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(A) Incorporation of Hong Kong Limited Company
(B) Incorporation of Overseas Limited Company
(C) China Company Formation - Incorporate company in China
(A)Incorporation of Hong Kong Limited Company
The Structure of Hong Kong Limited Company
The basic structure of Hong Kong Limited Company comprises at least 1 shareholder, 1 director and 1 company secretary.
Requirement of Registration
1. the number of shareholders / directors is between 1 to 50;
2. all individual shareholders / directors should be of age over 18, and hold a valid identity card or passport (no restriction on nationality) and provide the residential address of the individual shareholders/directors;
3. for corporation shareholders/directors, a copy of business registration license and certificate of incorporation and address proof of the corporate directors/ shareholders shall be provided;
4. appointing Hong Kong resident (must provide H.K. residential address, Hong Kong Identity Card No. or passport) or Hong Kong Limited company (must provide registered office address, Certificate of Incorporation of the Company) as company secretary;
5. providing registered office address in Hong Kong;
6. paying Hong Kong Government fees in due course.
Ways of Registration
We provide different ways of registration: set up a new limited company or purchase of ready made limited company.
Set up a new Hong Kong Limited Company : use designated company name, requires about 6 working days.
We will provide the name search service in Hong Kong Government. We will provide the following documents and services for each company which is incorporation by us.
1. Certificate of Incorporation and Business Registration Certificate;
2. 20 sets of Memorandum and Articles of Association, Share Certificates and 1 set of Statutory Book;
3. 1 set of Steel Common Seal;
4. 2 sets of Company chop;
5. Incorporation Form (Form No.: NC1);
6. First minutes of director;
7. Certified True Copy for opening bank accounts; and
8. Minutes of director to opening bank accounts and Green Box.
The authorized shares capital is HKD10,000 divided into 10,000 shares of HKD1 each. If the authorized shares capital is increased, we will charge the addition capital fee.
(B) Incorporation of Overseas Limited Company
The advantages of B.V.I. Limited Company
· the personal particulars of shareholders and directors need not to be disclosed to general public;
· no local tax demanded for carrying business operations outside B.V.I.;
· no exchange control;
· no requirement for reporting profits and financial situations to the B.V.I. Government;
· no requirement for meeting of shareholders and board of directors annually;
· no requirement for applying Business Registration License, Annual Return, Profits Tax Return and Statutory Audit if the company does not carry business in Hong Kong.;
The Structure of B.V.I. Limited Company
The basic structure of B.V.I. Limited Company comprises at least 1 shareholder and 1 director. Sole director and shareholder is also acceptable.
Requirement of Registration
1. all individual shareholders / directors should be of age over 18, and hold a valid identity card or passport (no restriction on nationality);
2. for corporate director, a copy of business registration license and identity card or passport and address proof of the director of the corporation shall be provided.
Ways of Registration
We provide 2 ways of registration: set up a new limited company or purchase of ready made limited company.
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Set Up a new B.V.I. Limited Company
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Purchase of ready made B.V.I. Limited Company
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Time Required
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about 10-15 working days
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Time required for Registration
** Usually there is no Chinese name for B.V.I. Limited Company. If client wants to add Chinese name for identification purpose, it will take 15 working days for completion.
| (C) CHINA COMPANY FORMATION. INCORPORATE COMPANY IN CHINA |
| China presents one of the world s greatest sourcing opportunities. Combining the advantages from the surrounding areas such as R&D capability from Taiwan and Japan, and China s WTO compliance policy, China is emerging as the manufacturing base for the world. |
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| Representative Office (RO) |
| A representative office is just a subsidiary of a foreign company in China. If your are looking for a company, which needs a local presence to manage services or coordinate outsourcing business activities or research developing Chinese market, then a representative office is useful and inexpensive vehicles for establishing a presence in China. Main purposes of a representative office are conducting market research, monitoring purchasing activities, marketing and sales administration for sales conducted between China and your parent company etc. Representative offices cannot write bill for service or sales to their clients in China. But no initial capital requirement is required to establish a Representative Office. However, you can act like a liaison in matter of ordering, shipping, collecting money and so on. |
| Joint Venture |
| Joint venture is business where a foreign firm goes into businesses with local Chinese partners. Joint venture is usually established to exploit the market knowledge, preferential market treatment, and manufacturing capability of the Chinese side along with the technology, manufacturing know-how and marketing experience of the foreign partner. |
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| Wholly Foreign Owned Enterprise (WFOE) |
| These are 100% foreign owned companies, originally developed for the specific purpose of encouraging foreign investment in manufacturing for export in Special Economic Zones (SEZs) in China, and they were prohibited from selling to the Chinese domestic market. Since a recent change in regulations, from 1 December 2004, WFOE s can now trade within China, and can sell wholly foreign manufactured goods in China. The capital requirements for such companies have also been dramatically reduced. |
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Disadvantages
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representative office
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Joint venture
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Wholly Foreign Owned Enterprise (WFOE)
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 Limited in its business scope, no trading permitted, and no invoicing permitted. |
Lack of information about the prospective Chinese partner. |
NIL
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| Business licenses are usually issued for two to three years, but are renewable. |
Need to retain comprehensive control. |
NIL
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| Still subject to taxation on its running costs at a rate of roughly 10%. |
Sharing the profits of the business. |
NIL
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Summary
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representative office
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Joint venture
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Wholly Foreign Owned Enterprise (WFOE)
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| A representative office is useful initial and relatively inexpensive vehicle via which to establish your business operation in China. But it is not a self-governing entity with all rights and responsibilities attached thereto, the responsibility remains with the parent or offshore company. Since it only handle liaison and co-ordination work, its business scope is very limited. |
For many years joint venture was the second most common method of investing in China, and investment regulations were heavily weighted in favour of the local Chinese partners. Most recently, the investment environment has changed significantly and most foreign investments are now in the form of Wholly Foreign Owned Enterprises (WFOE). However, it still is necessary or sensible for some investments to take the form of Joint |
WFOE is the most versatile business structure available to foreigners wishing to do business in China, and is the ideal structure for outsourcing of manufacturing etc to this low cost environment. There are considerable bureaucratic hurdles in setting up a WFOE (though things are getting simpler all the time). |
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| REGISTRATION |
| General Representative Office Application Materials |
| APPROVAL AND REGISTRATION |
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Application letter |
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Appointment letter of Rep Office legal representative(s) |
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Resume of Rep Office legal representative(s) |
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Identification of Rep Office legal representative(s) |
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Corporate documents of applicant (cert.of incorporation and business registration cert.) |
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Applicant s articles of association |
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Bank letter certifying applicant s credit of good standing |
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Lease Contract |
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Office Resident Confirmation |
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Land Bureau Lease Certificate or Property Certificate |
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Applicant s annual report and business description |
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Other Rep Office application documentation as may be required |
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| POST APPROVAL FORMALITIES |
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Representative Office Approval Certificate |
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Reppresentative Office registration with local Administration of Industry and Commerce |
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Representative Office personnel registration with local Administration of Industry and Commerce |
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Other Representative Office application documentation as may be required by local Administration of Industry and Commerce |
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| POST APPROVAL AND REGISTRATION FORMALITIES |
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Obtain Rep Office corporate stamp (chops) |
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Certificate of Enterprise Code |
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Customs registration |
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Tax bureau registration |
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| General WFOE Application Materials |
| PRE-REGISTRATION |
| Investor must apply for and reserve the WFOE s proposed name (in Chinese), and provide two back-up names in case the first name is not available. |
| Investor must know intended total investment, registered capital, term of operation, business scope, and jurisdiction of registration and business operations. |
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| APPROVAL AND REGISTRATION |
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Application letter |
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List of materials, equipment and technology to be imported |
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Project proposal |
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Corporate documents of investor (cert. of incorporation, memorandum & articles of association) (HK investors must provide business registration certficiate) |
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Investor Credit Standing Certificate (from investor s bank) |
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Investor s legal representative s identification (i.e. passport) |
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Power of Attorney (from investor to authorized representative) |
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Agency Agreement (between investor and authorized representative) |
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Feasibility Study Report (if applicable) |
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Environmental Impact Assessment report (if applicable) |
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WFOE s proposed Articles of Association |
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WFOE s lease agreement |
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WFOE legal rep s identification (passport, resume and photos) |
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Letter of Appointment of WFOE directors |
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WFOE Directors identification (passport, resume and photos) |
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Application form for registration of foreign invested enterprises |
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Power of Attorney (from WFOE s legal rep and directors to authorized rep) |
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Approval Form for the WFOE s Enterprise Code |
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Premises Lease Certificate |
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Other documents or materials as may be required by the relevant approval, examination and registration authorities |
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| Tax implications |
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Tax duty of a WFOE includes :
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Foreign and local staff s Individual Income Tax (IIT) |
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Business Tax (BT) |
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Income Tax (IT) etc. |
As a WFOE may have different tax incentive from local government, different tax rates applies to different company. However, one should bear in mind that tax in China can be categorized into wither federal tax or local tax (local government). In most cases, tax incentive can only be got from local tax.
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