The healthcare is a rapidly growing sector in China’s economy, estimated to reach one trillion dollars in 2020. Foreign investors can open a healthcare company in China in the area of pharmaceuticals, consumers’ health or medical products. In the last years, the Chinese government has implemented several healthcare reforms aimed at increasing capacity, extending basic medical services and attracting private participation in the sector. If you intend to open a healthcare company, our attorneys in China can help you develop a competitive investment strategy.
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Things to consider when starting a healthcare company in China
According to China’s Catalogue Guiding Foreign Investment in Industry, the healthcare system is a restricted sector. The Chinese legislation for foreign investments stipulates that foreign entities in healthcare services must have Chinese partners that hold 30% of the total equity. The most common types of companies set up in the healthcare sector are joint ventures (JV) and joint partnership medical institutions.
Two conditions must be met by these joint ventures: to have registered a share capital of at least 20 million RMB and not establish branches in China. Therefore, foreign businessmen who want to have a presence in multiple cities must start a joint venture for each entity. Opening a healthcare company in China is an onerous process in terms of obtaining approvals from the local authorities. Relying on the professional help of a Chinese law firm is highly recommendable in this situation.
It can apply on your behalf for the necessary approvals from the Ministry of Health and relevant local health bureaus, and commercial government agencies (the Ministry of Commerce, the National Development and Reform Commission and the State Administration of Industry and Commerce). Hiring employees in a healthcare company in China, especially clinicians, implies a very complex legal procedure. Our lawyers in China can assist you throughout the entire process of opening a company in the healthcare system.
Legal steps for opening a healthcare company in China
Once you decided to invest in the medical system in China, there are several things to do in order to open a healthcare company:
• Decide on the type of legal entity to register – since the healthcare is a restricted sector, it is advisable to turn to a team of solicitors in China for assistance;
• Gather all company documents: articles of association, list of partners, the registered capital;
• Obtain approval to do business with the above mentioned Chinese authorities;
• Register the company, obtain the special licenses necessary for every healthcare company and hire clinicians.
For a better understanding of the rules and regulations related to opening a healthcare company, don`t hesitate to contact our law firm in China.