China is now the number one world destination for foreign direct investment, according to recent UN figures. Here's some guidance to help you take advantage of this market and open your China company in 2022.
And within China itself, GDP growth is set to surge relative to other world locations (see figure 1 below):
But foreign businesses need to do their research before spending money — or signing the lease on office space. Starting a business in China is different than it is in, say, the United States. You’ll find that the government has more involvement in the business world, and there may be a little more paperwork.
Even though you may have to jump through a few more hoops, you’ll find that China is one of the most fast-paced and rewarding business environments in the world.
Starting a business in China in 2022 for foreigners (Step-by-step)
Read on to discover a summary of the steps to starting a business in China as a foreigner in 2022, from picking a location to hiring your first employees. Here's how we support you through the process:
1. Company Name & Address
Start by getting a registered address & preparing the documents to set up your company (a WFOE or Wholly Foreign-Owned Enterprise).
- WFOE Chinese name (the official name of the company, not the English name)
- Registered address OR
- Free trade zone address
- Submit the WFOE application
2. Business License
Your business license and corporate chops (stamps for documents) are issued after the WFOE application has been accepted and the company is active. You'll obtain:
- Business License
- Company Official Chop
- Financial Chop
- Legal Representative Chop
（It takes about 15 working days to receive these）
3. Corporate Accounts
Opening your corporate bank account & tax accounts with the local tax authorities.
- Corporate bank account
- Social insurance account
- Housing fund account
- Tax registration number
（This will take approximately 15 working days as long as everything is in order）
4. Trading Certificates
Issuance of additional licenses where applicable. This depends on your business scope:
- Import / export license
- Food & beverage license
- Alcohol license
- Medicine license
（These take around 15 working days to issue）
5. Ongoing Support
You will need to maintain your company and adhere to monthly tax & accounting reporting for compliance.
6. Additional Services
Your company may well need these additionalservices that we provide, too:
- Annual tax return
- Annual accounts audit
- Trademark registration
- ICP license, especially for e-commerce in China (read about the ICP license and its benefits)
- Setting up E-commerce in China
You may also like to read: Why Preparing Your China Tax And Accounting Audit Early Is A Good Move
You've now seen a summary of the different tasks and activities required when registering a company in China. Hongda Service has many years’ experience working in this area and our lawyers are experts in company incorporation in many of China's key business areas. We've seen it all before and understand the challenges. If you have any questions, please let us know!
P.S. Learn more about the WFOE setup process
The checklist below outlines the WFOE setup process to help you see what lies ahead! We look forward to hearing from you and working with you during your exciting China journey!
We have written a number of blog posts about setting up your own WFOE...go further into the topic by reading them: