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How To Benefit From The Chinese Reform Of Investment Regulations?

The terminology "Doing Business" puts some emphasis on the level of difficulty a local entrepreneur will endure to open and run an SME "small or medium-sized enterprise", while complying with relevant regulations.

The regulations that are having straight effects on the various areas of a business life cycle, from the first stages till its realization for instance: "dealing with property registration, getting credit, trading across borders, recruitment and labor regulations, etc.

Doing business besides regulations might encounter different limitations:

 Geo-localization and proximity to large markets.

 Infrastructure and services

 Safety

 Transparency and efficiency

 …, etc.

And all the discussed factors above are not only related to one country but to some extent are the scales we will base our analysis on in this comparative study of Doing Business in China.

Globally, China stands at 127 in the ranking of 190 economies on the ease of starting a business.

distance to frontier score

Figure1: How China and comparator economies rank on the ease of starting a business

This comparative study provides some critical information that will enlighten investors and help them assess how easy for an entrepreneur to start a business in China and be prepared for it

In china bureaucracy and strict regulations were and still represents the main issue when it comes to investing in China. However this situation has known many changes in the recent years thanks to its openness to the world. The Giant China has opened its door for investments and likewise other economies around the world tried to attract more investments by easing their market access process.

Has China worked on improving its process starting a business and made it easier?

The answer to this question is on the table below

db year

In the following paragraphs we will be describing in details the steps you will have to go through to establish a company in china along with the associated time and cost, as an example we will take a first tier city (Shanghai) and we will take a company with a "Limited Liability Company" legal form; the minimum Paid-in capital requirement is going to be 0 CNY; A 10 times GNI per capita Start-up capital.

As mentioned earlier China has a rich set of specific procedures that embodies the bureaucratic and legal steps that an entrepreneur must complete to incorporate and register a new firm.

i. Obtain a notice of pre-approval of the company name

a) This will take a day to be completed

b) Free of charge

ii. Apply for registration certification "business license of enterprise legal person" with SAIC, the organization code certificate issued by the Quality and Technology Supervision Bureau and registration for both state and local tax with the tax bureau.

There are few steps embedded in this stage that we will disclose shortly

 Business License –Get a registration certificate-.

 Organization code certificate with the quality and technology supervision Bureau.

 Registration with local and state taxes

a) This will take around 11 days to be finalized.

b) Free of charge

iii. Obtain the approval to make a company seal from the police department

a) This will take a day to be completed

b) Free of charge

iv. Make a company seal


To make the company seal, the company shall designate a company possessing a Shanghai Special Industry Permit (company seal carving) (《上海市特种行业许可证》公章刻制业). This process costs CNY 300-1,000 depending on the design and the quality.

a) This will take a day to be completed

b) 300 to 1000CNY

v. Open a bank account of the company

a) This will take a day to be completed

b) Free of charge

vi. Apply for the authorization to print or purchase financial invoices/receipts

a) This will take around 10 days to be completed

b) Free of charge

vii. Purchase Uniform invoices

a) This will take a day to be completed

b) Free of charge

viii. File for recruitment registration with local career service center

a) This will take a day to be completed

b) Free of charge

ix. Register with Social Welfare Insurance Center

a) This will take a day to be completed (concurrently with the previous procedure)

b) Free of charge

Starting a Business in China can be less of a hassle if you are aware of the regulations, have some background on the bureaucracy or ideally if you hire or ask an agency to help with the establishment of the company whether you are an overseas or local investor getting some assistance from experts is always the best option and fastest way to get things done


Globalization does affect China in a way. However China is taking action to maintain the economic growth such as laying out some policies related to the foreign investment to boost the national economy. This CEO survey report comes from PWC which comprehensively reveals that China could be the main stage for market entry. Moreover CEOs emphasize the recent problem about talent gap which can be solved by man and machine work together and it could be a long way to go. Yet finding an agency can be one of the best ways to narrow the talent gap. Talent Spot can help you with your HR solutions in China as well as Asia Pacific Region includes Singapore, Hong Kong, Taiwan, Japan, Korea, Thailand and Vietnam.

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