Country Trading Profiles China

Setting up a company | FDI in figures | Why you should choose to invest | Procedures relative to foreign investment | Finding assistance for further information

Setting up a company

Types of companies and capital (max/min)	Number of partners/shareholders and liability
Equity Joint Venture No minimum capital.	100% foreign owned company. Minimum one partner. Limied to the amount of contributions.
Co-operative joint ventures, CJV No minimum capital.	Minimum 2 partners. Limied to the amount of contributions.
Foreign investment joint stock company, JSC 5m Rmb, 30 Rmb if foreign capital	Minimum 2 partners. Each shareholder contributes the same amount to the share capital and is linked to the company by its share of the share capital.
Holding minimum de 30m USD	Minimum 1 partenaire. Each shareholder contributes the same amount to the share capital and is linked to the company by its share of the share capital.

Business setup procedures

Setting up a company	China	East Asia & Pacific
Procedures (number)	14.0	7.8
Time (days)	38.0	39.0

Source: Doing Business.

For further information: Consult Doing Business Website, to know about procedures to start a Business in China.
Registration and Operation of Enterprises in China
The competent organization: Ministry of Commerce

FDI in figures

Foreign Direct Investment	2008	2009	2010
FDI inward flow (millions USD)	108,312	95,000	105,735
FDI stock (millions USD)	378,083.0	473,083.0	578,818.0
Performance Index*, ranking on 141 economies	94	76	-
Potential Index**, ranking on 141 economies	30	-	-
Number of Greenfield investments***	1,515	1,143	-
FDI inwards (in % of GFCF****)	5.3	37.0	-
FDI stock (in % of GDP)	8.7	10.1	-

Source:

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk. *** Green field investments are a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. **** Gross fixed capital formation (GFCF) measures the value of additions to fixed assets purchased by business, government and households less disposals of fixed assets sold off or scrapped.

Why you should choose to invest China

Strong points: China has a rapidly expanding market, which was not overly affected by the financial crisis. With a strong potential, a wealth of employees and potential partners eager to learn and evolve, the country is a base for low cost production.
Weak points: A changing legal context, administrative complexity, the difficulty for foreigners to learn the way of conducting business, both culturally and in practice, a poor middle management level and a very high staff turnover are factors which are often crippling in market acquisition.
Government measures to motivate or restrict FDI: In the foreign investment guide published by the State Commission for Development and Reform in November 2007, the Chinese government made it known that investments in sectors or Chinese companies that already have "a relatively strong production capacity with advanced technologies 'will not be encouraged', while investments in high technology, production of equipment and new materials, and in the services sectors, as well as in the recycling economy, clean production, use of renewable energies and environmental protection, will be welcomed as they are sectors in which China needs foreign companies.
Bilateral investment conventions signed by China: China has signed bilateral agreements for investments with several countries.
To see the list of the countries, click here.
To see the conventions, click here.

Procedures relative to foreign investment

Freedom of establishment: Varies according to the sector. Necessity to submit its 'business plan' for prior approval to setting up.
Acquisition of holdings: The acquisition of majority interest in a local company is authorized in China according to the sectors.
Obligation to declare: The agency for promotion of foreign investments in the country facilitates getting information on authorizations necessary for setting up.
Competent organization for the declaration
Requests for specific authorizations: Necessity for all projects to submit a business plan subject to approval by competent authorities.

Finding assistance for further information

Investment aid agency: Invest in China
Other useful resources: The heading dedicated to business opportunities of the Chinese agency for international investors

COUNTRY TRADING PROFILES