China’s size and development potential are the two main reasons why foreign investors prefer to register a company in China.
The country has several strategies for small and medium-sized companies and firms focusing on protecting the environment and efficient use of energy. Special attention is also paid to rural areas which can benefit greatly from foreign direct investment.
Being an equivalent of an LLC, a WFOE is a popular type for registering a company in China. Its capital is provided exclusively by a foreign entrepreneur and it is allowed to use a foreign currency, machinery, equipment and proprietary technologies. All profits that this type of company earns in China can be exported abroad.
Typically, foreign investors are limited or banned from investing in some industries in China. However, other industries, such as new technologies and equipment, new product development, or energy conservation, stimulate and support WFOE.
Other types of commercial organizations in China include:
- joint ventures
Established between Chinese and foreign investors, they provide their owners with a right to distribute income, expenses, and control over them. Foreign investors usually use JV to participate in education, entertainment and mining industries.
- equity joint ventures
Foreign investors use this method of business organization for entering the Chinese market and cooperation with the Chinese government.
- cooperative joint ventures
By choosing this type, Interested parties can act as separate legal entities and bear obligations independently. This type of enterprise provides parties with an opportunity to establish it as an LLC.
Advantages of registering a company in China:
- the second largest economy in the world; GDP of 17,6 trillion; a population of 1,4 billion;
- access to Asian markets due, including India and Pakistan;
- access to modern Chinese technologies.
WE RECOMMEND ORDERING ASSISTANCE IN COMPANY REGISTRATION IN CHINA BECAUSE:
- the average wage in China is still lower compared to the developed Western economies;
- availability of significantly cheaper equipment and raw materials;
- easy access to electricity and water supplies.
Opening a commercial organization in China requires submitting the following documents:
- notarized copies of IDs (two sets);
- office lease documents (originals);
- bank letter (credit standing certificate - original);
- Chinese name of the company to be registered;
- resume and a business plan;
- total amount of investment;
- address of residence of director(s) and photocopies of IDs (e.g. passports for foreigners);
- address of residence, one photo and an ID (a copy and an original) of a legal representative
Considering registering a company in China? Need advice on company registration in China? Why not contact YB Case experts?