Frequently Asked Questions
Our company formation specialists in China often receive questions about how to set up a company in this country, and more precisely a subsidiary. We have prepared some of these questions, to which you will find the right answers for the dilemmas you might have. In addition, you will be able to get an idea of this type of structure before contacting our team of local agents.
1. Who can open a subsidiary in China?
Foreign entrepreneurs who want to grow their business in China
can consider setting up a subsidiary
. This structure is suitable for medium and medium companies abroad. We emphasize that registering a subsidiary in China
is a fairly simple process.
2. Can the subsidiary have a different name from the parent company?
Of course, according to Company Law in China, subsidiaries may operate under a different name than a company originating in a foreign country. Our local agents can provide you with more information in this direction.
3. Do you need a business license to open a subsidiary in China?
Yes, according to foreign investment laws in China, a company can only operate on the market if it obtains the necessary license for future operations. Assistance in submitting the necessary license documents can be provided by our team of agents.
4. How is the subsidiary known in China?
The subsidiary in China is also called Foreign Invested Enterprise (FIE) and is the structure preferred by international investors, due to the advantages offered.
5. Can the subsidiary be wholly owned by a foreign entrepreneur?
Of course, 100% ownership is the main advantage for subsidiaries in China. This means that entrepreneurs benefit from a flexible structure, but also complete control for the activities and direction of the respective subsidiary.
6. Can a subsidiary have other activities than those of the parent company?
Yes, this option is valid for Chinese subsidiaries and is a major advantage for this type of business structure. Do not forget to take into account the necessary licenses and permits before starting the operations.
7. How fast can a subsidiary be registered in China?
The process of registering a subsidiary in China is quite simple and fast if all the documents are in order and are accepted by the relevant institutions. We remind you that our team of local agents can offer you all the support in this endeavor, so do not hesitate to get in touch with us.
8. How are subsidiaries taxed in China?
Corporate tax between 10% and 25% is applied to Chinese subsidiaries. More information about the tax system in China can be given to you by our experts.
9. Is a VAT registration required for a subsidiary in China?
Yes, subsidiaries in China must be registered for VAT in this country. We remind you that the standard VAT in China is 13% for all taxpayers. Lower VAT rates are imposed under certain conditions.
10. What is the best structure to open a branch in China?
WFOE or Wholly Foreign-Owned Enterprise
is the right structure for setting up companies in China
, including subsidiaries. The formalities are quite simple and can be managed by our specialists in this field. As soon as you contact us, we will take care of the registration of your business.
Why invest in China
China is one of the world's strongest economies and an extremely important financial center, especially for foreign investors. With a dynamic and stable economy, affordable business costs, and an experienced workforce, China is among the favorites of international players looking for business development and substantial profits.
Free trade zones are available in China
, and there are already hundreds of foreign companies that benefit from an advantageous taxation system, but also from a stable and well-developed business climate. There are many reasons why China is in the attention of overseas investors, and the following statistics highlight other interesting aspects:
• The total FDI for China in 2019 was about USD 1.770 billion.
• In 2020, the service sector attracted the most of the investments, accounting for 70% of the total.
• According to the 2020 Doing Business report, China ranked 31st out of 190 world economies in terms of business conditions.
• 2020 is also the year in which China was declared the second largest beneficiary of foreign investments, immediately after the United States.