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Today, small and medium-sized companies have become an integral part of the economies of most developed countries. They quickly respond to all changes in the business environment and are the first to suffer from excessive bureaucracy. In addition, they significantly contribute to social and regional evolution and are an example of innovation and well-being.
China’s economy constantly attracts the attention of the world public. A fast-growing consumer market, growing middle class, promising demographics, financial reforms and demand for services are attracting businesses from around the world.
Small business in China is the scientific engine of the country, due to the fact that small businesses offer the largest number of innovative products and technical inventions. Small technological firms are developing rapidly. Most of them were created within the framework of technology parks and business incubators, in which the state invested significant funds. These firms continue to receive government support in one form or another. Beginner entrepreneurs have the opportunity to acquire the needed info with the help of electronic libraries, as well as participate in video conferences, which are organized by leading Chinese and global specialists in the field of small biz development.
Chinese law allows foreigners to register firms under several forms of ownership, each of which has certain advantages. Let’s consider the most popular and affordable:
The most affordable way of doing business in China is to register a representative office of a foreign company. The representational office has the right to conduct the following types of activities related to the work of a foreign enterprise:
At the same time, the representative offices of foreign companies do not have the right to conduct activities of online business in China. Exceptions to this rule are provided only for representative offices of foreign airlines.
Large global organizations can organize their activities in the PRC through branches. Under this form, the enterprise complies with both the provisions of the parent company and the legal terms in China. The business activity remains the same, as does the company name, and it can act as an addition to an existing firm, regardless of the country of origin.
Currently, the legislation of the PRC allows the creation of branches of foreign companies to conduct certain types of activities (for example, branches of foreign banks and insurance companies).
The peculiarity of societies is that this organizational form does not belong to legal entities. At the same time, for the most part, the company can engage in almost all types of business activities. Chinese law provides for two forms of companies: general companies and limited companies. The main difference between these forms is the responsibility of the participants:
In practice, the partnership form is rarely used, as it implies unlimited liability of all or part of the participants for the partnership’s commitments.
Creating a commercial legal entity with 100% foreign investment is the most attractive and common solution, as it gives you the opportunity to have full control over your businesses in China.
Commercial legal entities include limited liability companies and joint-stock companies with limited liability. Both types of enterprises are legal entities, have separate property and legal entity rights to property. The company is responsible for its commitments with all its property. In turn, the liability of the company’s participants (sharers) is limited to the size of their fees to the authorized capital.
A LLC is a commercial legal entity, the authorized capital of which is divided into shares that are not in public circulation.
When creating a limited liability company, it is necessary to comply with a number of demands of Chinese legislation, in particular, a certain number of participants (no more than 50 participants), the presence of a total amount of capital investments, the presence of a charter, requirements for a name, the creation of a certain structure, and the presence of a company location.
A joint-stock company with limited liability is a commercial legal entity, the authorized capital of which is divided into shares that are in free circulation.
In practice, a joint-stock company with limited liability is rarely used due to the complex procedure of creating a legal entity, as well as the residency requirements of the founders (at least half of the participants must be residents of the PRC).
Determine its specifics, while taking into account the policy of local authorities regarding foreign investors. TOP in-demand areas where you can implement a profitable project:
You can run a small business in China by trading in various goods, which is one of the most popular and sought-after areas today. Supplying Chinese products is a good and cost-effective idea, given the excellent quality of goods manufactured in the Celestial Empire and their low prices.
There are no statutory minimum registered share capital requirements for companies, except for those operating in certain regulated sectors such as financial leasing and telecommunications, where minimum capital requirements apply.
In order to properly enroll a firm, it is necessary to collect a certain list of documents:
A shelf company is an option if you want to start a biz in China quickly. The process of buying a company is that you acquire all the registered capital of the firm and a new director replaces the original one. Buying a shelf company in China offers several advantages over starting a new business in China, the most significant of which is the short time it takes to get your business up and running.
Entrepreneurs are allowed to buy a company with turnover in China as long as they comply with the transfer of ownership rules. Documents that you will receive after purchasing a ready-made business in China with an open account:
In addition, buying a shelf company in the IT services industry in China, acquiring a shelf Chinese telecommunications company is considered the best choice for those who are interested in a modern technology-oriented biz.
Also, the logistics industry is developing in China. Therefore, the purchase of a ready-made logistics business-company is considered one of the priority decisions.