Open Company in China: China Eases Company Registration Rules for Foreign Companies

Foreign-invested companies in China will see an easing of company registration requirements based on the principle of national treatment, according to according to Zhang Mao, head of China’s State Administration of Industry and Commerce (SAIC). He also clarified that those policies also apply to foreign businesses.

Based on the national treatment principle, foreign companies are entitled to the same policies as their Chinese counterparts enjoy, meaning, when the Chinese government eases the setting-up requirements for Chinese companies, foreign investors should receive the same treatment.

The reform of the company capital registration system includes the following areas:
*     Lowering the registered capital requirements for setting up a company; 
*     Replacing the current annual inspection system of enterprises with an annual reporting system; 
*     Relaxing business premise registration requirements for market players; 
*     Facilitating the establishment of an enterprise credit system; and 
*     Promoting the subscribed capital contribution registration system.

China will relax the thresholds of registered capital, the minimum registration capital of RMB30,000 for limited liability companies will be canceled, as well as the RMB100,000 minimum for single shareholder companies and the RMB5 million minimum for joint stock companies. Besides, the requirements for business premise registration will be simplified.

Moreover, measures will be taken to reduce the costs of business set-ups, and meanwhile, efforts will be made to build an integrity system whereby enterprises that violate the law will be put on a “blacklist” and be announced to the public.

The reform aims to lower market entry requirements while reinforcing the responsibility of market players. It is also part of the central government’s commitment to move away from the current “emphasizing approval while neglecting regulation” mode to “easier market access and reinforced supervision” mode.

The number of foreign companies newly established in China this year stood at 16,351 as of September 2013, representing a 9.29 percent decrease compared with the same period last year.


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