Starting a business

Before you begin

Why start a business in Shenzhen?

Shenzhen is one of China’s most business-friendly cities, offering:

• Innovation ecosystem: Home to tech giants and startups
• Government support: Various incentives and support programs
• Access to markets: Gateway to Greater Bay Area and mainland China
• Talent pool: Skilled workforce and international talent
• Infrastructure: Modern facilities and excellent connectivity
• Hong Kong proximity: Easy access to Hong Kong markets

Prerequisites

Before starting the registration process, you’ll need:

• Business idea and plan: Clear concept and business model
• Capital: Minimum registered capital requirements vary by business type
• Business address: Registered office address in Shenzhen
• Legal structure decision: Type of company entity (WFOE, representative office, etc.)
• Business scope: Clear definition of business activities
• Compliance understanding: Knowledge of relevant regulations

Estimated time and cost

• Registration time: 1-3 months (depending on business type and complexity)
• Initial costs: Varies significantly by business type and structure
• Ongoing compliance: Annual reporting, tax filing, license renewals

Business structure options

WFOE (Wholly Foreign-Owned Enterprise - 外商独资企业)

Characteristics:

• 100% foreign ownership allowed
• Can conduct business activities in China
• Can hire employees directly
• Can invoice Chinese clients
• Can open Chinese bank accounts
• Can apply for work permits for foreign employees

Best for: Most foreign businesses wanting to operate in China

Requirements:

• Minimum registered capital (varies by industry)
• Registered office address
• Business scope definition
• Legal representative (can be foreigner)

Representative Office (代表处)

Characteristics:

• Limited to liaison activities
• Cannot conduct direct business
• Cannot invoice or receive payments
• Cannot hire employees directly (must use service companies)
• Simpler registration process

Best for: Market research, liaison activities, not conducting business

Limitations:

• Cannot generate revenue in China
• Limited business activities
• May not be suitable for most businesses

Joint Venture (合资企业)

Characteristics:

• Partnership with Chinese company
• Shared ownership and control
• Can access certain restricted industries
• More complex structure

Best for: Industries requiring Chinese partnership, specific strategic partnerships

Partnership Enterprise (合伙企业)

Characteristics:

• Partnership structure
• Less common for foreigners
• Different tax treatment

Best for: Specific partnership arrangements

Registration process

Step 1: Choose business structure and name

Business structure:

• Decide on WFOE, Representative Office, or other structure
• Consider your business activities and goals
• Consult with professionals if unsure

Company name:

• Choose a company name (in Chinese and optionally English)
• Name must be unique and comply with regulations
• Cannot conflict with existing registered names
• May need to provide multiple options (backup names)

Name requirements:

• Must include company type designation (有限公司 for WFOE)
• Cannot use restricted words without approval
• Must be appropriate and not misleading

Step 2: Prepare required documents

Basic documents needed:

• Passport copies (legal representative and shareholders)
• Business plan or feasibility study
• Articles of Association
• Proof of registered capital
• Office lease agreement or property certificate
• Business scope description

Additional documents (may be required):

• Parent company documents (if subsidiary)
• Bank reference letters
• Professional qualifications (for certain industries)
• Environmental impact assessment (for certain industries)
• Industry-specific licenses or approvals

Step 3: Register with authorities

Key registration steps:

1. Company Name Pre-approval (名称预先核准)

   • Submit name application
   • Wait for approval (typically 1-3 business days)

2. Business License Application (营业执照申请)

   • Submit registration application
   • Provide all required documents
   • Pay registration fees
   • Wait for approval (typically 10-20 business days)

3. Tax Registration (税务登记)

   • Register with tax bureau
   • Obtain tax identification number
   • Set up tax filing system

4. Customs Registration (海关登记) - If importing/exporting

   • Register with customs
   • Obtain customs registration certificate

5. Statistics Registration (统计登记)

   • Register with statistics bureau
   • Required for annual reporting

6. Social Insurance Registration (社保登记)

   • Register for social insurance
   • Required if hiring employees

Processing timeline:

• Simple cases: 1-2 months
• Complex cases: 2-3 months or longer
• Depends on business type, industry, and document completeness

Step 4: Open bank account

Requirements:

• Business license (营业执照)
• Tax registration certificate
• Legal representative’s ID
• Company seal (公章)
• Initial capital deposit

Process:

• Choose a bank (Bank of China, ICBC, etc.)
• Submit application with documents
• Make initial capital deposit
• Receive business bank account

Note: Some banks may require additional documents or have specific requirements for foreign-owned companies.

Step 5: Obtain necessary licenses

Industry-specific licenses:

• Some industries require additional licenses or permits
• Examples: Food service, education, healthcare, finance
• Check requirements for your specific industry

Common licenses:

• Food Service License (餐饮许可证) - For restaurants
• Education License (教育许可证) - For schools/training
• Import/Export License (进出口许可证) - For trading
• ICP License (ICP许可证) - For internet businesses

Tax obligations

Tax registration

Required registrations:

• Corporate Income Tax (企业所得税)
• Value Added Tax (VAT - 增值税) - If applicable
• Business Tax (营业税) - For certain services
• Individual Income Tax - For employees

Tax identification:

• Obtain tax identification number
• Set up tax filing system
• Understand filing deadlines

Corporate income tax

Standard rate: 25% (as of January 2025)

• Standard corporate income tax rate
• May vary for certain industries or regions
• Some incentives available for qualifying businesses

Small and micro enterprises:

• Reduced rates may apply
• Check current incentives and qualifications

Value Added Tax (VAT)

VAT rates:

• General VAT rate: 13% (as of January 2025)
• Reduced rates: 9%, 6% (depending on industry)
• Some services: 6%
• Exports: Typically 0% (with refund)

VAT registration:

• Required if annual revenue exceeds threshold
• Threshold varies (check current regulations)
• Can register voluntarily if below threshold

Tax filing requirements

Monthly filings:

• VAT returns (if registered)
• Employee tax withholding
• Social insurance contributions

Quarterly filings:

• Corporate income tax (preliminary)
• Other tax returns as applicable

Annual filings:

• Annual corporate income tax return
• Annual financial statements
• Annual audit (for certain companies)

Ongoing compliance

Annual requirements

Annual inspection:

• Annual business license inspection
• Submit annual reports
• Update company information if changed

Financial reporting:

• Annual financial statements
• Annual audit (for certain companies)
• Tax filings

License renewals:

• Renew business licenses as required
• Renew industry-specific licenses
• Update registrations

Monthly/quarterly requirements

Tax filings:

• File tax returns on schedule
• Pay taxes on time
• Maintain proper accounting records

Employee compliance:

• Social insurance contributions
• Tax withholding for employees
• Work permit management (for foreign employees)

Record keeping

Required records:

• Accounting books and records
• Invoices and receipts
• Contracts and agreements
• Employee records
• Tax filings and payments

Retention period:

• Typically 10-15 years for tax-related documents
• Verify specific requirements for your business

Common issues and solutions

Issue: Registration process is complex

Solution:

• Use professional registration agents
• Consult with legal and tax professionals
• Allow sufficient time for process
• Prepare all documents in advance
• Consider using service companies for initial setup

Issue: Minimum capital requirements

Solution:

• Understand capital requirements for your industry
• Some industries have higher requirements
• Capital can often be paid in installments
• Consult with professionals about options
• Consider alternative structures if capital is issue

Issue: Finding suitable office address

Solution:

• Use virtual office services (for some business types)
• Co-working spaces may be acceptable
• Verify address requirements with registration authority
• Some districts have specific requirements
• Consider serviced offices

Issue: Understanding tax obligations

Solution:

• Hire qualified accountant or tax advisor
• Attend tax training or workshops
• Use accounting software
• Regular consultation with tax professionals
• Join business associations for support

Issue: Language barriers

Solution:

• Use bilingual registration agents
• Hire bilingual staff or assistants
• Use translation services for documents
• Work with professionals who speak English
• Learn basic business Chinese

Tips and best practices

Before starting

• Research thoroughly: Understand market, regulations, and requirements
• Consult professionals: Legal, tax, and business advisors
• Prepare business plan: Clear vision and financial projections
• Secure funding: Ensure adequate capital for registration and operations
• Choose right structure: Select appropriate business entity type

During registration

• Use professional help: Registration agents can streamline process
• Be patient: Registration takes time, plan accordingly
• Prepare documents carefully: Incomplete documents cause delays
• Follow up regularly: Check status of applications
• Keep copies: Maintain copies of all submitted documents

After registration

• Set up accounting system: Proper bookkeeping from start
• Understand tax obligations: Know filing deadlines and requirements
• Maintain compliance: Stay current with all requirements
• Build relationships: Network with other businesses and professionals
• Seek ongoing support: Join business associations, use advisors

Long-term success

• Stay compliant: Regular compliance checks and updates
• Monitor changes: Keep informed about regulatory changes
• Maintain records: Proper documentation and record keeping
• Plan for growth: Consider future expansion and changes
• Build local connections: Relationships important in Chinese business

Costs and fees

Registration costs

Government fees:

• Business license registration: Varies (typically RMB 0-1,000, as of January 2025)
• Name approval: Usually free or minimal fee
• Tax registration: Usually free
• Other registrations: Varies by type

Professional services:

• Registration agent fees: RMB 5,000-20,000+ (varies by complexity)
• Legal consultation: RMB 500-2,000+ per hour
• Accounting setup: RMB 2,000-10,000+
• Translation services: Varies

Total initial costs:

• Simple registration: RMB 10,000-30,000+
• Complex registration: RMB 30,000-100,000+
• Varies significantly by business type and services used

Ongoing costs

Annual costs:

• Annual inspection fees: Minimal
• Accounting services: RMB 12,000-50,000+ per year
• Tax filing services: Included in accounting or separate
• License renewals: Varies

Monthly costs:

• Office rent: Varies significantly
• Utilities: RMB 1,000-5,000+ per month
• Employee costs: Salary + social insurance
• Professional services: As needed

Resources

Government resources

• [Shenzhen Administration for Market Regulation]([VERIFICATION NEEDED - Official website URL])
• [Shenzhen Tax Bureau]([VERIFICATION NEEDED - Official website URL])
• [Shenzhen Investment Promotion Office]([VERIFICATION NEEDED - Official website URL])

Professional services

• Business registration agents
• Legal firms specializing in foreign investment
• Accounting firms with foreign business experience
• Tax consultants
• Professional help guide - For finding service providers

Business associations

• Foreign Chambers of Commerce in Shenzhen
• Industry-specific associations
• Entrepreneur networks
• Business incubators and accelerators

Related articles

• A bank account - Needed for business operations
• Professional help - Legal, tax, and business services
• Finding a job - If considering employment instead

Need help?

Legal assistance

Where to find help:

• Your country's consulate in Guangzhou
• International Chambers of Commerce
• Professional legal services specializing in expatriate issues

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