The best thing that can happen to an investor is seeing his/her firm grow rapidly into a multinational. However, this requires some effort and the first step is registering the company in an offshore jurisdiction of choice. China is one of the most outstanding jurisdictions for foreigners because of the numerous growth opportunities. The country has the largest population on the globe, and you can anticipate driving high sales, profits, and success. So, are you ready for company formation in China?
Let’s Take a Deeper Look at China
Covering an area of 9.6 million square kilometers, China is the third-largest nation on the globe and is divided into 23 provinces. The country emerged from the ancient civilization in the northern plains and was initially based on monarchies until the 19th century. It is a member of a number of multinational organizations, including the UN Security Council, Silk Road Fund, BRICS, G8, G20, and APEC. All of these affiliations work towards helping its companies to access larger markets across the globe. Other useful facts you might want to know include:
- Starting from 2010, China has remained the globe's second-largest economy on the basis of nominal GDP.
- When the GDP is calculated based on Purchasing Power Parity (PPP), China has the largest economy on the globe as of 2014.
- China’s GDP grew rapidly from $150 billion in 1978 to $14 trillion by the close of 2019.
- Since the introduction of the economic reforms of 1978, the country’s GDP has jumped from $150 billion to $14.3 trillion in 2019.
- The economy of China is highly diversified and you can target areas such as manufacturing, retailing, textiles, hospitality, mining, and green energy.
- In 2019, China overtook the United States in the number of people with a net worth of more than $110,000.
Now that China's economy is projected to continue with an uptrend growth, why not take advantage of the expected shift?
The Three Types of Businesses You can Form in China
In line with the Chinese laws on company formation, there are a number of formations that you can select. However, the three we have listed below are the most common:
- WFOE (wholly foreign-owned enterprise): This type of company allows the investor to enjoy 100% shareholding of the new company in China.
- Representative Office (RO): Unlike a WFOE, an RO company has major limitations because you cannot engage in profitable business activities. Therefore, this would only work well for activities such as marketing.
- Joint Venture (JV): If you want to grow your firm in China rapidly, it might be a good idea to think of a joint venture. It is a limited liability company with a unique structure because you need to form a partnership with a local Chinese.
NOTE: You need to carefully study the Chinese market to establish the viability of the selected location and market.
Work With an Expert Agency for Help With Company Registration
As you can see, the process of company formation in China can be complex. How do I even start selecting the preferred location? How can a foreigner take advantage of the supportive policies installed by the Chinese administration? To make the matter worse, you have to deal with multiple offices. If you think that the process is complex, you are not alone. A lot of people get exhausted midway, but you can make the process seamless by working with an agency.
Experts in company formation in China like Hawksford specialize in assisting clients in moving their enterprises to China. For them, the high potential of the jurisdiction means faster growth and success for investors. That is why they stop at nothing in ensuring companies of foreigners are properly incorporated. Furthermore, working with these experts makes company registration fast and affordable. Therefore, avoid making the mistake of trying to register the company on your own: let a professional do the tough and bigger part!