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Business registration in China |
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Unlike Hong Kong and
other parts of the Western world, setting up a business entity in
China requires careful consideration of a hosts of factors which critically
affect its business success in China. Among the most important of
them are the following:
·Tax
·Location
·Forms of establishment |
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Comprehensive Study |
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We need a comprehensive
understanding of our client's entity to enable us to come up with
our recommendation for the most appropriate course of action for them
to take. At the commencement of our work, we shall undertake a detailed
study of their business and operation to identify:
·Business scope of investing company
·Business scope intended for the set-up in Mainland China
·Objectives of management (at various levels) for the Mainland Chinese
set-up
·Short, medium and long term plan for the set-up in China
·Detailed flow of information
·Logistics of operation
We shall conduct interviews with a representative cross section
of client's staff, review necessary documents and observe how relevant
work and procedures are carried out. These activities will take
place at both their office in Hong Kong and any set-up that may
be in China.
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Formulating the Course of Action |
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The comprehensive study
is designed to give us all the information we need, and factors to
consider, to come up with a most appropriate course of action for
the client to take. When formulating our recommendation we pay particular
attention to: ·Legality of the set-up
·Business needs
·Costs of operation
·Impacts on logistics of operation, and therefore business results
·Tax implications
·Administrative burden and convenience
·Scope for improving workflow
·General operation environment as regards local regulatory requirements,
and approach and mentality of local bureaucrats
We shall present a set of alternatives as regards location and
legal form and structure for this prospective set-up, detailing
their pros and cons to facilitate management decision. An action
plan will be set out to highlight the important stages of this process,
give an indication on the time frame for the completion of the whole
task, and the role played by the key members responsible for implementing
this important change of operation.
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Execution |
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The implementation of
our recommendation has to be a joint effort between client's staff
and ours. In addition to handling all the legal and regulatory formalities
for setting up the intended entity in Mainland China, we shall render
any assistance necessary to enable client's staff to transition into
new arrangements emerging from the creation of the new entity. Staff
at client's end will need to be aware of the potential need for certain
changes to their existing mode of operation and be prepared to adapt
to them. We shall be closely involved in this process to ensure a
most smooth and painless transition. |
| Comparison
amongst different requirements of company set-up in China and Hong
Kong |
| Business
Registration |
Hong
Kong |
China |
Notes
on China |
| Company Name |
Few limitations |
Very heavy limitations |
e.g. "China" within the company name can only
be approved by Beijing |
| Registered Address |
No limitation on number of companies at one registered
address |
In principle One registered address,
one company |
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| Business Scope |
Sky is the limit |
Very specific and narrowly defined
in most cases |
There are restrictions on certain businesses |
| Business Life |
Perpetual |
Number of years of intended operation
to be stipulated |
Extension allowed |
| Legal Representative |
No such requirement |
Required |
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| Registered Capital |
At the discretion of the company |
Minimum dictated by the government
for different industries |
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| Government Departments Involved &
time frame |
Companies Registry and Inland Revenue Department for
business registration taking a few days in most cases |
Principally Commission of Foreign
Trade and Economic Cooperation and Administration of Industry and
Commerce taking 1 to 3 months in most cases |
Some other government authorities will also be involved
depending on the industries which might take a much longer time to
complete business registration |
| Documents for application |
Minimal |
Voluminous including application form,
memorandum and articles of association, contract (for joint venture),
project feasibility study, the investors' background information,
etc. |
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