Mention the name China to potential investors, and the response is likely to be, “How can I take advantage of the huge potential in the Jurisdiction?” For Australians, proximity to Asia is only one of the driving forces, but there is a lot more to expect. The large population in China and its strategic location at the heart of the Far East mean that you can easily grow your business into a multinational.
To expand to this high-potential market, the first step is company incorporation in China. Here is a comprehensive guide to Company incorporation as an Australian entrepreneur.
Types of Companies that You Can Register in China
To open a company in China, there are three main options that Australians can consider:
- Wholly Foreign Owned Enterprises (WFOE)
This is a type of company that allows foreigners to have 100% shareholding. If you are an Australian entrepreneur, it implies that you get full control over the running of the company. Furthermore, you will not have to share profits as it happens with partnership types of business formations.
- Joint Venture (JV)
A joint venture is a type of company that requires you to enter into a partnership with a Chinese. Unlike in a WFOE, using a joint venture means you need to work together with your partner to make key decisions. However, a JV might be a better option if you target growing rapidly in China by utilizing the local partner’s already established networks.
- Representative Office (RO)
Unlike a WFOE or JV, a representative office is fast and easy to register, but it comes with serious limitations. For example, you cannot enter into business deals using a representative office, or receive money from clients. Consider registering a representative office in China when targeting activities such as market research and looking for new partners.
How to Register a Company in China
Once you have made up your mind on the type of company to register in China, here is the process of incorporation that you need to follow.
- Select the preferred company scope.
- Prepare the required documents.
- Apply for an approval certificate.
- Apply for a business license.
- Register with the public security bureau.
- Open a bank account.
- Register at the tax bureau.
Select an Agency to Help You Register a Company in China
It is important to appreciate that while China as a business hub is so attractive; the process of registering a company as a foreigner is never easy. The challenge mainly arises from the long list of documents that have to be prepared and the fact that you need to deal with multiple offices along the way. See, this might require making a number of flights from Australia – a fact that could significantly raise the cost of the registration. However, an agency, which comprises of experts in company registration, can simplify the process for you.
In addition to assisting you with company incorporation as an Australian entrepreneur, an agency can also help with the following:
- Tax advice.
- Support when filing returns.
- Tax minimization.
For an Australian entrepreneur targeting the Chinese and the larger Far East market, registering a company in China can be a good springboard. However, it is important to have a helping hand, especially during the incorporation phase, and an agency will come in handy. Do not let that opportunity to grow your business into China slip away – it is time to venture into China and become the next most revered multinational.