Business Start-Up Costs in China

Business Start-Up Costs in China

Updated on Tuesday 09th January 2018

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Business-start-up-costs-in-China.jpgWith a solid and competitive market, not to mention the positive economic background, China is home to many foreign companies and a starting point of business on the Asian territory. Considering the particular type of business and the domain in which a company will operate in China, the business start-up costs will fluctuate. In order to understand the requirements of a company registration in China, the business expenses, and the relevant legislation, you should get in touch with one of our Chinese lawyers.

Costs for opening a company in China

The overall costs for the business start-up procedures have decreased, compared to previous years. China is opening up to foreign investors and the ease of doing business index for China, as evaluated by the World Bank in the recent years. The wholly foreign-owned enterprise (WFOE) is the most popular type of company among foreign investors. Although some of these companies that operate in specific business areas, like trading, retailing, business consulting, information technology etc., do not need a mandatory minimum share capital, others need to make this initial deposit when incorporating the company. The registered capital for a WFOE ranges between 100,000 CNY and 500,000 CNY.
Other costs incurred during the company incorporation procedure will be for the company seal with a value around 500 CNY or for obtaining various certificates. Depending on the documents you need to provide for incorporation, you may also have costs related to the notary procedures. Our attorneys in China can help you calculate these costs and handle the registration procedures.
Below, you can watch a presentation related to the business start-up costs in China:  


Setting up a business in China

Apart from the costs for the actual company incorporation, companies in China will also have to prepare a budget for purchasing a property in China or renting an office space. As the business expands and the company will want to hire employees, it will also have to deal with social security contributions. Our Chinese advisors can offer you additional information about taxation in China and the costs involved for an average Chinese company.

Tax incentives in China

Even if the business startup costs in China have decreased in the late years, entrepreneurs who are for the first time on the Chinese market can benefit from varied tax breaks usually met in the industrial sector. For instance, the corporate income tax imposed on companies that introduce and use the advanced technology on the Chinese market will be reduced by 50% for the next 3 years of business. Reinvesting the profits in the business in China will lead to a 40% off the corporate tax for that year.

Short economic overview 

The private sector in China met not only a significant growth but also respect on behalf of world’s biggest players on the market. The expansion of stock markets and the acceptance of foreign investments and trading have made the national currency compete with the US dollar at a certain point. In China, one can set up his/ her business in sectors like transportation, agriculture, tourism, textiles, food, telecommunication, IT, energy, chemicals, automotive, oil, and minerals, or mining.
The coastal regions of China registered a fast economic progress in the past decades, the authorities offering comprehensive and important support in the investment sector, in order to allow investors set up easily with their operations. Related to the Chinese economy, the export sector is solid and comprises customers worldwide, as the chief export supplies are the electronic devices, textiles, equipment, plastics, chemicals, machinery and many more.
For additional details in this matter, we invite you to contact our law firm in China and make an inquiry about specific taxes and costs for company incorporation


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