Author Topic: Has anyone ever started a business in China  (Read 8297 times)

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Paul Todd

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Re: Has anyone ever started a business in China
« Reply #15 on: August 19, 2010, 04:31:54 am »
Lain, I could not agree more!............ maybe think about banking in Hong Kong and not the mainland.

Offline Mikael_Shim

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Re: Has anyone ever started a business in China
« Reply #16 on: September 06, 2010, 10:48:46 pm »
Paul, the procedure you described looks more like setting up an agent or representative office in China to act on the behalf of a foreign company. I know quite abit about this part despite having been to China yet. Because i know people personally who have made it, and i also have eventual personal plans to do so.  Figures might appear sky high, but i can give plenty of sources that would confirm. Or just use Google and you will find its correct.

As a foreigner you can set up shop for 4 different kinds of businesses forms. Depending on what you will do. Foreign companies still have lower taxes i think around 22 or 23% today whereas the Chinese pay 33%. The tax ease on foreign investers was as low as below 20% but is gradually going up every year and should be on par with the Chinese in 2015 i think.

However only 2 of these would apply to most if you start from scratch. The other forms are similar to office/rep or subsidiary.

Ofcourse, these rules do not apply if a Chinese citizen starts a business. But for a foreigner this is what i know and i just had to recheck again if anything has drastically changed this year but cant find it has. This is in regards for setting up the equivalent to a LTD.

If you are gonna do business with clients outside of China but run your operation from within China. The  minimum amount you will have to shell is 500.000RMB. Yes, 0.5mil. If your company will have its own production the figure is 1 million RMB. That covers all registration fees , minimum share deposit and necessary investments to have your LTD company on paper. The registration process and all forms are many. And the process time for a foreigner are often quite long. You hire someone to do the dirty work or you will get lost.

If you are exporting goods as a foreigner you also need an export license.

Second choice is if you intend to only do business inside China. But still register as an LTD. Its abit cheaper but still alot of Yuans.

Remember however, the cost is not a pure investment.  A great part also stays in the stockshare.


A much easier and cheaper way to start an LTD (I would not recommend any other flavour then LTD unless ur willing to stand as personally economically responsible ifg things go sour). Is Hong Kong

China did not enforce the mainland taxes and regulations on the HK business market and it seems quite unlikely they will any soon. Hongkong is one of the few accepted offshore countries that are not under OECD investigation together with Sychelles and Panama. Even though Hongkong would seem much similar to the offshore tax paradises it is not regarded as one.

The great difference in Hong Kong is that company tax is territorial. And the tax is still low at 16.5%. With territorial means you ONLY have to pay tax on activities that takes place in Hong Kong. You only pay tax on the net profit. Interest rate profits etc are taxfree. The minimum amount of stockshare is HK1$. The process takes about 15 days if you have all papers in order. Few steps you have to make if you want your LTD solid however.  Quickest route is to have a professional Consult Agency do all the work for you, thats what my former colleague did. That would sum up like:

Establishment: 1900€

Add 500€ for a corporate bank account with HSBC Hong Kong.

Add 900€ for an anonymous director & shareholder solution. This is done by setting up an anonymous Belize Holding Corporation which you own and control solely. The Belize Holding Corporation is then the shareholder & director of your Hong Kong Company.

Add 600€ for a virtual office that includes mail forwarding, a local shared phone number answered by a receptionist, and a local shared fax number.

OR

Add 1300€ for a virtual office that includes mail forwarding, a unique phone number answered by a receptionist in your company name and a unique fax number.


Thats pretty much it in short words. And perfectly legal. But then, you need to learn and understand how to run business in Hong Kong too. U have to do all the taxpapers and reports once a year. I would recommend you hire someone to do it for you properly.

However, if u wanna sell goods from HK into mainland there have been some changes from what i have heard and those i am not up2date with yet.

If anyone needs more detailed info just ask, if i cant answer specifically i know people who can.

Also, i dont know if these rules would differ any if u were married to a chinese citizen per say. Those are unknowns to me and above is solely based on you being a foreigner who wants to establish yourself in the region.

There might be lesser forms of business to establish much cheaper but without any security. But official documents in English regarding these i have never seen.

And sure, i know alot of people who do overseas business privately in not just China but Thailand and Vietnam too. But then you are a villain in the eyes of the Govt and i doubt most of you would want that is s*it happens.

Noteworthy, most companies establish in the eastern region which has 63%+ of all new companies since 2008.


And yes.. im new here. Hello :) .. God knows why i was reading and posting on the hideous forum on the main site and didnt go here straight away.

I *might* have plans to look into setting up shop later and have investor too if the idea seems doable and profitable. But i will first have to actually go there, which i might for a period of 6 months. I will make a post about that in another section where i would be grateful to get some feedback for those with more experience.
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ttwjr32

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Re: Has anyone ever started a business in China
« Reply #17 on: September 07, 2010, 12:59:11 am »
Mikael,

well welcome to the forum. and the post was very informative so it is updated information as of your posting?
just curious

Ted

Paul Todd

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Re: Has anyone ever started a business in China
« Reply #18 on: September 07, 2010, 01:06:03 am »
Hello Mikeal,

Welcome to the site, it's good to have you here.
Thanks for taking the time to write such an excellent post. It's always nice to have genuine up to date information and I think you have now become our resident expert!
I have long suspected that Hong Kong would prove an easier route than the mainland. I for one will certainly be asking you a few questions! :)
Were not all about business here so tell us all about your journey so far, have you found your lady yet?

Offline Mikael_Shim

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Re: Has anyone ever started a business in China
« Reply #19 on: September 07, 2010, 01:25:26 am »
Thank you! :)


Yes, info should be up to date. HK is verified for sure. But need to investigate about selling to mainland. You will see a strange occurence if you visit any of the online distributors from HK that if you try to pick China Mainland as destination it will be declined. But rest of world is good. So i know something has changed just dont know exactly what it was.

Hehe, im far from just business too. very far from. I think i have had a little different journey compared to most of you here and i will be posting about it in a few minutes and any input would be most welcome.

Correction though, the Chinese companies used to pay 33%, it has of late been reduced to 25% and foreign companies will be at 25% also by 2015.
« Last Edit: September 07, 2010, 01:28:07 am by Mikael_Shim »
"Just call me Mikkie , thats what all Asians do anyway"


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Offline Willy The Londoner

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Re: Has anyone ever started a business in China
« Reply #20 on: September 07, 2010, 03:32:57 am »
I arrived here with a business based outside China and now have an additional two businesses also based outside China.

My advice to anyone thinking of opening a business here is DONT.  Well at least not in Mainland China.  There is too much red tape and payments to be made.

Hong Kong is easier.  Some restrictions on opening bank accounts but easily overcome.  And there are many virtual offices and proxy company officers around as has been said.

Mind you I also have a virtual office in London and calls come direct to me.   I can also ring any number in UK for a nominal yearly fee.

Willy

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Offline Willy The Londoner

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Re: Has anyone ever started a business in China
« Reply #21 on: September 07, 2010, 03:44:01 am »
Good luck with that Arnold. I know a few Chinese businesses that have warehousing in the Czech Rep seems to be a favorite, think it's something to do with "Flexible" import laws. People often think that China is only good for export but the demand for imported goods is huge. Having connections in the Shanghai customs dept is a massive plus point and must help a lot with your importing plans. Like I said I hope it works out and  we soon see you being driven around Shanghai in the latest BMW in an Italian silk suit.

China is opening up more to import goods as they want to reduce their positive trade balance into something more acceptable to the World.  The professors talking on TV last night said that China is especially looking to import from and aid the USA financial problems.  Imagine China saving the mighty USA!    But they would expect some of the trade tarifs to be removed.

Willy
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Offline Mikael_Shim

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Re: Has anyone ever started a business in China
« Reply #22 on: September 07, 2010, 04:37:35 am »
Good luck with that Arnold. I know a few Chinese businesses that have warehousing in the Czech Rep seems to be a favorite, think it's something to do with "Flexible" import laws. People often think that China is only good for export but the demand for imported goods is huge. Having connections in the Shanghai customs dept is a massive plus point and must help a lot with your importing plans. Like I said I hope it works out and  we soon see you being driven around Shanghai in the latest BMW in an Italian silk suit.

China is opening up more to import goods as they want to reduce their positive trade balance into something more acceptable to the World.  The professors talking on TV last night said that China is especially looking to import from and aid the USA financial problems.  Imagine China saving the mighty USA!    But they would expect some of the trade tarifs to be removed.

Willy

Hehe, u seriously think the mighty USA can be saved at all? From what? Itself ? ;)

I just read, China holds 3 trillion us$ in US debts.   And i dont remember numbers, but its said Japan holds enough to collect the whole country 2 times over.  Pretty ridiculous amounts of money spent on waging war to control resources that could never come close to being worth it.  but as always, in war, money = nothing, resources = everything
« Last Edit: September 07, 2010, 10:42:15 am by Mikael_Shim »
"Just call me Mikkie , thats what all Asians do anyway"


对于世界而言,你是一个人;但是对于某个人,你是他的整个世界