Starting a business as a foreigner in China requires plenty of information to ensure you take the right steps and avoid unnecessary hassles. For first-timers, the process may seem to be a bit complicated, especially if you do not have a proper grasp of the Chinese language. Knowing the steps can help you register your business and start operations immediately.
Starting a business as a foreigner: 10 crucial steps to follow
1. For pre-registration (SAIC-approved), you need to submit your Chinese name.
2. Register with MOFCOM (Ministry of Commerce) to obtain approval. On approval of documents, a record certificate can be obtained for foreign investment. Then, apply for an SAIC-issued business license.
3. Select business scope: It helps to determine the type of activities that you can indulge in and avoid when starting a business as a foreigner in China. It should have a detailed scope since it will decide your tax profile. Foreigners are encouraged to set up industries and are prohibited in a few.
Sort documents and obtain approval from the Chinese government: A few essential documents are:
1. Your company’s Chinese name. It is important to pre-register it first.
2. The legal address of the new company, appropriate to set the business scope and not shared office with any other company.
3. Article of Association explaining intentions pertaining to company profit repatriation.
4. Company organizational chart.
5. Registered capital amount.
6. Feasibility study (necessary for manufacturing companies)
7. PSB (Public Security Bureau) registration to obtain company chops, vital for starting a business as foreigners to carry out operations in China.
8. SAFE (State Admin. of Foreign Exchange) Registration to open Foreign Capital currency account (EUR, USD, etc.) in any Chinese local bank or foreign bank.
9. Open foreign capital account and company bank account to inject working capital: The legal representative will have to visit the bank for his//her identity verification.
10. Tax Bureau registration & establishment of tax machine: Basic financial and operation related information of the company to be registered like CFO and accountant verification, invoice application with Tax Bureau approval and tax category registration.
11. Hire a cashier Accountant.
12. For Chinese staff, draft the Staff Handbook: It will help you to safeguard yourselves from all possible controversies emerging in the near future. The process is likely to take around 3-6 months, depending on your document accuracy and industry.
Hence, starting a business as foreigners is somewhat complex in China. Hence, you need to seek the help of registered experts who are not only experienced and helpful but also are reliable to protect your interests.
