Company Formation Shanghai
Company Formation, also known as company registration or company set up.
Company registration is a legal behavior must be taken tally with legal authority, conditions and procedures in order to set up a company with independent legal personality.
According to different nationality of investors, the Company could be divided into Domestic Company, Foreign Company and China-Foreign Joint Venture enterprise.
According to the different shareholder liability, the Company could be divided into Company and Partnership Enterprise. And Partnership Enterprise has two types, one is Domestic Partnership Enterprise, the other one is Foreign Partnership Enterprise.
Foreign company is often referred to as WOFE, it means Wholly Owned Foreign Enterprise. WOFE has different types based on different business scope or operation purpose. Normally WOFE includeTrade WOFE,Consulting WOFE, Technology WOFE, Food and Beverage WOFE, as well Manufactory or Factory.
No matter what company type you’d like to register in China, you must submit legal application docs to get approval by the examining and approving authorities in accordance to the Foreign Investment Enterprises Law of the People's Republic of China and its detailed Implementation Rules, Company Law and other related laws and regulations.
The newly-amended China Company Law was formally launched on March 1st, 2014, which amended 12 articles in total. China government keeps the door further opening to all people of the world, more and more investors come to China with full confidence supercharged the entrepreneurial boom.
Currently the main characters of China company formation is
1. Lower entry threshold for business investment;
2. Faster registration process;
3. Strict supervision after established.
1. Must register your company legally ;
2. Must manage your company legally ;
3. Must maintain your company legally .
Main solution for risk avoidance:
1) Be proactive in terms of knowing China related laws and policy, first understand some basic common sense;
2) Hire formal agent for company registration, which with legal background is in priority
Regarding WOFE registration in China, we highlight some changes in law, which is helpful for you to making right Decision.
1. Minimum registered capital
The newly-amended China company law has removed the minimum capital requirements for registering a new company, it’s no pressure to setup a company in China now.
As before the Minimum registered capital is RMB 30,000. After new company law released, Zero capital company doesn’t appeared as expected, oppositely, more and more company prefer to increase their registered capital in order to support company business development, the main reason is the capital contribution term was changed as well.
2. Contribution term of Registered Capital
According to newly amended China company law, there is no more limitations on the proportion and duration of the paid-in capital, and it’s already no longer a pressure for company registration now. Instead, the amount and duration of the registered capital will depends on the founder of the company.
Based on our actual experience, it's allowed to be contributed within 10~30 years from your company business license releasing date.
If your registered capital is RMB 300,000, it’s possible to be approved to contribute capital within 10 years, and it’s flexible for shareholders to decide when and how much to be contribute during the approved period.
If your registered capital is RMB 1,000,000, it’s possible to be approved to contribute capital within 30 years, and it’s flexible for shareholders to decide when and how much to be contribute during the approved period.
3. Cancellation of capital verification report
As China has strict foreign exchange control, all paid-in capital must make capital verification report which will take additional time and cost as before, now everything was changed more faster and easier.
If you contributed capital to China, you can get your money back in RMB in one week after operated some simple process at your bank directly.
4. Fast service with great value
Registration requirement becomes lower and the registration process is more effective; most of government administration fee was cancelled as well.
5. Company Annual Inspection was changed as Annual Reporting.
China government focus on public supervision mechanism on company operation, all adverse records will be reported at government annual reporting system and be shared with the public.
It’s really the right time to start your business in China now.