Chinese Company Formation

China the biggest business oppertunity of the millinium.  

The Country
The People’s Republic of China (PRC), commonly known as China, is the largest country in East Asia and the third or fourth largest country in the world. With a population of over 1.3 billion, it is the most populous country in the world.

The Communist Party of China has led china under a single-party system since the state’s establishment in 1949. China is involved in a long-running dispute over the political status of Taiwan. The CPC’s rival during the Chinese Civil War, the Kuomintang (KMT), fled to Taiwan and surrounding islands after its civil war defeat in 1949, claiming legitimacy over China, Mongolia, and Tuva while it was the ruling power of the Republic of China (ROC). The term “Mainland China” is often used to denote the areas under PRC rule, but usually excludes its two Special Administrative Regions: Hong Kong and Macau.

Because of its vast population, rapidly growing economy, and large research and development investments, China is considered an “emerging superpower”. It has the world’s fourth largest economy (second largest in terms of purchasing power parity). China is also a permanent member of the United Nations Security Council and Asia-Pacific Economic Cooperation. Since 1978, China’s market-based economic reforms have brought the poverty rate down from 53% in 1981 to 8% by 2001. However, China is now faced with a number of other economic problems, including an aging population, an increasing rural-urban income gap, and rapid environmental degradation.

China plays a major role in international trade. The country is the world’s largest consumer of steel and concrete, using, respectively, a third and over a half of the world’s supply of each. Counting all products, China is the third largest importer and the second largest exporter in the world.

China Economy
Beginning in late 1978, the Chinese leadership has been reforming the economy from a Soviet-style centrally planned economy to a more market-oriented economy that is still within a rigid political framework under Party control. The reforms replaced collectivization of Chinese agriculture with privatization of farmlands, increased the responsibility of local authorities and industry managers, allowed a wide variety of small-scale enterprises to flourish, and promoted foreign investment. Price controls were also relaxed. These changes resulted in mainland China’s shift from a planned economy to a mixed economy.

The government emphasizes personal income and consumption by introducing new management systems to help increase productivity. The government also focuses on foreign trade as a major vehicle for economic growth, which led to five Special Economic Zones (SEZ: Shenzhen, Zhuhai, Shantou, Xiamen, Hainan) where investment laws are relaxed so as to attract foreign capital. Since the 1990s, SEZs and similar concepts have been expanded to major Chinese cities, including Shanghai and Beijing. The result has been a six-fold increase of GDP since 1978.

Chinese economic development is among the fastest in the world and has been growing at an average annual GDP rate of 9.4% for the past twenty-five years.

Mainland China has a reputation of being a low-cost manufacturer, which caused notable disputes in global markets. This is largely because Chinese corporations can produce many products far more cheaply than other parts of Asia or Latin America and because expensive products produced in developed countries like the United States are in large part uncompetitive compared to European or Asian goods. Another factor is the unfavorable exchange rate between the Chinese yuan and the United States dollar to which it was pegged.

On July 21, 2005, the People’s Bank of China announced that it would move to a floating peg, allowing its currency to move against the United States dollar by 0.5% (effective 18 May 2007, which was earlier 0.3%) a day, while 3% a day against other currencies. Many high-tech American companies have difficulty exporting to China because of U.S. federal government restrictions, which exacerbated the trade gap between the PRC and the US, widespread software piracy and illegal copying of intellectual property (a major US export), and perceived low quality of US goods. At the end of 2005, the PRC became the fourth-largest economy in the world by exchange rate and the second-largest in the world after the United States by purchasing power parity at US$8,158 trillion. But with its large population, this still gives an average GDP per person of only an estimated US$8,000 (2006).

Today, only ten percent of the Chinese population is below the poverty line. 90.9% of the population is relatively literate, compared to 20% in 1950. There is a large wealth disparity between the coastal regions and the remainder of the country. To counter this potentially destabilizing problem, the government has initiated the China Western Development strategy (2000), the Revitalize Northeast China initiative (2003), and the Rise of Central China policy (2004), which are all aimed at helping the interior of China to catch up.

As of 2006, approximately 70% of China’s growth came from the private sector. The private sector was dominated by about 200 large enterprises concentrated mostly in utilities, heavy industries, and energy resources. China is undergoing major reforms in its financial sector, which has been plagued by nonperforming loans made in the 1980s and early 1990s to inefficient state-owned enterprises. The government has spent five years and more than US$400 billion cleaning bad loans off the books of the big four state-owned banks, helping prepare them to become shareholder corporations. By the end of 2006, China had restructured three of its four largest banks and listed them publicly. China’s largest bank, the Industrial and Commercial Bank of China (ICBC) in October 2006 raised US$21.6 billion in the world’s largest initial public offering (IPO) in history. As of 2008, ICBC is now the world’s largest bank in market value.

Chinese Legal system
Chinese law is one of the oldest legal traditions in the world. The system is a mixed German Civil law and Soviet-influenced socialist law. Law in the People’s Republic of China is currently undergoing gradual reform, as many elements inside and outside the country emphasize the need to strengthen the rule of law in China, and international trade and globalization spur transformations in various areas of Chinese domestic law.

Taxation
A new Corporate Income Tax Law was passed in january 2008 provide an easy to understand taxation from a western point of view. The corporate income tax is 25%. There is some small business rate for low profit companies and new technology  enterprises. Contact a local tax accountant for tax advise for you business.

Security and Confidentiality
China is protecting foreign owned companies to protect their reputation. It is important to have a good local lawyer and accountant.

Type of Offshore Companies in China
Joint Stock Limited Liability Company / Stock Ltd. Co.
Limited Liabilty Company  / Ltd. Liability Co.
Shareholder Cooperative 
Foreign Cooporate Company
Private company

Complete Company Package Includes:

- Name Check
- Founding of Company
- Registration with Necessary Authorities
- Certificate of Incorporation
- Memorandum of Association 
- Registered Address
- Power of Attorney
- Nominee Director
- Company-Kit
- Yearly Company Fees
- Board Resolution Authorising the Opening of a USD Bank Account
- Register of Directors
- Register of Members
- Local Bank Account with USD and Local Currency 

Package Cost: 12,749€

If you wish to order this Offshore Company Package you can use our online order form. If you have more questions regarding a Dubai Offshore Company you can contact us at +44(0)208-114-6188 or use our contact form.