China Manufacturing Company Registration and Factory Setup

Steps to Set Up a Factory in China

Before You Start: 

Before we start to set up your factory in China, the very first step is to investigate into the industrial categories where foreign investments are accepted. The negative list is the category of the business in industries in which foreign investment is restricted or prohibited. According to the latest Negative List, a total of 29 categories implements limitations to foreign investors. You can get access to the full list through this link.

Step One: Market Research and Business Plan 

In most countries, it is useful to create a detailed business plan. When you’re starting a business in China, a thorough business plan is critical. To help foreign investors who may be not familiar with the Chinese market, Hongda provides a vast range of market research services to help businesses unlock new opportunities in the Chinese marketplace. By choosing Hongda’s market investigation and research services, you will get a comprehensive business proposal including valuable data into Projected revenue, Expected number of employees, and Budget Requirements. With actionable information from Hongda’s market research services, you can maximize your chances of success when expanding into China.

Step Two: Business Location Selection

Selecting the right location for a factory or other business venture in can be a daunting task. There are many factors to consider, and given the rapid changes in this region, the right decision could make or break the long-term success of the enterprise. Hongda can help you select an ideal factory location by taking the impacts of Land Cost, Labor Cost and Availability, Utilities and Infrastructure Maturity, Logistics Cost, Optimized Supply Chain, Convenience of Travel, Land Use Expiration, and Government Policy & Capability. Now you can prepare to set up your business entity with great confidence.

Step Three: Form Your Business Entity

The most common business entity for setting up a factory for foreign investors might be Wholly Foreign-Owned Enterprise (WFOE), or a manufacturing WFOE to be more precisely. A Manufacturing WFOE in China represents a fully foreign-owned entity established to engage in manufacturing activities within the Chinese territory. This type of WFOE is specifically designed for foreign investors aiming to produce goods in China, whether for domestic consumption or international export. By setting up a Manufacturing WFOE, foreign companies can benefit from full control over their production processes, quality standards, and supply chain management. To find out more about registering a WFOE in China, please visit our WFOE registration service page, or simply book a free meeting with us!

In industrial categories where 100% foreign invested companies are restricted, you can choose a form a Joint Venture (JV) with a Chinese business partner instead. Please click this link to for more information about JV registration.

Step Four: Open Corporate Bank Account

Once your company is registered, you will need to open a corporate bank account for daily transactions. The process and materials needed to open a corporate bank account may vary depending on the requirements of different banks. Our China bank account opening service page introduces everything you need to know about opening a corporate bank account.

Step Five: Environment Protect License and Special License Application

Now you are almost there! But before you can legally start production, there are still some regulatory compliances to be met. One of the most important issues is to pass the Environmental Impact Assessment (EIA). This is to verify that your factory meets the requirements regarding resource use, pollutant emission monitoring, and environmental management. 

With more than 10 years of rich experience, Hongda is highly skilled at helping our customers maintain environmental regulation and compliance. We have built strong relationships with governmental regulatory bodies to ensure that our clients comply with all legal requirements, and we stay up to date on changes to environmental regulations so that they can be implemented as quickly as possible.

For factories engaging in stringently managed products, special production licenses are required in addition to business license. For example, food production enterprises will need to obtain Food Production License in advance.

In addition, if your company will import production materials or export your products, an Import & Export License will also be compulsory.

Step Six: Staff Hiring and Human Resource Management

Efficiently running a factory requires experiences management personnel and highly skilled workers. To help your recruit ideal staffs and employees, Hongda has launched EOR, PRO, and Headhunting services (read more here (https://www.hongdaservice.com/human-resources)). In addition, you can also choose Hongda’s payroll service (link to payroll service page) and working visa and residence permit (link to working visa service page) to help you manage your employees!

Step Seven: Trademark Registration and Intellectual Property Protection

A trademark is a distinctive sign that identifies a commodity, service, or related specific individual or enterprise. It can be in the form of graphics or text, or it can be represented by sound, smell or three-dimensional images. Trademark registration brings exclusive right to the owner against others from using the trademark and gives the right to permit others to use the trademark for remuneration. You can easily protect yourself with the help of Hongda’s IP experts!

Why You Choose Hongda

• Local Expertise with Extensive Resources: With over 17 years of experience and dedicated teams in five major Chinese cities, Hongda has a deep understanding of the local market, ensuring that we can effectively address any challenges face during the setup process.
• Comprehensive and one-stop Solutions: We provide a full range of services, from company registration and tax compliance to financial management. This allows businesses to streamline their entry into China, saving time and effort with a seamless one-stop solution.
• Get more supporting from local government: Hongda has a deep understanding of the positioning and local characteristics of each city in China. We are familiar in supply chain dynamics, transportation infrastructure, and how to secure additional support from local governments. This enables us to help investor choose the most optimal location and maximize their potential benefits.
  
  

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