Over the years, China has attracted many foreign investors. However, the process of starting a business in China can be daunting. One of the most common pieces of advice is to seek the help of professionals. This is good when you consider a series of hurdles on the path, like the language barrier.
Also, the Western world’s business climate is pretty much unique from what is available in China. The good news is that many accessories, firms, and agencies are ready to stand by you through the process.
We want to assume you already have essential things like location and, most significantly, your business plan set up. Here are critical steps to guide you in successfully opening a foreign business in China.
- Your business name must be submitted in Chinese for pre-registration. This is done by the SAIC – State Administration of Industry and Commerce.
- Proceed to the Ministry of Commerce for registration and approval.
Once the approval is completed, you will be issued the record certificate for foreign investment. As soon as you finalize this, you should apply for your business license.
Chose Your Scope of Business
This is like your business structure that determines what you are allowed to do and cannot do in the country. The scope needs to be pretty detailed as it determines the tax profile and every essential thing about the company.
If your scope records you as a manufacturing company, but you start as a eCommerce business, you will have severe issues with the law.
- Prepare your document to process Approval from the Chinese Government.
A few of the required documents are:
- The name of the company in Chinese which you need to preregister
- The company’s legal address. This needs to be in sync with your business scope. An office that is shared with another one is not allowed.
- The organizational chart of the business
- Article of association that details your mode of handling of the profit
- The capital amount for registration
- Feasibility study for manufacturing firms
The business type and location often determines the list.
Registration with Public Service Bureau (PSB)
This registration is vital for getting your company chops, which are essential to business operations. Chops correspond to signature in Western World. It is primal to the validation of contracts.
Registrations with State Administration of Foreign Exchange
This is one of the requirements for opening a Foreign Capital Account in foreign currencies. You can open this in a local Chinese bank or any foreign bank.
Open the Necessary Bank account.
This includes the primary bank account and the foreign capital account for your firm, which will also contain your capital. Your advisor in china should be able to help with information ion opening any of these.
It would help if you had a legal representative appear at the bank for identity verification.
Register at the Tax Center and Have Your Tax Set-Up
This involves registering essential financial information like tax category verification, CFO and accountant verification, invoice application, etc.
- Hire a cashier and an accountant
- Have an employee handbook that will guide your operations.
This will come in handy to defend yourself should any controversy appear in the future.
The entire registration process can span between three to six months. Most times, it is a factor of the nature of the industry and the accuracy of your document.
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