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Doing Business in China: Guide

Staff Reporter | 9:45 PM |
Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.

Below is a summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in China. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected from World Bank: Doing Business 

No.ProcedureTime to CompleteAssociated Costs
1Obtain a notice of pre-approval of the company name1 dayno charge
2Open a preliminary bank account; deposit fund in the account and obtain the certificate of deposit1 dayno charge
3Obtain capital verification report from an auditing firm2 daysCNY 350
4Apply for registration certification "business license of enterprise legal person" with SAIC, the organization code certificate issued by the Quality and Technology Supervision Bureau and registrationfor both state and local tax with the tax bureau11 calendar daysno charge (Fee exempted for micro and small size companies from 2012 to 2014 - otherwise 0.08% of registered capital)
5Obtain the approval to make a company seal from the police department1 dayno charge
6Make a company seal1 dayCNY 300
7Pay the fee for the organization code certificate issued by the Quality and Technology Supervision Bureau at the time of pick-up1 dayCNY 102 (Production cost of CNY 18 for Organization Code Certificate is exempted for micro and small size companies from 2012 to 2014)
8Register with the local statistics bureau1 dayno charge
* 9Open a formal bank account of the company and transfer the registered capital to the account1 day, simultaneous with previous procedureno charge
10Apply for the authorization to print or purchase financial invoices/receipts10 daysno charge (Fee exempted for micro and small size companies from 2012 to 2014)
11Purchase uniform invoices1 dayno charge (Fee exempted for micro and small size companies from 2012 to 2014 - otherwise CNY 1.05-1.67 per book of invoices)
12File for recruitment registration with local career service center1 dayno charge
* 13Register with Social Welfare Insurance Center1 day, simultaneous with previous procedureno charge
* Takes place simultaneously with another procedure.