China Company Registration Guide

Registering a company is a necessary step to starting a business, but the policies vary widely from country to country, and there are many requirements that must be complied with when it comes to real implementation. China encourages “mass entrepreneurship” and company registration is becoming more and more convenient. There are generally two ways to register a company, you can either register online or at the Industrial and Commercial Bureau by yourself, otherwise, you can entrust a representative company to a professional to handle it for you.

In China, the most common types of companies are limited liability companies, joint-stock companies, limited partnerships, and sole proprietorships. Sole proprietorships include wholly foreign-owned enterprises and wholly individual-owned enterprises. To register a company, a person must be a person of full capacity, meaning a mentally healthy person over 18 years of age, who is capable of performing civil legal acts independently.

The following is a guide to incorporating a company in China. You may also consider our China company incorporation services.

Preliminary Work for Incorporating Company in China

1. Choose your company name wisely

Before you start preparing your company for incorporation, you must first decide on a name for your company. The company name must reflect the distinctive features and uniqueness of the product or service. A creative company name can help build a brand image and create relevant associations in the minds of consumers or customers, which in turn convinces them to purchase or lead to further cooperation. Most importantly, don’t forget to check ahead of time to make sure the name hasn’t already been registered. This will keep you from having to wait to register later.

2. Decide on the type of company

According to the Company Law of the People’s Republic of China, the main types of companies include limited liability companies, joint-stock companies, sole proprietorships, foreign-owned enterprises, partnerships, etc. There are also cases where the legal types of companies are determined by ownership, such as state-owned enterprises, collectively owned enterprises, private enterprises, joint ventures, foreign-invested enterprises, etc. You must understand the various types of companies, their advantages and disadvantages, and how they operate and then choose the business model that best suits your needs.

3. Develop a specific budget report

Finance is one of the most important aspects of a business and can help you look at your business in quantitative ways and make decisions more effectively. Running a new business requires having sufficient cash liquidity to support the basic operations of the company until it generates sales or capital injection from investors. Therefore, the company’s financial budget plays a key role and is a way to make assumptions about future revenues that are close to reality.

4. Decide on an office address

You have to decide on a business address, which can be a business center, an office building, a guest house, a centralized office area, or a residential address. It is noteworthy that a virtual address can be used to register a company in China. But from what we’ve seen over the years, the requirements for registered addresses in China vary from city to city and should be based on what the local industrial and commercial bureau says.

Advantages & Disadvantages of Company Types in China

The common types of companies in China include limited liability companies, joint stock companies, limited partnerships, and wholly foreign/individual-owned enterprises.

Company Type	Limited Liability Company	Joint Stock Company	Limited Partnership	Wholly Foreign Owned Company
Suitable group	Suitable for the early stages of business development. It can separate the company from the individual on a legal level, which prevents the entrepreneur from taking unnecessary financial risks.	Suitable for mature, large-scale companies, the establishment procedures will be more complex and stricter.	Consists of a general partner and a limited partner, of which the general partner has unlimited liability, and the limited partner is only liable up to the amount of their investment. Often used for equity incentives, law firms, and investment companies.	The process is more complicated and strictly regulated than that for domestic companies. The name is the same as that of a limited liability company.
Advantage	Low operating costs; a small organization; and a straightforward structure There is no need to disclose the company’s financial status to the public.	It can be listed on the stock exchange. A limited liability company needs to be changed to a joint stock company before it can be listed. When ownership and management of a business are kept separate, the business can run better.	The distribution mechanism is flexible, and the profit and earnings distribution of a limited partnership is entirely at the discretion of the partners and is not constrained by the percentage of capital contribution.	The parent company’s global strategy is carried out independently, without regard for China investors.
Disadvantages	The transfer of capital is not as free as the transfer of shares and requires amendment of the articles of incorporation. For shareholders, this is not conducive to achieving liquidity of the investment and the investment risk is relatively high.	Decision-making and management rights are determined by the number of shares held by investors, and such a system of power distribution tends to lead to disregard of minority shareholders’ rights by major shareholders.	The limited partnership is not a corporate legal entity. The integrity of the partners cannot be guaranteed and the responsibility is difficult to trace.	It is difficult to grasp the local humanities and traditions, which are not conducive to the establishment of a set of operating organizations and management systems in line with the local circumstances.

Learn more about the types of companies in China (Link) to choose the most appropriate company category.

The Process of Registering a Company in China

Name verification by the State Administration of Industrial and Commercial (SAIC) – Applicants can submit their applications in person or by proxy through direct visits to the business registration office, or by mail, fax, or email. To register for name pre-approval, the following steps are generally required:
Step 1: Get the Application Form for Name Pre-approval and fill it out. Get the other materials ready.
Step 2: Submit the name registration materials, receive the “Notice of Acceptance of Name Registration”, and wait for the name approval result.
Step 3: Receive the “Notice of Pre-approval of Business Name” on the date determined by the “Notice of Acceptance of Name Registration”.The first step of registering a company is to verify the name, but in fact, name verification is quite an arduous matter. If you intend to go to the SAIC on your own, you can check online first to ensure your business name does not conflict with any existing business names and save your time.
Rent an office- you must have an address in order to register a company. Beijing only allows office buildings, stores, and other commercial properties, while Shenzhen and Guangzhou regions allow residential homes as company addresses. During company registration, you need to provide a copy of the ownership certificate and lease agreement for the registered address.
Prepare the articles of association – The articles of association are the basic documents of the company’s name, the scope of business, managerial structure, and other major matters according to the law, as well as the written documents that stipulate the basic rules of the company’s organization and activities.
Apply for company registration procedures – Get all the forms required for company registration from the State Administration for Industry and Commerce (SAIC), including the registration application form, list of shareholders (promoters), supervision of directors and managers, registration form of a legal representative, registration form of an appointed representative or proxy.
After completing the forms, submit them to the SAIC together with the “Notice of Pre-approval of Business Name”, articles of association, lease agreement, and a copy of the ownership certificate of the business address. The license can be obtained in about 15 working days. You can give the submission to an agent or do it yourself on the SAIC’s website.
Obtain company stamp – Obtaining the stamp is a necessary part of the company after its establishment, and it is necessary to engrave the stamp regardless of the area in which it is registered. All China companies are now required to have company stamps, including the official stamp (also known as the administrative stamp), financial stamp, and legal representative stamp.
Tax registration – A foreign company must apply for a tax account and tax verification in the local tax bureau within 30 days of obtaining a business license.
Open a bank account – Once you have a business license, you’ll then be able to open a China business bank account for your company. There are no sequential requirements for tax registration and bank account opening.

China Company Registration Guide