China is the second largest economy in the world, after the USA, but in terms of GDP (Gross Domestic Product), surprisingly, the country already surpassed the United States. With a prolific business environment, China sustains and encourages the foreign investments, whether direct or indirect, through varied and appreciated incentives and strategies that address to all individuals regardless of their nationality. If you are planning to set up a company in China it is suggested to be informed about the investment policies and the legislation related.
Setting up a WFOE in China
Investors from abroad have special benefits when opening a business in China, and the most important one is that they can entirely own the company without having to search for Chinese associates. Even more, a foreigner establishing a business in China through a WFOE (Wholly Foreign Owned Enterprise), which represents the same idea as for a limited liability company, can have full control and use not only the resources from the home country but also the related currency. As for the profits generated in China, these can be completely returned in the country of residence. The incorporation process of a WFOE in China is simple and regards the main steps as for any kind of business registration. The Articles of Association which comprise details about the owners, the purpose of the company, the business address and the share capital must be submitted with the Chinese Trade Register. Before that, as an important stage of incorporation, a name search and reservation should be considered, in both the English language and Chinese. The Local Industry and Commerce Administration Bureau oversees and grants the name of companies settled in China. The interesting part of a WFOE incorporation is that there is no need for a minimum share capital, as the authorities do not impose such requirement. Keep in mind that for starting the activities in China, one must apply for special licenses and permits granted for the chosen business field.
Other types of companies an entrepreneur can register in China
Besides the popular WFOE among foreign investors in China, there are also other types of entities which can be incorporated in a fast manner. For instance, you can direct your attention to joint venture, cooperative or equity joint venture which can activate in certain industries if the partnership is set between a national and a foreign investor. If you do not want to relocate in China, but you are interested in placing the services in the country, you can choose to open a representative office at the beginning, and then if it presents interest, the business can expand on a local plan.
The benefits of opening a company in China
The attractive business environment in China comes with appreciated benefits like a simple incorporation procedure, no minimum share capital, the possibility of controlling the activities as a foreign entrepreneur without other related parties, and a tax regime that involves only the income tax for revenues produced and registered in China. Still speaking of the tax regime, China signed numerous double taxation agreements with countries around the world, in order to avoid double taxation of income. As a short conclusion, China represents a major business center that has open doors for any kind of investors planning to expand their operation in a stable and respected country.