Foreign direct investment in China providing one of the most impressive, thrilling and interesting opportunity to foreign investors in all manufacturing and most service industries.Growing domestic market, proximity to important foreign markets, investor friendly policies and an educated and skilled workforce is encouraging inward Foreign Direct Investment in China.

FACTS

Official Name: People’s Republic of China

Capital: Beijing (Peking)

Population: 1,355,692,576

Official Languages: Standard Chinese, Mandarin

Currency: Yuan

Area: (9,596,960 square kilometers)

Major Mountain Ranges: Himalaya

Major Rivers: Yangtze, Yellow

Chinese companies today have dramatically expanded their foreign presence with foreign investments.World Investment Report published by UNCTAD in the year 2017,ranked China as the third largest FDI recipient in the world after CHINA and United States.According to records,Foreign direct investment in China increased by 9.8 percent in the year 2017 which is around USD 121.59 billion.

Large pool of foreign investors has started their business operations in China in sectors like Information Technology,Telecommunication, Engineering, Manufacturing & Production and Agriculture.This sector are not only popular among foreign investors but has brought endless investments opportunities.

China too a great extent liberalised its market economy and brought reforms to its policies in the late 1970s. Booming economy and swift growth of service sectors,made China one of the most attractive destinations amongst foreign investors.More countries are doing foreign investments in China,which has encouraged investors for setting up a company in China.

This too a great extent has made possible the establishment of leading companies in China.While language barriers have affected small companies and individuals from venturing into China, there are still diverse scope for foreign investors to invest into china.

Please connect with us to know more in details. We can find you the best investment opportunity that meets your business requirements. Here you will find a wide range of helpful information, all designed to help you and guide you regarding how to set up a company in China with an investor visa ,which will increase your chances of getting the benefit.

Welcoming Foreign Investment

• China openly welcomes global investment in the country and is bound under WTO rules to further open its industries to foreign investors.A business organisation considers various factors for setting up a company or business in a foreign land.China provides the perfect business environment that includes flexible government norms for doing business, convenient costs, a good market size, and economic stability. All this factors have greatly attracted and increased the attention amongst multinational companies for business.
• Chinese market is giving the perfect environment to foreign investors to run their business activities.According to Deloitte Touche Tohmatsu Limited a significant structural change for foreign investment was announced in the year 2004, that completely transformed the system and allowed international investment only in specific, and government-designated sectors.

Quality Workforce at low cost

A foreign investor for their business set-up can find quality workforce at low cost with foreign direct investment in china. Chinese workforce is well known for its hard work, dedication, loyalty and discipline. This is a significant factor which helps in controlling costs for the business.

Market Size

• Having a population of more than 1 billion, there are unlimited investment opportunities available to foreign investors due to the presence of strong buyers’ market. Such large scale population regularly are in need of products and services which has helped in developing a tremendously potential domestic market for selling products and services.
• The strength and capacity of companies – backed by foreign capital – to sell to local market makes China a popular destination for FDI. As the Chinese economy continues to grow industries such as healthcare, information technology, engineering, and luxury goods, is gaining a bigger footprint in China as local conditions, are favouring their expansion.

Strong Economy

For foreign investor it’s surely a big advantage to invest in China as Chinese economy is stable and growing rapidly. Having average growth rate of 7.50% with low rates of inflation makes China definitely a stable market for international investment.

Investor’s friendly laws

In recent years, laws related to foreign investment has eased which is motivating foreign investors to look for alternative investment market.Such changes have proved beneficial for overseas companies and is supporting the decision of incorporating a company.

The Chinese government has initiated a series of regulations and accordingly have amended laws which has made the regulatory controls flexible for foreign-invested enterprises. Theyhave streamlined the system for foreign investments specially for starting company incorporation.

Government Measures to encourage FDI

The Government of China encourages and motivates foreign direct investment in few sectors that includes high technology,production of equipment or new materials, the service sector, recycling, clean production, the use of renewable energies and environmental protection which greatly encourages foreign investors to look for investment opportunities.

China’s entry intro world trade organization in the year 2001 has proved to be beneficial for foreign investors Flexible foreign investment policies, attitude towards investment, inexpensive labour, increasing purchasing power has made it easy and convenient for international investment.

Investment opportunities in China are immense and specially can be found in the following sectors.

• Agriculture, breeding, forestry and fishing, extraction, manufacture and services.
• Chemical industry, insurance and bank, high technology, renewable energy, environment,Telecommunications

China presently has taken the second position amongst leading countries of the world in terms of foreign investment which is attracting foreign investors.Foreign companies can opt for any of the given four business models for company formation and successfully operate their business in China.Business models are creating an environment where foreign investors are getting lots of return on future investments.

Wholly Owned Foreign Enterprise (WOFE)

WOFE is a limited liability company wholly owned by the foreign investors. China Investment allows a WOFE owned by foreign investors, to run a successful business without the involvement of a Chinese partner.

Mainly there are there are three types of WOFE;

1.Manufacturing WOFE; allowed to engage in manufacturing.

2.Consultancy (or Service) WOFE; allowed to provide consultancy services

3.Trading WFOE or Foreign-Invested Commercial Enterprise (FICE); allowed to do trading, Wholesale, Retail or Franchising.

WOFE giving various benefits to foreign investors

• It allows the use of foreign currency, machinery, equipment, intellectual property rights and proprietary technology for investment.
• Profits can be remitted abroad.

Foreign Invested Partnership Enterprise

Incorporating a company under this model can be done by a foreign investor with very little capital.There is no minimum registered capital required for FIPE. This model allows and authorises an investor to generate revenue, hire local and skilled foreign professionals, & to enter into contracts with local business ventures in China.

Joint Venture

It is a limited liability company where Joint Venture requires a Chinese investor and a foreign investor to invest together for exciting investment opportunities Together they can create an entity, share profits, and assume the management positions for the venture.It greatly supports foreign investors to enter in restricted sectors like; Mining, Education, Entertainment and more.

Representative Office (RO)

It is a liaison of its parent company. It does not require registered capital. However, its operation is restricted to product or service promotion, market research of parent company’s business, in order to understand the business in China.Furthermore, generating profits and entering into contracts with local companies are prohibited under this model.A foreign investor can initially set-up the RO for planning and which will help in minimising the uncertainties.

China is considered to be having the largest market which is quite influential and is expected to surpass the U.S. economy in future in order to become the largest economy in the world.

1. Company registration is mandatory for a foreign investor to start with a new venture. The company has to register the name of the business with local State Administrative Bureau for Industry and Commerce (SAIC). Name of the business should be in Chinese and should include two alternative names in case the first choice is already taken.

2. All necessary documents required for company incorporation must be prepared properly for exploring different investment options.Reports related to finance, risk factors, land usage, human resource,wages policy,activities and operations, any specific requirement of public facilities has to be properly mentioned.

3. General business plan and budget; including name of chairman, directors, etc must be submitted to the local government authority. It will be duly examined by the local government authority whose main work will be to assess the potential effect of the business on the local economy.

4.Benefits of investing in China is immense, as according to procedure an investor after 30 days of approval of the business proposal, can obtain the business license (provided by SAIC, which takes around 5-15 days). With the license and the business registration certificate,the business is considered to be a legal entity.

5. After obtaining the license it is important to register with relevant government authorities.

Preferential tax treatment

Since 2008, FIEs and domestic enterprises have been subject to the same enterprise income tax, set at 25 per cent, with preferential treatment available to only high-tech FIEs in 31 designated cities.This now is available to high-tech FIEs across China which is greatly encouraging foreign investors for foreign direct investment

3. Relaxation of restrictions: more incentives

New measures removing foreign shareholding restrictions on certain manufacturing and service FIEs, is greatly encouraging foreign investors to set up regional headquarters outside Beijing and Shanghai. Also giving privilege to acquire domestic companies having proper business registration certificate; which is giving IPRs better protection.

Work permits

Foreigners have for a while been experiencing difficulties in obtaining work permits in China. By the end of 2017, this should be far less of a problem. Qualification requirements for work permit applicants have been made lighter, application procedures simpler and work permits are expected to cover a longer period.

The benefits usually China gives to foreign investors are not given in the form of grants.China gives most benefits in the form of  tax incentives including value added tax, customs and income tax benefits. The country greatly stresses foreign investors to invest in Special Economic Zone (SEZ)

Tax incentives

• Corporate tax of 15%.
• A huge benefit of “2 + 3 years” which means an exemption from tax for the first two years and tax at the rate of 12.5% for the next three years.
• For projects including in basic infrastructure, environment protection and energy there is a “3+3” years tax holiday.
• With certainguidelines, companiesinvesting in integrated circuits production usually gets a “5+5” years tax holiday.
• The 15% preferential tax rate also is granted to qualified high-tech service enterprises in 21 specified citiesand a 50% or 75% “super deduction” for qualifying R&D expenditure.

To know more about the investment opportunities in China please connect with our company.Our decades of experience, dedication, commitment , transparency and has helped us to provide quality services to our clients around the world.