bannarTop

GLOBAL INFO

China

COUNTRY:

the People's Republic of China

QUESTION:

ANSWER:

1.      What are the main company forms in your country?

a.      Limited Liability Company;

b.      Company Limited by Shares;

c.      Partnership; 

d.      Limited Partnership;

2.      Which is the most preferred company form by foreign investors?

Limited Liability Company

3.      What are the basic capital requirements of this company? (minimum amounts, types of capital, deadline of capital contribution)

In accordance with currently effective Company Law in China:

a.     No basic requirements on minimum amounts of capital and deadline of capital contribution;

b.     Regarding the types of capital, a shareholder may make capital contributions in convertible foreign currency, or in non-monetary properties that may be assessed on local currency like machinery and equipment, industrial property, proprietary technology etc. (the assessment shall be issued by an asset appraisal institution  established in China in accordance with laws and regulations)

Approved by the examination and approval authorities, the capital also can be the RMB profits of foreign investor’s other enterprises in China.

4.      What are the basic rules of shareholders liability for company debts in this company?

a.      For a limited liability company, a shareholder shall be liable for the company to the extent of the capital contributions it shall paid.

b.      Where any of the shareholders of a company evades the payment of its debts by abusing the independent status of legal person or the shareholder's limited liabilities, if it seriously injures the interests of any creditor, it shall bear several and joint liabilities for the debts of the company.

c.      After the establishment of a limited liability company, if the actual value of the capital contributions in non-monetary properties is found to be apparently lower than that set forth in the bylaw of the company, the difference shall be made up by the shareholder who offered them, and the other shareholders of the company who established the company shall bear joint and several liabilities.

5.      What are the basic management requirements for this company? (only natural persons, or nationals can be managers etc.)

There is no nationality requirement for managers.

6.      How long does the registration procedure of this company take?

1.     90 days for administrative examination and approval;

2.     30 days for registration and obtain a business license.

3.     The registration procedure will be reduced to 7 days in some areas with favourable policies, such as China (Guangdong) Pilot Free Trade Zone.

7.      What are the main costs of formation of this company in local currency?

Translation costs, all the documents file to administration for formation shall be in Chinese.

8.      What is the average attorney’s fee of the formation of this company in local currency?

RMB 1500-2000 per hour

9.      What are the basic publicity requirements of this company (filing of company changes, financial reports, etc.)

The company formation and every modification shall be filled in the competent Administrative Department for Industry and Commerce for records and be published to the public´╝Ť

10.   What are the main auditor requirements?

1.     The annual accounting statements and liquidation accounting statements of a foreign-invested company shall be verified by a certified public accountant of China and get the certification in accordance with the provisions of Chinese financial and tax authorities.

2.     All the  annual accounting statements, liquidation accounting statements and the auditor report shall report to financial and tax authorities and file in the competent approval authorities and the competent Administrative Department for Industry and Commerce for records.