When choosing to do investments in China, entrepreneurs must think of the most appropriate business form for their purpose. One of the options they have is opening a branch in China, and it refers to a registered (already existing) company that opens a branch company. The latter is not an independent legal entity, being affiliated to the head company. Another important aspect is that a branch company can only develop business activities under the name of the parent company, respecting its business scope. Moreover, regarding branch company's employees and business assets, they are under the leadership of the head company. Our lawyers in China can provide more detailed advice and information on the matter.
Required steps in opening a branch in China
Usually, it takes a month to set up a branch company in China. Sometimes, special licenses are needed, depending on the activity domain of the company. Furthermore, in order to be able to open a branch in China, it's utterly necessary that the parent company's registered capital be paid fully and then verified. If you are interested in more details about the conditions that must be borne in mind when opening such a company, please get in touch with our attorneys in China.
As for the documents required from the parent company, the following are to be mentioned:
•certificate of approval;
•memorandum and articles of association;
•tax registration certificate.
Documents needed to form the new branch office are:
•legal representative identity documents;
We have also prepared a video about how to set up a branch in China:
The benefits of opening a branch in China
First of all, opening a branch office is cost-effective as the initial procedure is very simple. Secondly, a great advantage is the fact that the profit passed from the branch to the parent company is not subject to the withholding tax. Moreover, the transfer of capital between the two companies can be easily done, without any taxes, because no change of ownership happened.
If you want to find out more about what it takes to open a branch in China, please contact our Chinese lawyers and they will offer the assistance you need in the matter.