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How To Run Business in Shenzhen

Updated:2021-12-2 16:35:27    Source:www.tannet-group.comViews:318

Regardless of the business idea in mind, the first step before considering doing business in China is to check whether such business activity is allowed for foreign investment by the Chinese government.

Choose a district and find a physical office
Shenzhen is administered by the provincial government and is a sub-provincial class city with independent planning status. There are 11 administrative districts: Futian, Luohu, Yantian, Nanshan, Bao’an, Longgang, Longhua, Pingshan, Guangming, Dapeng New District, and Shenshan Special Cooperation Zone. Furthermore, the city is home to the Shenzhen Qianhai Shekou Free Trade Zone, which benefits companies that fall under a list of encouraged industries.  

Choose a business name
Most company registration processes start with getting your company name approved. While you can register an English name for the company, only the Chinese name is legally binding, and it follows a specific structure. Whatever your trade (brand) name is, the Chinese name should also include the type of business and the registered location, followed by the organization form at the end. 

Define your business scope
Business scope is a list of business activities that your China company can conduct in China. Generally, you can only issue Chinese tax invoices in the name of those activities already approved in the business scope. It is essential to make your business scope as precise as possible to avoid any wrong classification of the company's industry. The registration authority (Administration of Market Regulation, or AMR) often plays a strong emphasis on following the standard expression of the business scope according to the“Classification of Industries of National Economy”.

Project the working capital you need
Since 2014, China has implemented the “Registered Capital Subscription Registration System”. Shareholders of the company may independently agree on the amount of capital contribution, the method and timing of capital injection, which shall be defined in the Articles of Association of the company. Although the minimum registered capital requirement was cancelled, shareholders should still consider capital contribution plan carefully. 

Prepare notarized and certified corporate certificates of the parent company.
Among the set of application documents required to register a company in China, notarized and certified corporate certificates of the parent company are usually a time-consuming item to prepare. The FIE investor must provide documents to prove that the investor, be it a natural person or a corporate person, legitimately exists. If the investor is a natural foreign person, some districts of Shenzhen might require the presence of the investor and to verify his/her identify when the application documents are presented physically to the local AMR office. If the investor is a corporate person, the corporate certificates must be notarized by a public notary, certified by the Chinese Consulate/Embassy, and translated by a certified translation company before they can be recognized in China. The process of notarization and certification may vary depending on the country or region. From a registration perspective, many investors use a Hong Kong Company to invest in mainland China to save time since the certificates of a Hong Kong company are bilingual in Chinese and English, and they only need to be verified by a China-Appointed Attesting Officer.

Identify your management personnel
Article 31 of the Foreign Investment Law stipulates that the organizational form, organizational structure, and activity criteria of foreign-invested enterprises shall be governed by the Company Law, the Partnership Law of the People’s Republic of China, and other laws. Therefore, the organizational structure of foreign-invested limited liability companies and joint-stock limited companies should be established and registered in accordance with the relevant provisions of the Company Law. The applicable requirements of the Legal Representative, Directors, Supervisors, and other senior.

Filing with Administration of Market Regulation and obtain the business license and company chops
In Shenzhen, the company registration application can be initiated online at the government’s e-service platform. As a first step, you must first pre-register the company name. If the name is available to register, you will be directed to an online form that you are required to complete. After submitting the online information, you can then make an appointment with the local Administration of Market Supervision to submit the originals of the application materials, which generally include all the signed forms, original notarized and certified corporate certificates of the foreign investor, the China company’s Articles of Association, the appointment letters of Legal Representative, Director(s), Supervisor(s). If the documents are in good order, the business license can be issued and printed on the spot. After you obtain the business license, you can then go to the Public Security Bureau to carve company chops. A complete set of mandatory company seals include the company’s official seal, finance seal, invoice seal, and the personal seal for the Legal Representative.

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