Below is a detailed summary of the bureaucratic and legal hurdles

faced by entrepreneurs wishing to incorporate and register a new

firm in China. It examines the procedures, time and cost involved
in launching a commercial or industrial firm with up to 50
employees and start-up capital of 10 times the economy's per-
capita gross national income.
This information was collected as part of the Doing
Business project, which measures and compares regulations
relevant to the life cycle of a small- to medium-sized domestic
business in 185 economies. The most recent round of data
collection was completed in June 2012.
Compare China to 184 other economies.
STANDARDIZED COMPANY
Legal Form: Limited Liability Company
Paid in Minimum Capital Requirement: CNY 30,000
City: Shanghai
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No. Procedure Time to Complete Associated Costs
1
Obtain a notice of pre-approval of the company name

The applicant picks up the application for company name pre-approval from the local Administration
of Industry and Commerce (AIC), or otherwise, downloads the form from AICs Web site. The
applicant can be the representative designated by all the shareholders or the agent entrusted by all the
shareholders. The completed application form shall be signed by all shareholders of the company.
The application form together with the business licences or other registration certificates (if the
shareholders are companies or other eligible entities) and the photocopy of the identity card of the
individual shareholders shall be filed with the AIC. Effective July 1, 2004, enterprise name
registration must follow the amended State Administration of Industry and Commerce (SAIC) rules
(that is, the new Enterprise Name Registration Administration Implementing Measures, or Qi ye ming
cheng deng ji guan li shi shi ban fa). According to the new registration rules, if the applicant goes
directly to the AIC, a proposed company name is approved or rejected on the spot. This is newly 1 day no charge
No. Procedure Time to Complete Associated Costs
regulated by Article 24 of the aforementioned measures and is implemented in practice. However if
the application is made through mail, fax, email, etc, the proposed company name will be approved or
rejected within 15 days.
2
Open a preliminary bank account; deposit fund in the account and obtain the certificate of
deposit

The Company Law was modified on October 27, 2005, and became effective on January 1, 2006.

Article 26 lowers the minimum capital requirement to CNY 30,000. According to this article, the
shareholders, after paying the required initial capital contribution, may pay off their remaining capital
contributions, if any, within 2 years after establishing the company. Note that the required initial
capital contribution is at least 20% of the proposed companys registered capital and shall not be
lower than the legal requirement for the registered capital for particular industries.

Article 27 provides the form of the capital contribution. According to this article, if the initial
capital contribution is in cash, the shareholders must (a) open a preliminary bank account after
obtaining preapproval of the company name; and (b) deposit the initial capital contribution into the
bank account. If the initial capital contribution is in nonmonetary assets, the shareholder must transfer
the property title of the assets to the company and the value of such assets must be appraised. The
initial capital contribution must be verified by legally established verification institutes. The revised
Company Law enables shareholders to contribute up to 70% of the registered capital of a limited
liability corporation in nonmonetary assets that can be monetarily valued and legally transferred. 1 day no charge
3
Obtain capital verification report from an auditing firm

An auditing firm has to prepare a report that verifies the company capital as past of the documents
necessary for registration. 2 days CNY 350
4
Apply for registration certification "business license of enterprise legal person" with SAIC, the
organization code certificate issued by the Quality and Technology Supervision Bureau and
registrationfor both state and local tax with the tax bureau

Since July 2010, it has been possible to use the "parallel application and review" process in most
districts of Shanghai. The entrepreneur can submit the documents for business license, certificate for
quality and technology and state and local tax at the same time at one window. All the application
forms can be downloaded from SAICs website. The agent at the window will scan all the documents
and send them electronically to all relevant agencies. The business license is approved first and the
two other agencies can give their approval immediately after. They are notified online once the 11 calendar days
no charge (Fee exempted for micro and
small size companies from 2012 to 2014
- otherwise 0.08% of registered capital)
No. Procedure Time to Complete Associated Costs
business license has been approved.

BUSINESS LICENSE:
To obtain registration certification, the company must file a completed application form along with
the following documents:
Notice of approval of company name
Lease or other proof of company office
Capital verification certificate or appraisal report
Articles of association, executed by each shareholder
Representation authorization
Identity cards of shareholders and identification documents of officers
Appointment documents and identification documents (certifying name and address) of the
directors, supervisors, and officers
Appointment documents and identification documents of the companys legal representative
If the initial contribution is in nonmonetary assets, the document certifying transfer of the property
title of such assets
Other documents as required by the authorities

According to the new administrative rules, application forms may be downloaded from the local
government authorities Web sites. Statutory time limits were introduced for acceptance of
application documents and for registration decisionmaking, which differs according to the form of
application. Documentation requirements for company registration were standardized. The Registry is
now required to publicly display them.

According to Article 52, if an application is filed (by letter, telegraph, telex, fax, email, or electronic
data exchange), the Company Registry must, within 5 days of receiving the relevant application
documents and materials, decide whether to accept the application. If the application documents and
materials are incomplete or do not meet the statutory requirements, the Registry must inform the
applicant, within 5 days, of all contents subject to supplementation and correction.
According to Article 54, if the organ in charge of company registration must verify the application
documents and materials, it shall decide whether to approve the registration within 15 days of
acceptance. In other cases, the organ must decide whether to approve the registration on the spot or
within 15 days of acceptance.
According to Article 55, if the organ decides to approve a company registration, it shall issue a
notice on approval for establishment registration and inform the applicant to collect its business
license within 10 days.

The Notice on the Exemption of Some Administrative Fees for Small and Micro Enterprises (CZ
[2011] No.104), co-issued by the Ministry of Finance and the National Development and Reform
Commission, exempts micro and small size companies from paying several administrative fees
No. Procedure Time to Complete Associated Costs
between January 1, 2012 and December 31, 2014. This includes the business registration fee (0.08%
of the registered capital).

ORGANIZATION CODE CERTIFICATE WITH THE QUALITY AND TECHNOLOGY
SUPERVISION BUREAU:
The company must apply for the organization code certificate within 30 days of obtaining the
business license, by filing a completed application form with the Shanghai Organization Code
Management Center (a branch of the Quality and Technology Supervision Bureau) along with the
following documents:
Business license (original and one copy)
Identity card of the legal representative (one copy)

The Notice on the Exemption of Some Administrative Fees for Small and Micro Enterprises (CZ
[2011] No.104), co-issued by the Ministry of Finance and the National Development and Reform
Commission, exempts micro and small size companies from paying several administrative fees
between January 1, 2012 and December 31, 2014. The production cost of CNY 18 for Organization
Code Certificate is exempted for a micro or a small size company. The remaining amount CNY 102
still needs to be paid to Quality and Technology Supervision Bureau for the technical service and
production cost of IC card.

REGISTRATION WITH LOCAL AND STATE TAXES:
The tax registration procedures have been simplified since 2004 with the implementation of the
Administration Measures of Tax Registration, issued by the State Taxation Bureau. Two separate
taxation authorities still exist (the state taxation bureau and local taxation bureau). However,
company founders are required to file tax registration only once, to either of these two authorities.
The statutory time limit is 30 days from the date of receiving the registration application.

The company must file the tax registration form and the initial tax reporting forms. Together with
those forms, the company submits for review the following documents:
Business license duplicate (original and one copy)
Organization code certificate (original and one copy)
Identification card of the legal representative (original and one copy)
Identification card of the taxation personnel (original and one copy)
Company seal and financial seal
Office lease agreement and receipt(s) for rent paid
Articles of association (original and one copy) and bank-issued account-opening certificate (original
and one copy)
Capital verification report
Photocopy of property ownership certificate
Land use right certificate
No. Procedure Time to Complete Associated Costs
Commitment letter regarding the authenticity of the documents submitted

The Notice on the Exemption of Some Administrative Fees for Small and Micro Enterprises (CZ
[2011] No.104), co-issued by the Ministry of Finance and the National Development and Reform
Commission, exempts micro and small size companies from paying several administrative fees
between January 1, 2012 and December 31, 2014.
5
Obtain the approval to make a company seal from the police department

If all the shareholders are individual investors, the registration file will include the duplicate of the
business license (the original and one copy) and the legal representatives identification card. If
registration is approved, a notice to make the company seal will be issued to the company. 1 day no charge
6
Make a company seal

To make the company seal, the company shall designate a company possessing a Shanghai Special
Industry Permit (company seal carving) (. This process
costs CNY 70300, depending on the design and the quality. 1 day CNY 300
7
Pay the fee for the organization code certificate issued by the Quality and Technology
Supervision Bureau at the time of pick-up

Prior to pick up the organization code certificate issued by the Quality and Technology Supervision
Bureau and pay the fees, the entrepreneur had to obtain the company seal. 1 day
CNY 102 (Production cost of CNY 18
for Organization Code Certificate is
exempted for micro and small size
companies from 2012 to 2014)
8
Register with the local statistics bureau

Within 30 days of obtaining the business license, the company must apply for statistics registration by
submitting to the local statistics bureau a completed statistics registration form along with the
following documents:

Business license (one copy)
Organization code certificate (one copy) 1 day no charge
* 9
Open a formal bank account of the company and transfer the registered capital to the account

The procedures and required documents for opening a company bank account and transferring the
registered capital to it may vary depending on each banks practice.
1 day, simultaneous
with previous
procedure no charge
No. Procedure Time to Complete Associated Costs
10
Apply for the authorization to print or purchase financial invoices/receipts

After registering for state or local taxes and obtaining the tax registration certificate, the company
must apply separately to the relevant authorities (that is, the state and local taxation offices) for
approval to purchase and issue financial invoices/receipts. The taxation authority will issue the
invoice purchasing book, if it agrees to grant the company such qualification, upon reviewing the
following submitted documents:

Tax registration certificate (one copy).
Identity card of taxation personnel (one copy).
Application forms.
Models of invoice seal. 10 days
no charge (Fee exempted for micro and
small size companies from 2012 to
2014)
11
Purchase uniform invoices

The company must obtain and submit an application form to purchase uniform invoices
(). The form and the authorization book (from Procedure 10) must be submitted
to the Tax Office.

The VAT and ordinary invoices are published by the tax authority for antiforgery reasons (with few
exceptions). Taxpayers buy VAT and ordinary invoices from the tax authority.

The Notice on the Exemption of Some Administrative Fees for Small and Micro Enterprises (CZ
[2011] No.104), co-issued by the Ministry of Finance and the National Development and Reform
Commission, exempts micro and small size companies from paying several administrative fees
between January 1, 2012 and December 31, 2014. 1 day
no charge (Fee exempted for micro and
small size companies from 2012 to 2014
- otherwise CNY 1.05-1.67 per book of
invoices)
12
File for recruitment registration with local career service center

Within 30 days of recruiting employees, a new company must register with the local career service
center, sponsored by the local government. Relevant application forms which can be electronically
downloaded or obtained from the local career service center shall be filled and submitted. 1 day no charge
*
13
Register with Social Welfare Insurance Center

Within 30 days of establishment, the company must register for the payment of employee social
insurance with the local social insurance office by submitting a completed social insurance
registration form and the following documents:

1 day, simultaneous
with previous
procedure no charge
No. Procedure Time to Complete Associated Costs
Company seal
Duplicate of business license (original and one copy)
Organization code certificate (original and one copy)

After all these documents have been verified, the authorities will issue a notice to open a social
insurance account for the company. The company must then apply to open a special account at the
designated bank. The local social insurance office will issue the social insurance registration card to
the company on receiving bank notification of account opening.

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