The financial services industry in China has witnessed a rapid growth over the last decade. Sales channels, talent pools and product offerings are investment opportunities provided to foreign businessmen. You can benefit from the industry’s attractive prospects by creating a financial company in China. The local authorities have recently adopted new rules and regulations regarding the process of registering a financial company in China. A professional insight into the legislation concerning financial companies can be offered to you by our attorneys in China.
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Steps for creating a financial company in China
Foreign investors looking to start a financial company in China may stumble upon a few bureaucratic burdens. Although it is technically possible to create a financial company in China on your own, it is highly recommendable to hire a Chinese law firm to ease the process. You can decide on a business structure, be represented while you are not in China and have your company registered on your behalf with the help of a consultant. There are several steps to fulfill in order to create a financial company in China:
• Choose a type of company to register – the representative offices (RO), joint ventures (JV) and wholly owned foreign enterprises are the most common legal entities. Our lawyers in China can check the list of restricted industries and the catalogue of encouraged foreign businesses and ensure you choose the right structure, according to your business purpose;
• Prepare the company documents – articles of association, certificate of incorporation, identity documents from each investor (certified by a Chinese embassy or consulate overseas), the registered capital, eight possible names for the company, the Chinese office address – they are all necessary documents to get in order. If you create your financial company in China as a wholly owned foreign enterprise (WFOE), supplementary documents may be requested by the Chinese authorities.
• Apply for approval – two separate entities must approve your company in China: the Ministry of Commerce and the State Administration of Industry and Commerce. A further approval from the financial regulators has been recently added.
• Register the company and open a bank account – after receiving the approval, you have to register with the Chinese Administration for Industry and Commerce and obtain a business license within 30 days.
New rules for the registration of a financial company in China
The approval for creating a financial company in China can no longer be obtained directly from the local commerce authorities. This administrative measure has been adopted by the authorities in order to prevent illegal activities, such as illicit public fund raising for Chinese foundations, loan sharking schemes and fraud attempts against investors. If you need detailed information about the new procedures for registering a financial company, please feel free to contact our Chinese law firm.