Company registration in Jinan in 2024

26.02.2024

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Price

2700 USD

Registration period in days: 10

Jinan's business prospects

The question of Jinan's attractiveness to foreign investors and businessmen is what are the main factors that make this city a favourable location for business activities in China. Based on 2024 data, Jinan provides a favourable environment for foreign capital and entrepreneurs looking to strengthen their market position in China. By putting resources into business in Jinan, investors gain access to the highly developed industrial base and broad consumer market of Shandong Province, and can also take advantage of specific benefits such as local resource base and government support.

Jinan, the capital of Shandong Province, is of key importance in the economic structure of eastern China due to its focus on innovative research and development in the fields of high-tech, green energy and biomedicine. This fact makes the city attractive to technology companies. Additionally, Jinan offers comprehensive support programmes for overseas investment that include tax incentives, simplified business registration procedures and access to specialised industrial zones.

The process of starting a business in Jinan is also facilitated by the availability of highly qualified specialists. For example, the Russian language department at Shandong University makes it much easier to find Russian-speaking specialists and translators, which is especially valuable for Russian and Russian-speaking entrepreneurs. This helps to overcome cultural and language barriers, simplifying adaptation and integration into a new market.

Moreover, Jinan has a well-developed logistics infrastructure, including road and railway networks, as well as proximity to seaports, which facilitates efficient trade both domestically and internationally. These aspects, combined with the support of local authorities, create a favourable environment for foreign companies seeking to expand their presence in China through Jinan.

In summary, Jinan is an outstanding location for overseas investors due to its unique combination of industrial opportunities, innovation potential, availability of skilled labour and supportive business environment.

Legal aspects of company registration

Analysing the Legal Environment for Foreign Company Registration in Shandong Province and Jinan

The company registration process in Jinan is subject to the legal and regulatory framework of the People's Republic of China, which provides the legal framework for foreign investors to operate within Shandong Province and in Jinan in particular. These legal documents cover not only registration procedures, but also aspects related to operations, taxation, labour relations, and the protection of the rights of overseas investors.

The Company Law of the People's Republic of China serves as the fundamental document defining the basic provisions for the establishment and management of companies in China, including registered capital, management and liquidation procedures. This law is key to all categories of enterprises, including those with foreign investment.

The Law on Foreign Economic Investment of the People's Republic of China, which governs the instauration of mutual ventures, alien economic undertakings and completely foreign-held firms, plays a momentous function for alien investors. This ordinance delineates the statutes for alien enterprises in the PRC, encompassing requisites for their enrollment, governance and economic pursuits.

Specific attention in the context of Shandong Province and Jinan is given to the regulations "On the Administration of Free Trade Zones" concerning the specifics of registering and doing business in free economic zones. These regulations offer additional preferences and simplified conditions for foreign enterprises, which increases Jinan's attractiveness to global investors.

Also significant are the "Regulations on the Protection of the Rights and Interests of Foreign Investors", which protect the investment and income of foreign companies and ensure equal treatment of local enterprises.

To successfully register a company in Jinan, it is critical to be thoroughly familiar with the aforementioned laws and regulations, as well as to take into account the requirements and procedures established by the Shandong Provincial Government and Jinan municipalities. Doing business in this region requires in-depth knowledge of the legal environment and active engagement with regulatory agencies.

Options of organisational and legal forms for overseas investors in Jinan

Various legal forms are available for foreign investors considering registering a business in Jinan, the choice of which depends on their strategic objectives and business plans.

Wholly Foreign-Owned Enterprise (WFOE)

This genus enables foreign stakeholders to possess 100% proprietorship of the enterprise without necessitating Chinese co-investors. This configuration is the supremely pliant choice for extraneous stakeholders, furnishing them comprehensive authority over business machinations and administration. A WFOE is exemplary for enduring business endeavors in Cathay and can function in an assortment of realms, ranging from fabrication to amenities and commerce.

Joint Venture (JV - Joint Venture).

This form involves the creation of a partnership between foreign and Chinese investors. JVs are often chosen to operate in sectors where local knowledge is important or where there are restrictions on wholly foreign-owned companies. A JV provides an opportunity to share risks and benefits between partners.

Representative Office (Rep Office)

Representative office is a cost-effective and relatively easy way for foreign companies to start operating in the Chinese market. However, it is limited to performing market research, gathering information and establishing business relationships in Jinan, not including the possibility of direct commercial activity or profit making.

Branch office of a foreign company

Registering a branch office of a foreign company in China may be a more complicated procedure and is less commonly used, but it is suitable for companies wishing to carry out certain activities under their own brand. Branches can engage in business activities and generate revenue, and their activities must be consistent with the parent company's lines of business.

Company registration process in Jinan

Selection of a name and preparation of documentation

Starting a business in Jinan begins with careful preparation and gathering the necessary documents, which is a key step for successful company registration. This process involves several important steps, from choosing a company name to collecting the personal documents of the founders and management.

Choosing a company name and checking its uniqueness is the first and one of the most important steps when starting a business in Jinan. The name should not only be memorable and reflect the essence of the business, but also comply with local regulations and laws. It is important to make sure that the chosen name is not used by another company in the same industry and region. This requires checking with the relevant registration authorities in Jinan or Shandong Province. This process may involve applying for pre-approval of the name at the local bureau of industry and commerce or through their online platforms.

Documentation

Gathering the documents of the founders and management is an important step when registering a company in Jinan.

For foreign nationals, a passport with a current visa or residence permit is required.
For Chinese citizens, a national identity card is required.
Utility bills or rental agreement confirming the residential address for the last few months.
Detailed CVs of founders and managers, including their work experience, education and qualifications.
A detailed business plan including a description of the business, market analysis, financial projections and development strategy.
Lease agreement or certificate of ownership for commercial premises to be used as the company's legal address.

These documents are required to confirm the identity of the founders and managers, as well as to demonstrate financial and legal readiness to start a business in Jinan. Depending on the specifics of the business and the requirements of local authorities, the list of required documents may be extended.

Starting a business in Jinan requires careful attention to detail and strict adherence to the procedures established by local law. Successful preparation and submission of all required documents greatly simplifies the registration process and avoids delays or refusals. It is also important to keep in mind that Jinan and the entire Shandong Province have specific documentation requirements and registration procedures that may differ from other regions of China. It is therefore advisable to familiarise yourself with these requirements in advance or seek the assistance of legal advisors specialising in foreign company registration.

Selection of the economic sphere of activity and relevant codes

In the process of registering a company in Jinan, a critical aspect is to identify the scope of economic activity and select the appropriate classification codes within the "Classification of Economic Activities in China" (GB/T 4754-2017). This classifier is a mandatory standard for identifying the business activities of companies in China, covering an extensive list of sectors ranging from manufacturing to services, each with its own unique identification code.

For example, for a foreign investor seeking to establish a company in the manufacturing sector, a choice of codes is available to match the specifics of the production, such as code "2610" for "Manufacture of electronic equipment" or code "1810" for "Manufacture of clothing". Companies operating in the IT field can use the code "6200" related to "Information Technology and Services".

Careful selection of the classification code is important not only for compliance with legal requirements, but also for determining tax treatment, qualification for state support and eligibility to participate in public tenders. For example, enterprises in the high-tech sector may be eligible for favourable taxes and state grants.

It should be taken into account that certain activities require specific licences or permits. Taking the example of opening a catering establishment, it is necessary not only to specify the appropriate activity code, such as "5610" for "Catering Services", but also to ensure that permits from the health and fire authorities are in place.

Consideration of local rules and regulations also plays an essential role in the business registration process in Jinan. The city, like other regions in China, offers special economic and technological zones with additional privileges for overseas investors, including a simplified registration process and tax incentives.

Selecting the business line of business and the relevant classification codes when registering an enterprise in Jinan is a fundamental task that requires detailed research and strategic planning.

Registration capital

Establishing a business in Jinan, like other places in China, requires attention to the provisions for registered capital, whose necessity is determined depending on the type and scope of the company. More recently, Chinese law has introduced reforms directed at simplifying business registration procedures, including the introduction of the concept of subscribed capital.

Wholly Foreign Owned Entity (WFOE)

In Jinan, there are no strict criteria regarding the registered capital for WFOEs, but there are certain guidelines. For example, the initial capital for manufacturing WFOEs may start from 500,000 RMB, while for trading or consulting WFOEs, the amount may be lower at around 100,000 RMB. These values may vary according to the requirements of local authorities and the characteristics of the particular business.

Joint Venture (JV)

The minimum authorised capital for joint ventures also varies by industry and may match the criteria for WFOEs. It is important to note that in a JV, the authorised capital is divided among the participants according to their shareholding.

Concept of subscribed capital

One of the advantages of subscription capital is that it reduces the initial financial burden on founders, provides an opportunity to direct the initial investment at the development of the company instead of freezing it in the form of share capital, and simplifies the registration process. This is particularly advantageous for foreign investors who may face limited financial resources in the initial stage of entering the Chinese market.

Minimum contribution upon incorporation: Under a subscription capital system, foreign investors may initially contribute only a portion of the authorised capital, e.g. 20 per cent of the total amount, upon incorporation.
Timing of additional contributions: the remainder of the authorised capital must be contributed within two years of incorporation for most companies, while this period can be extended to five years for certain activities, giving enterprises flexibility in financial management and the ability to use the funds for business development.

With this in mind, implementing a subscription capital system in Jinan offers entrepreneurs significant benefits by facilitating resource management in the start-up phase and lowering the barriers to launching a new venture.

Registration of legal address

Registering a business in Jinan involves special attention to determining a legal address, which is crucial to the success of the registration process. The registered office is necessary for official correspondence, the receipt of legal documents and can influence tax obligations and qualification for local government benefits and subsidies.

In the context of establishing a business in Jinan, the legal address chosen should be within the city or relevant administrative district where business activities are planned. This address will become the official location of the company for all official registration procedures and tax returns.

There are several options available to provide a company with a legal address in Jinan. Renting an office is one of the most used methods, providing not only an address for registration, but also space to conduct business. With this method, it is crucial that the landlord provides all the necessary supporting documents for the right to use the space as a legal address.

An alternative is the virtual office service, which is especially convenient for start-ups and small businesses, for whom having a physical office is not a primary need. A virtual office offers a legal address for official registration and can include additional services such as mail and phone call handling, easing the initial stages of business development and reducing costs.

When choosing a method of obtaining a legal address, it is necessary to ensure that it complies with local legislation and is suitable for company registration, which may require the collection of additional certificates or permits from government agencies.

Thus, the procedure of selecting a legal address for a company in Jinan is a key stage of registration and requires thorough preparation. Adequate selection of an address ensures compliance with legal regulations and can contribute to the successful development of the business in the future.

Registration with the tax inspectorate and obtaining stamps

Starting a company in Jinan includes the important step of registering with the tax office and obtaining seals, which is mandatory for all companies operating in China. This process begins as soon as the company is successfully registered and has obtained its business licence.

Registration with the tax office involves the submission of a set of documents, including a copy of the business licence, documents proving the company's registered office and IDs of the founders. Once these documents are submitted, the tax inspectorate conducts an audit based on which the company is assigned a tax number. This number is required for all kinds of tax operations, including payment of taxes and filing of tax returns. The time it takes to register with the tax inspectorate can vary, but the process usually takes from a few days to a few weeks.

Obtaining company seals is also a mandatory step after opening a company in Jinan. In China, the company seal is used as an official signature in document management and is legally binding. Companies need to order several types of seals, including the main company seal, the seal for contracts and the seal for the finance department. Seals are ordered through accredited organisations and each seal must be registered with the local police. The cost of making and registering seals can vary, but averages several hundred yuan for each seal. The lead time for production usually does not exceed one to two weeks.

Thus, the process of registering with the tax office and obtaining seals is a key step that requires careful attention and adherence to all established procedures. Successful completion of these procedures allows a company to start operating in full compliance with Chinese law and conduct business in Jinan without legal impediments.

Opening a Shandong Province corporate bank account

Commencing a corporate depository account is a pivotal stride for enterprises functioning in Shandong Province, encompassing Jinan. This procedure furnishes a business with entry to the requisite pecuniary amenities to execute day-to-day fiscal transactions, remit levies, effectuate inbound and outbound disbursements, and administer other fiscal commitments.

The first step in the process of establishing a corporate account is to prepare and collect all required documents, which typically include:

Constituent documents of the company, such as the certificate of incorporation and articles of association.
Official documents confirming the appointment of management personnel, such as minutes of meetings and resolutions appointing directors.
Identity documents of the founders and authorised signatories.
Proof of the legal address of the business.
Specialised licences or permits for certain activities, if required by law.

The choice of a bank to open a corporate account depends on a number of criteria, including the characteristics of the business, preferences in terms of banking services, the cost of service and the availability of bank branches. Both leading public and private banks, as well as international financial institutions, are available in Shandong Province.

Once a suitable bank has been identified and all the necessary documents have been prepared, an application for opening an account follows. At this stage, the bank will verify the documentation provided and assess compliance with regulatory standards. Additional information or documents may be required.

Upon completion of the verification and approval of the application by the bank, the corporate account will be opened and the company will have access to all the banking services provided, including the issuance of account details, cheque book and, if available, access to the internet banking system.

The time frame for opening an account and the cost of services can vary considerably depending on the bank chosen and the documents required. Some banks charge a fee for opening an account, while others may offer to open an account without charging a fee if certain conditions are met, such as a minimum account balance.

Supporting and encouraging foreign investment in Jinan

Establishing a company in Jinan provides foreign investors with privileges in the form of tax incentives and preferences that can significantly reduce initial financial outlays and promote long-term business prosperity. These incentives are designed to attract outside investment in key areas of economic and innovative development.

Main tax rates

The following basic tax rates are set for businesses in China:

Income tax for companies is usually 25%, but lower rates may apply for those operating in certain areas or in special economic zones.
Value Added Tax (VAT) rates vary from 6% to 13% depending on the type of goods or services, with preferential rates or full exemption for certain categories.

Tax exemptions and preferences

Foreign companies incorporated in Jinan can access the following tax incentives:

Reducing the corporate income tax rate to 15 per cent for high-tech enterprises, especially those located in places such as the Jinan Hi-Tech Zone.
Full VAT exemption for certain types of exported services, improving conditions for export activities.
Property tax and land tax relief for enterprises investing in specific infrastructure projects or developments, including temporary exemptions or reductions in tax rates.

In order to benefit from tax incentives and preferences, a company must meet certain conditions, such as operating in priority sectors of the economy, investing in research and development, or being located in specialised economic zones. It is mandatory to comply with all procedures and requirements to document eligibility for benefits.

To maximise the benefits of tax preferences when registering a business in Jinan, entrepreneurs should carefully study the local tax laws and take advantage of expert advice to help optimise their tax burden and explore all available opportunities for preferential treatment.

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Typical mistakes when registering a company and how to avoid them

Establishing a company in Jinan, as in any other location, can face certain obstacles and potential pitfalls that can complicate or slow down the incorporation process. However, being aware of the most common difficulties and methods of avoiding them can make it much easier for entrepreneurs to launch their business.

One common problem when registering a company in Jinan is a lack of understanding of local laws and regulations. The laws in China can be very different from the legal systems of other countries, especially in aspects relating to business and taxes. To minimise the risk of such a mistake, it is vital to study local laws and regulations in depth or seek the assistance of experienced legal advisors specialising in Chinese commercial law.

Choosing the wrong form of legal entity for a business is also a common mistake. There are several forms of ownership available in China, each with different tax rates, authorised capital requirements and governance features. The wrong choice can result in unnecessary costs or restrictions on operations. To prevent this, it is crucial to carefully evaluate all possible options and make the choice that best suits the specifics and objectives of the business.

Disregarding to select a domicil can be a momentous hindrance to enrollment. In China, a domicil plays a pivotal function not merely for epistolary communication, but also impacts fiscal duties and eligibility for governmental sustenance schemes. Improper choice of a lawful domicile, encompassing the utilization of a simulated office in an unsuitable locale, can result in unwelcome aftermaths. Electing an appropriate lawful domicile with due contemplation of all requisites is a cardinal facet of prosperous commercial enrollment in Jinan.

Also, inattention to detail in the preparation of documentation often causes delays. An incomplete set of documents or errors in their preparation can significantly increase the time required to obtain all permits and licences. It is important to thoroughly review each document before submitting and, if necessary, seek the assistance of accounting or legal professionals.

Overall, successfully establishing a company in Jinan requires careful attention and detailed planning at all stages of the incorporation process. Avoiding standard mistakes and engaging qualified professionals for advice and support can contribute to a smooth and expeditious business start-up.

Conclusion

Establishing a corporation in Jinan in 2024 is a methodology that may appear perplexing at first glance, but in reality presents businesspersons an extensive occasion for commerce expansion in one of the most rapidly burgeoning markets globally. The significance of meticulous strategizing and comprehensive groundwork throughout the integration procedure is indispensable, as it not only streamlines the triumphant fulfillment of all requisite measures but is also pivotal to the corporation's enduring advancement and affluence in the forthcoming days.

The key to success when doing business in Jinan also includes an understanding of the cultural and commercial characteristics of the region, which is essential for building productive relationships with local partners, clients and authorities. By utilising the services of local advisors and legal professionals, the incorporation process can be made much easier and common mistakes can be avoided.

We offer comprehensive support through the process of starting a business in Jinan, including initial consultation, identification of the appropriate legal structure, preparation and filing of all necessary documents, as well as assistance in registering with the tax authorities and obtaining all necessary licences and permits. Our team consists of experienced professionals with extensive knowledge of Shandong Province laws and business procedures, allowing us to provide a personalised approach to each client, taking into account all your business goals and preferences. For detailed information on the services we offer and to start your co-operation, please contact us via the contact details on our website.