China has always been known as a haven for small and medium-sized enterprises and a fertile ground for entrepreneurship. Mainland companies have been registered in Hong Kong, and IPO financing in Hong Kong has been very popular in recent years. Registering a company in Hong Kong has significant advantages, but there are also risks. How to understand the advantages and disadvantages of Hong Kong companies more accurately, make good use of the advantages of Hong Kong companies, and at the same time avoid the losses of Hong Kong companies? This article provides a detailed analysis for this for reference.
Why start a business in China?
1. The tax system in the Mainland is much more complicated than in China.
To set up a company in the Mainland, you need to apply for a national tax certificate at the National Tax Bureau certificate office, and then apply for a local tax certificate at the Regional Tax Bureau certificate office. business, it will be taxed regardless of profit or loss. In China, a year after a company is on the right track, it only has to pay the relevant taxes if it is profitable. According to World Bank calculations, China’s total tax rate, including corporate profit tax and labor tax charges, is only a maximum of 23 percent, while the mainland’s total tax rate is as high as 63.7 percent.
2. The procedure and time for completion of company registration in the two places are different.
Companies registered in China realize one-stop registration, and the registration procedure is simple and can be completed in at least 1 day. The China Enterprise Registry approves the establishment of up to 700 to 800 companies daily. On the other hand, the registration procedure on the mainland is complicated, and it takes almost half a month at the earliest to officially open a company after approval from industry and trade, taxation, etc.
3. Chinese companies are allowed to have no business, and shell companies are allowed to exist
Many companies have registered shell companies in China to promote their brands and use China’s popularity to create Chinese brands. For example, China’s clothing, toys, cultural publishing, and other industries have certain international competitive advantages.
For those of you who currently want to have a business in China without having to come to China, then you can register company in China by using the services of Smebrother.