Beginning with 2016, there was an increase in the demand for trucks in China and a total of 338,000 big trucks were sold, meaning a 14% increase compared to the truck sales the year before. This brought up an expectation of the sale of around 618,000 trucks by the end of 2016. The increase in truck sales is expected to continue from 2017 up to 2020. Deciding to open a truck company in China can be a good business option. Setting up a truck company in China is the same as opening other types of businesses in this country. The process is also governed by the Company Law of the People’s Republic of China. Our lawyers in China are familiar with the process laid down under the Company Law.
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Types of truck companies in China
There are basically six types of truck companies that can be opened in China. The first kind is the wholly-owned foreign enterprise. This company is incorporated under the laws of other countries, but is established in China and there is no need for Chinese citizens to have a direct participation in the company.
The second type of company is the joint venture that is a special form of business undertaking which involves the participation of a mainland Chinese party and a foreign entity.
The third type is the representative office. This type is not an actual legal entity, but it is established only for the purpose of representing its foreign principal in certain transactions in China.
The fourth kind is the state owned enterprise. These are businesses wherein the majority shareholder is the government. They contribute a big part to China’s economy.
The fifth type is the private enterprise. This is the most common type of company in China and is owned by private individuals without any government participation.
The sixth kind is known as the individually owned enterprise. This is the simplest form of company in China and is suitable for small businesses. Our attorneys in China can assist you in forming the type of company you prefer.
Capital requirement for truck companies in China
The capital requirement will depend on the type of the truck company established in China. Multi shareholder companies require a minimum of 30,000 RMB, while single shareholder companies must have a minimum capital of 100,000 RMB. For wholly-owned foreign enterprises, the capital requirement will vary. The one to determine the minimum capital are the Chinese regulators. They will take into consideration the type of business and its location to come up with a capital requirement. Our law firm in China has experts that can give you legal advice with regard to complying with the capital requirement.
Opening a truck company in China carries with it a lot of legal requirements. Just get in touch with our Chinese lawyers and have them assist you with the process.