spans 2 to 4 weeks if conducted continuously. This involves timely receipt of apostilled documents (if shareholders are outside of China), color copies of passports (if shareholders, director, and supervisor are in China), timely application submission, timely signing and return of structural documents by the director, shareholders, and supervisor, and finally, the availability of the director and supervisor for a personal visit to the bank. While government bureaucracy is beyond anyone’s control, making a 100 percent accurate time guarantee for company registration in China is not possible. Nevertheless, JR & Firm strives for a 90-95 percent guarantee, doing our utmost to expedite the process for clients.

6. What is the required minimum capital / paid-up capital to register a company in China?

The minimum capital requirement varies based on the type of company you wish to register. For ordinary companies like Trading, Consulting, Cafe/Restaurant/Bakery, IT, Sports consulting/GYM, Culture promotion, etc., there is no mandatory paid-up capital in China. These companies can be registered without injecting any capital into the bank. However, certain company types necessitate founders to inject the required capital. For instance, tourism companies are mandated to inject a minimum of 300,000 RMB in the bank account and employ at least 5 tour agents before obtaining a license to operate. In cases where no paid-up capital is required, having a registered capital suffices. Registered capital represents the intended amount, stated in the company registration application and on the business license. This “intention” signifies that shareholders plan to inject this capital during the validity of the company’s business license, typically 30 years or more in China. Even if founders decide to dissolve the company before the expiration of 30 years, there is no obligation to inject the registered capital. The size of the registered capital is based on the recommendations / policies of the local government. For example it’s a minimum 100,000 USD for trading and consulting companies in Shanghai.

7. Can I get a work visa if I register a company in China?

Eligibility for a work visa in China depends on your qualifications and the position you hold in the company. Registering a company does not automatically entitle you to a work visa; the applicant must meet specific criteria.

There are three types of work permits in China: Category A, Category B, and Category C, each with slightly different requirements:

1) Category A Work Permit Requirements:

– Minimum 60,000 RMB/month salary commitment, generating 10,000 RMB/month personal income tax
– Minimum 2 years related work experience
– Medical check from China
– Physical office rental agreement in the same city as the company’s registration
– Apartment rental agreement in the same city as the company’s location
– Application

2) Category B Work Permit Requirements:

– Minimum Bachelor’s Degree from a recognized university
– Minimum 2 years related work experience
– Non-Criminal Background check from the country of citizenship
– Medical check from China
– Physical office rental agreement in the same city as the company’s registration
– Apartment rental agreement in the same city as the company’s location
– Application

3) Category C Work Permit Requirements (only for foreign students studied in China and about to graduate):

– Minimum Bachelor’s degree from a university in the same city as the sponsoring company
– Excellent academic performance with grades at least B and more than 80% in all exams
– Recommendation letter from the university
– Medical check from China
– Physical office rental agreement in the same city as the company’s registration
– Apartment rental agreement in the same city as the company’s location
– Application

It’s crucial to note that being a Chinese company shareholder alone does not guarantee a work visa; one needs a specific position relevant to qualifications and must independently qualify for a work and residence permit.

8. How much does it cost to renew the company license in China?

If you are inquiring about the general business license of the company, it does not require annual renewal in China; it is granted for 30 years. However, depending on products and business activities, additional permits and licenses with varying validity periods, ranging from 1 to 10 years, may be necessary. Costs associated with renewing these special permits and licenses vary due to factors such as agency fees (if facilitated through an agency), government fees, and administrative fees like legalization and translation. Generally, costs range from 1000 yuan to several thousand yuan, and precise figures depend on specific details, which vary from case to case.

9. We are not in China at the moment; how can we start the process for company registration?

If you’ve chosen our services for company registration in China, the first step is signing a service agreement. Once completed, we will issue an invoice for your payment. Upon receiving the full payment, we initiate the process as follows:
Company Name Registration: We register the company name based on your preferences, adhering to the specified structure in China (refer to the dedicated article in the “Resources” section on our website).

1) Structural Document Signing: We facilitate the signing of structural documents by the company shareholders, director, and supervisor. This process can be conducted remotely.
2) Submission to Company Registrar: We submit the signed documents, along with necessary materials (details provided in a dedicated article on our website), to the company registrar.
3) General Business License: We await the issuance of the company’s general business license, which typically takes around 10 business days.
4) Bank Account Opening: We schedule a bank appointment for opening a corporate bank account, requiring the physical presence of the company director and supervisor in China.
5) Tax Authority Registration: We register the company with the local tax authority and obtain a tax number.
Foreign Currency Permit: We apply for and secure a foreign currency permit for the company.
6) Customs Permit: The final step involves applying for and obtaining a customs permit.

10. Can you help us open a personal bank account in China?

Yes, we can assist with opening a personal bank account in China, but only if you register a company through us.

11. How much does it cost to register a company in China?

Determining the exact cost without specific details about your business, the type of company you wish to register, products, import/export activities, and potential special licenses is challenging. Generally, our engagement fees start from 15,000 RMB and above, approximately ($2,100 based on December 2023 exchange rates).

12. Can you also help with closing the company in China?

Generally, we can assist with the company closure process, provided there are no outstanding debts or unresolved issues with the local government in China. After evaluating the specific situation, our assistance prices vary, but typically start from 6,000 RMB (approximately $850, based on December 2023 rates) and upwards.

13. I want to use my existing company to open a new company in China, is this possible?

Yes, it is possible to utilize your existing foreign or Chinese company to register a new entity in China. If it’s a foreign company, we require the full set of apostilled company documents from your country sent to us by post. For a Chinese company, no apostille or legalization is necessary. Your existing company can act as a full owner or partial shareholder in the new entity in China. Note: LTD companies in China permit up to 50 shareholders, which can be a mix of individual and/or corporate shareholders.

14. I want to register a company in Hong Kong, can you help me?

Yes, we can assist with company formation and bank account opening in Hong Kong. Please refer to the dedicated page on our website for this service.

15. Which one is better, registering a company in Hong Kong or Mainland China?

This question often arises due to a common misconception. While Hong Kong is a Special Administrative Region of China, the assumption that Hong Kong companies enjoy the same rights as Mainland China companies when doing business in China is incorrect. Legally, China and Hong Kong are separate jurisdictions when it comes to company formation and business operations. Despite their relationship, Hong Kong companies are treated as foreign entities in Mainland China, and vice versa. Although there are special agreements and privileges between Mainland China and Hong Kong, they primarily relate to specific business aspects and not immigration, import/export rights, or monetary policies.

Due to these agreements, it may be advantageous to register a mother company in Hong Kong and a child company in Mainland China. In this scenario, the child company can often repatriate earnings to Hong Kong without tax implications.

For a more detailed discussion based on your specific situation, feel free to schedule a call at www.jrandfirm.com/appointments.

16. I’m on a family visa in China, can I register a company and do business?

Legally, no. A family visa does not permit individuals to work or generate income in China. However, if the intention is to register a company in China and immediately apply for a work and residence permit sponsored by the same company, then yes, and this approach is always encouraged.

17. I don’t need a company, but I need a work visa. Can you help me?

No, we cannot. We do not offer any visa services, and we strictly discourage and do not support illegal activities such as seeking a work visa without genuine employment. Work and residence permits in China are sponsored by the company you work for, and individuals can only obtain them through legitimate employment.

18. I don’t want to open a company, but I want to open a bank account in China. Can you help?

If you have an existing company elsewhere, please provide more information about that company and its business to our email: contact@jrandfirm.com. Based on these details, we will check with a few banks in China that offer special Non-Resident Corporate Accounts (NRAs) for foreign companies. If these banks are willing to accept your application, we can assist with the entire process.

19. I want to open an Aliexpress seller account, but I do not want to register a company in China. Can you help me?

The possibility depends on the location of your existing company. If it’s in one of the regions listed by Aliexpress, such as Italy or Turkey, we might be able to assist you in opening a seller account for that specific region. However, if your company is not in a region where Aliexpress operates, we cannot assist. To open a seller account on the Aliexpress global platform, which allows selling globally, you would need to register a trading company in China. If you are interested in that, feel free to get in touch for a quotation. Note that Hong Kong companies cannot be used to open a seller account on the Aliexpress global platform.

20. How many people can I hire in my Chinese company?

There is no specific limit to the number of employees a Chinese company can hire. However, when it comes to foreign employees, immigration considerations come into play. Immigration officers typically look for sufficient financial resources in the company for each foreign employee. If the company has minimal funds or close to zero balance, only the company director and supervisor are usually allowed to apply for work and residence permits. The validity period for their residence permit under such circumstances is typically not longer than 6 months. To bring in more foreign employees, the company may need to inject capital into its bank account, usually at a rate of 10,000 USD per foreign employee (excluding the director and supervisor). This capital injection demonstrates financial stability to the immigration office and is often a requirement for extending residence permits for additional foreign employees.

21. Can I bring my family with me when I get a work visa to China through my company?

Yes, you can include your immediate family members in the visa application and apply together. Please note that requirements for the visa may slightly differ on a case-by-case basis, depending on the country of citizenship.

22. I want to open a company in China, can we have a Zoom call?

Yes, we can arrange a Zoom call. However, please schedule an appointment through our website for this: www.jrandfirm.com/appointments. This ensures that we are compensated for the consultancy provided and verifies the seriousness of your intentions. Due to the volume of inquiries, it’s not feasible to meet with every individual in person. We want to allocate sufficient time for those with serious intentions to start a company, and scheduling an appointment helps with that. If you have general questions, we encourage you to explore our content on our YouTube channel (https://www.youtube.com/@jrandfirmllc)and the “Resources” section on our website, where we provide comprehensive information for free.

23. I’m coming to Shanghai, can I visit your office?

Absolutely! We welcome you to visit our office, but please make an appointment in advance to ensure that we are available. You can schedule an appointment here: www.jrandfirm.com/appointments or by contacting us via WeChat, Telegram, WhatsApp at +8613040688804.

24. Can I sell on e-commerce platforms in China if I register a company in China?

Yes, registering a company in China enables you to open seller accounts on various e-commerce platforms in the country, such as taobao.com, tmall.com, 1688.com (Chinese version of Alibaba), Aliexpress, and others. Without a registered company, it is impossible to open seller accounts on these platforms.

25. Do I need to hire local staff when I register a company in China?

Generally speaking, no. While some situations might necessitate hiring local staff, these are typically related to immigration and visa requirements. For instance, applicants lacking the required academic degree for work and residence permits may need to hire 1-2 local employees and cover their social security costs (around 2000 yuan a month) as a substitute for the required degree. Each case requires careful consideration and communication, and we recommend scheduling an appointment with us for personalized advice: www.jrandfirm.com/appointments.

26. Can I have a Chinese citizen as my company director or supervisor?

Yes, you can. There are no restrictions on having a Chinese citizen as your company director or supervisor.

27. What is WFOE?

WFOE stands for Wholly Foreign Owned Enterprise, which is a type of LTD (Limited Liability Company) that is 100 percent owned by foreigners (non-Chinese citizens).

28. Can I have Chinese partners in my WOFE (Wholly Foreign Owned Enterprise)?

While it’s possible to have Chinese partners, doing so would change the company’s status from WFOE to a partnership or Joint Venture, depending on the nature of the partners and shareholders. Instead of WFOE, it would be referred to as FICE (Foreign Invested Commercial Enterprise). Both WFOE and FICE are LTDs (Limited Liability companies) and can engage in businesses open for foreign investment and involvement.

29. Can I be a single shareholder in the company in China?

Yes, as a foreigner, you are usually permitted to be the sole shareholder in a company in China. However, note that WFOEs (Wholly Foreign Owned Enterprises) and FICEs (Foreign Invested Commercial Enterprises) can have up to 50 shareholders.

30. Can I invest in the stock market in China with my WFOE (Wholly Foreign Owned Enterprise)?

Yes, it is possible to invest in the stock market using your WFOE in China. For more detailed information on this, please schedule a call with us: www.jrandfirm.com/appointments.

JR & Firm LLC: Your Trusted Partner for Corporate Services in China

Navigating the business landscape in China can be challenging, but JR & Firm LLC is here to simplify the process for you. With over 15 years of experience in corporate consultancy, we specialize in a range of services tailored to meet your business needs. Whether you’re looking to form a company, draft contracts, structure your organization, or set up offshore accounts, we’ve got you covered.

Our Services in China Include:

  • Company Formation: From selecting the right business structure to handling all the legal formalities, we make the process of setting up a company in China seamless and hassle-free.
  • Contract Drafting: Our team of legal experts will draft contracts that are not only compliant with Chinese laws but also protect your interests.
  • Company Structuring: We help you design an efficient organizational structure that aligns with your business goals and complies with local regulations.
  • Offshore Accounts and Company Formation Globally: Looking to expand beyond China? We can assist you in setting up offshore accounts and forming companies worldwide.
  • Consultancy Services: Benefit from our in-depth market insights and strategic advice to make informed business decisions.

Contact Us:

For more information on how JR & Firm LLC can assist you in China, feel free to reach out to us at:

Trust JR & Firm LLC to be your reliable partner in China, offering comprehensive solutions for all your corporate needs.

JR & Firm LLC is also the proud owner of an international logistics company, JR International Logistics LLC. If you’re seeking a reliable logistics partner to transport your goods from any location worldwide to any desired destination, we invite you to explore our services. Please click here for more information.

1. What is the first step if I want to register a WFOE?

The first step towards registering a WFOE in China involves contacting a professional consultancy firm, such as JR & Firm, and signing a service agreement. In theory, the founders could handle the process themselves. However, since it requires an in-depth understanding of the company registration system and proficiency in Mandarin Chinese, it is generally more practical to hire a professional company to prevent potential mistakes during the process.

2. I have signed a service agreement with JR & Firm to register my WFOE, what's next?

After signing an agreement with our clients for WFOE registration in China, we issue a formal invoice. At this stage, we anticipate that our clients will make a payment for the service, allowing us to commence the process.

3. I have paid JR & Firm for the WFOE registration service, what should I do next?

Upon receiving full payment for the WFOE registration, we provide our clients with a detailed questionnaire. This document requests all the necessary information about the company, business activity, founders (shareholders), and executives (including the company director and supervisor). We request that our clients complete the questionnaire and return it to us via email.

4. What should I prepare for the WFOE registration questionnaire?

1. Company Name Choices: In China, WFOE names should follow this structure: [Place of Registration] + [Chosen Name] + [Business Direction] + Co., LTD. For example, Shanghai Silk Road International Trading Co., LTD, or for a consultancy company: Shanghai Silk Road Consulting Co., LTD. An alternative structure is: [Chosen Name] + [(Place of Registration)] + [Business Direction] + Co., LTD. For example: Silk Road (Shanghai) International Trading Co., LTD. Please note, in China, a company’s Chinese name is considered its main name. If our clients know Chinese, we ask for name choices in both Chinese and English, following the above structure. If not, English name choices will suffice, and we will select a corresponding Chinese name based on similar sounds. Avoid city, country, and historical names, as they’re typically disallowed. Also, we discourage direct translations of the English name due to high likelihood of them being taken. We recommend selecting similar-sounding Chinese characters to avoid delays. The Chinese name does not need to have a specific meaning, as meaningful characters are often taken.

2. Company’s Legal Person (Company Director): The legal person is an individual and cannot be a corporate entity. Please prepare their full name (as on the passport), a copy of their passport (not ID), along with their address, phone number, and email address.

3. Company’s Supervisor: The company supervisor is a separate individual from the company director, meaning they cannot be the same person. Please provide their full name (as on the passport), a copy of their passport (not ID), and their address, phone number, and email address.

4. Company’s Shareholder(s): Shareholders are the owners of the company and can be both individuals or corporate entities. Both the company director and supervisor can be shareholders. There can be up to 50 shareholders. Whether an individual or corporate shareholder, full information is required: full names, contact details, address, and either passport copies (for individual shareholders) or a full set of company documents (for corporate shareholders).

5. Company’s Business Activity: What products and/or services does the company plan to sell? Please prepare a detailed list.

6. Company’s Registered Capital: The registered capital is the amount the founders plan to invest in the company over a span of 30 years or more. The amount varies depending on the activity and place of registration. We recommend $300,000 for international trading companies and $100,000 for consultancy companies, as examples. The registered capital amount is usually suggested by the local government.

7. Full Contact Details for All Involved Executives and Shareholders: We need the complete contact details for all executives and shareholders. This includes addresses, emails, and phone numbers.

5. I submitted the WFOE registration questionnaire to JR & Firm via email, what's next?

Once we receive the completed WFOE registration questionnaire, we review it carefully and follow up with our clients accordingly. If there’s any missing information, or if the company requires additional permits or licenses based on its planned products or services, we will inform the client. If everything is in order, we prepare the application documents, attach our clients’ documentation, and submit the WFOE registration application. The estimated waiting period for feedback from the government on the registration application is approximately 10 business days. Please note that timeframes in China are approximate due to government bureaucracy.

6. How long does it take to get my WFOE license after the registration application is submitted?

Once the WFOE registration application is submitted, the government generally responds within 10 business days. If approved, they will issue the company’s structural documents, which the founders (shareholders) and executives (director and supervisor) are required to sign with a black gel pen and mail back to us (Note: In China, only black gel pens are acceptable for signing legal documents; other colors and ballpoint pens are not accepted). We then submit the signed documents to the company registrar and await the business license. The waiting period for the business license is roughly 10 business days unless expedited service was purchased. With expedited service, a business license can be obtained within 2-5 business days. Contact us for more details about the expedited service.

7. Great, I have obtained my WFOE business license, what is the next step?

Once we secure the WFOE business license, we will contact our clients and the bank to schedule an appointment to open a corporate bank account for the company. Please note, the company director must be present in China to open a corporate bank account and their citizenship should not be among the countries sanctioned in the bank’s system. Alongside being present, the director needs to provide a Chinese phone number linked to their passport and a second person’s passport and phone number linked to this second person’s passport. This second person can be anyone in China (provided their citizenship isn’t among the sanctioned countries) with a Chinese phone number. This requirement is due to the banks’ need to issue online banking devices that require two people’s information. Legally speaking, this second person doesn’t have any rights or obligations regarding the company’s finances or bank account. While this might seem unusual, it remains a requirement, so we advise clients to identify such an individual in China before opening a bank account. The bank account opening process takes around 5-6 hours, and we recommend our clients exercise patience during this process.

8. I have my WFOE bank account opened, what is the next step?

After your WFOE bank account is opened, we’ll proceed to contact the customs department to initiate the process for the e-port device (if you’re registering an international trading WFOE focused on import/export. Note that e-port isn’t required for consultancy or other types of companies). This process typically takes about 5 business days, and we’ll mail the e-port device to our clients once it’s secured.

9. I have obtained my e-port device, are there any other steps to be completed before I start my company’s operations?

Yes, following the acquisition of the e-port for the WFOE, we’ll register the company with the tax department. This process generally takes around 14 business days, and it requires the company director to visit the tax office in person for ID verification.

10. After the WFOE tax registration, are there any other steps involved before the company becomes active?

Indeed, the final step in the WFOE registration is the foreign currency permission application. This process typically takes around 7 business days and necessitates a visit to the relevant government department. After securing the foreign currency permission, the WFOE can commence its operations.

On the whole, the complete process for WFOE registration can span anywhere between 4 and 8 weeks. As we mentioned earlier, all timeframes are approximations due to the inherent unpredictability of government bureaucracy. Although these factors are beyond our control, we will do our absolute best to expedite the process.

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Jasur Mavlyanov, an experienced entrepreneur and legal expert, has built a notable career in international business, with a focus on China. With over 13 years of experience living and working in China, Mavlyanov has acquired valuable insights into the Chinese legal system and business environment.

As an entrepreneur, Jasur founded JR & Firm LLC, a company dedicated to providing legal services to global clients entering the Chinese market. His leadership has helped the firm become a reliable partner for businesses navigating the complexities of Chinese regulations and laws. READ MORE about Jasur.

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