How to Start a Business in China

1.Detry proving it is a duly formed if the proposed WFOE will conduct a business approved for foreign investment by the Chinese government. For example, China prohibited private entities from 100% engaging in mining, education, hospital and others. Be sure your business will be legal.

2.Provide the documentation. The investor in/owner of the WFOE must provide the documentation from its home existing corporation, along with evidence showing the person from the investor who is authorized to execute documents on behalf of the investor. The investor also must provide documentation demonstrating its financial adequacy in its home country.

3.Have the correct documents. The following documents are normally needed from the investing business entity:
Articles of Incorporation or equivalent (copy)

Business license, both national and local (if any) (copies)

Certificate of Status (original) (U.S. and Canada) or a notarized copy of the Corporate Register for the investor or similar document (original) (Civil Law jurisdictions)

Bank Letter attesting to the account status of the investor company (original)

Description of the investor's business activities together with added materials such as an annual report, brochures, website, etc.

4.Submit the four documents above in Chinese and stamped by relevant translation institution. The last one may be translated into Chinese or summarized in Chinese.

5.Provide the proof of ownership. Many investors create special purpose companies to serve as the investor in China. Therefore, there are other documentations required for the specific business proposed from China’s company. The more complex the project is the more documentation will be required.

6.Prepare all of the above documents in Chinese.

7.Wait. It usually takes two to three months for governmental approval, depending on the location of the project and its size and scope. Large cities like Shanghai tend to be slower than smaller cities. The investor must pay various incorporation fees, which fees vary depending on the location, the amount of registered capital and any special licenses required for the specific project. Typically, these fees equal a little over 1% of the initial capital. On large and/or complex projects, the approval process often involves extensive negotiations with various regulatory authorities whose approval is required. For example, a large factory may have serious land use or environmental issues. Thus, the time frame for approval of incorporation is never certain. It depends on the type of project and the location. Foreign investors must be prepared for this uncertainty from the outset.

If you have any questions about your China business, please feel free to contact us for free.
Contact us in Shanghai, Beijing, Shenzhen or HK for more details: