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Steps to Open a Company in Mainland China

Pros and Cons of Operating a Business in Mainland China

Entering the mainland Chinese market has become an increasingly popular choice for Hong Kong businesses. However, for companies entering the mainland market for the first time, understanding the costs of establishing a China company is crucial. Here is an overview of the costs of establishing a mainland company for Hong Kong residents to help you better plan your business.

Pre-registration Expenses 

Approval of Company Name

When registering a company, applicants need to prepare a valid and available company name. To avoid duplication, it is usually necessary to conduct a name search to ensure that there are no duplicate company names before applying for pre-approval of the company name. After paying the approval fee and completing the approval process, the company will receive a one-month name reservation to protect the company name.

Obtaining a Company Address

Applying for the establishment of a foreign-funded company requires preparing a valid company address for filing with relevant departments. There are generally two ways to obtain a company address: physical office (such as traditional office and serviced office) and virtual office (virtual registered address). Depending on your needs and budget, you can sign a contract with your preferred service provider.

Notarization Fees for Overseas Investors' Qualification Documents

Shareholders as individuals: Hong Kong, Macau, and Taiwan residents only need to present their travel permits or Mainland Travel Permits for Taiwan Residents and do not need to notarize their identity documents. Foreigners only need to present their mainland entry and exit certificates issued within the last six months and do not need to notarize their passports.

Shareholders as Hong Kong companies: Establishing a foreign-owned enterprise requires notarizing relevant documents of the Hong Kong company, including:

• Certificate of Incorporation
• Business Registration Certificate
• Latest Annual Return (NNC1)
• Shareholder and Director Register
• Registration certificates of shareholders and directors
• Directors' signatures

Shareholders as companies of other nationalities may require additional documents to be notarized, to be confirmed separately.

The fees charged by Chinese notaries are not uniform, and detailed charges need to be negotiated with the responsible notary.

Company Registration Fees

Application for Business License

After preparing the required documents, you can formally apply for a business license. The business license is an important proof document for the company, and enterprises or individual operators without a business license are not allowed to operate or engage in other business activities. After submitting the application materials and passing the review, you can make an appointment to collect the license. If you want the application process to go smoothly, you can seek the services of an agency company.

Company Seal

After obtaining the business license, you need to go to the designated seal engraving point to complete the seal engraving. Company seals, financial seals, legal representative seals, etc., are very important in the daily operation of the company (do not lose them, as reissuing them requires the presence of the legal representative). After completing the seal engraving process, the company registration is considered basic. The total cost of seal engraving is approximately RMB 500.

Post-registration Expenses

Trademark Registration

In addition to a valid company name, a trademark is also an important asset for the company. Registering a trademark can effectively protect the company's rights and image. Foreign-funded enterprises with business premises in mainland China (including Hong Kong, Macau, and Taiwan) can directly submit paper or online applications and pay the corresponding fees. In addition, through legitimate trademark agencies, you can easily handle trademark searches, registrations, and other procedures.

RMB Basic Account and Online Banking Application

To maintain the company's future operating expenses, foreign-funded companies need a mainland bank account, preferably with an online banking account. Different banks in mainland China have different account opening fees, and it is necessary to arrange for the legal representative or a director to meet the due diligence requirements of the bank. Before applying, it is recommended to conduct research or seek the advice of professionals to find a bank that suits your needs.

Fees for Various License Applications

After obtaining the business license, if you want to engage in special industries such as food, beverages, construction, and telecommunications, you will need to apply for additional operating licenses. The fees for these licenses vary depending on the specific business and region. It is recommended to collect information or seek the support of professionals before establishing a company to save time.

Conclusion

The cost of establishing a China company varies due to various factors, including the city, company type, scale, and nature of the business. After establishing the company, there are also expenses such as salaries and rent. Before planning to enter the mainland market, it is recommended to seek professional advice to ensure a comprehensive understanding and planning of the costs of establishing a China company.

Entering the mainland market brings enormous potential and business opportunities. The incorporation service in China by OneStart Business Centre will help you better cope with these challenges and provide professional support for your business. To learn more about establishing a mainland company, call 3575 6888 or WhatsApp OneStart Business Consultants.

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