According to the Foreign Investment Law (effective date January 1, 2020), Foreign Investment Law Implementation Regulations (effective date January 1, 2020), China Company Law (latest revised version October 26, 2018)
1. Foreign individual, foreign enterprises, and other foreign organizations (hereinafter referred to as foreign investor) may be establish a wholly-owned enterprise , or a joint venture with Chinese investor in China.
2. Chinese government has formulated a Foreign Investment Negative List (hereinafter referred to as Negative List). Except this Negative List, foreign investor has been granted Chinese national treatment. The Negative List has Prohibited List and Restricted List, prohibited list is not allowed for foreign investors to invest, regarding to the restricted list, foreign investor(s) shall meet the conditions stipulated by government.
3. Foreign individual is not allowed to establish Individual Households or sole proprietorship enterprises in China.
4. The main legal forms of foreign-invested enterprises are:
4.1 One foreign investor establish a one-member limited liability company;
4.2 Two or more foreign investors establish a limited liability company;
4.3 Foreign investor(s) and Chinese investor(s) establish a joint venture limited liability company;
4.4 Two or more foreign investors establish a partnership enterprise;
4.5 Foreign investor(s) and Chinese investor(s) establish a partnership enterprise;
4.6 Foreign investor(s) and Chinese investor(s) establish a joint stock limited company;
4.7 Two or more foreign investors establish a joint stock company;
4.8 Foreign investor can purchase equity of limited company, or shares of joint stock company.
5. Company Registered Capital
Except Chinese Securities Law, Chinese bank law and several other laws, there is no minimum Register Capital requested Chinese Company Law, and the investor may decide when to inject the capital based on the Article of Incorporation.
6. What Documents and information shall be prepared to invest in China?
6.1 Foreign investors’ qualification certificates (such as business license, or certificate of incorporation, or passports, etc.) should be notarized and authenticated. Based on the current practices, there are 3 steps:
a. The foreign investors’ qualification certificate (such as business license or company registration certificate, etc.) should be notarized by the country where the foreign business is located;
b. The diplomatic department of the country where the foreign investor is located shall authenticate the notarized documents;
c. The Chinese embassy or consulate in the country where the foreign investor is located shall authenticate the above authenticated the notarized documents.
Exception: If the foreign investor is an individual, and has entered into China with a valid passport, then such valid passport can directly be used for company registration application, does not need to go through point 6.1 to get notarized and authenticated.
7. The "Chinese Company Law" stipulates each company shall have one legal representative. The legal representative shall be appointed or elected by shareholder(s). The legal representative shall be the company's managing director (or board chairman), or general manager. The Chinese company law does not require the legal representative shall reside inside China. The legal representative may simultaneously serve as managing director (or board chairman) and general manager.
8. The limited liability company shall have a Board of Directors who are elected or dismissed by shareholders, the number of directors shall be 3 to 13 directors. In case a limited liability company with a small number of shareholders or a small scale business may only have one managing director.
9. The company may or may not have a general manager, who shall be appointed or dismissed by the Board of Directors or Managing Director.
10. The company shall have a board of supervisors with no less than three supervisors. In case a limited liability company with a small number of shareholders or a small scale business may have one or two supervisor(s). The managing director (or board chairman), general manager, financial officer and other senior managers shall not concurrently serve as supervisors.
11. The company shall have a person in charge of finance, called financial officer. Chinese Company Law does not forbid managing director (or board chairman) or general manager of a limited company concurrently serve as financial officer. Therefore, managing director (or board chairman), general manager of a limited company may serve as financial officer.
12. The company registration address, it is required to have a company address for a company registration. We have partners of several local government invested organizations to offer such company registration address.
1. Company name application
2. Standard article of association
3. Business license
4. Company stamp, invoice stamp, legal representative stamp, financial stamp
5. Assist in opening bank account (bank fee is not included, the cost is around USD200)
6. Assist in tax bureau registration and initializing Fapiao purchase from tax bureau
*** There is a FREE company registration address provided by a Shanghai local government investment services agency, the registration address is located in urban district of Shanghai, the tax bureau is very close to subway line 1 and has quite good taxes services).
1. From January 1, 2023 to December 31, 2023, the Small Tax Payer's acutal VAT rate is 1%. If quarterly sales is no more than CNY 300,000, the VAT will be exempted.（note: when its annual sales is more than CNY5 million, it will be transfered to General Tax Payer）
2. From January 1, 2023 to December 31, 2024, the acutal CIT is 5% for small size enterprises with no more than CNY 3 million profit.
(small size enterprises with no more than CNY 3 million profit shall meet 3 conditions: 1- annual profit no more than CNY 3 million; 2- employees no more than 300; 3- total assets no more than CNY 50 milliion)