Do you want to see your business potential grow rapidly and thrust it into a multinational? One of the best methods of achieving this goal is registering it in an offshore jurisdiction with a bigger market, and that opens doors to global trade. One such offshore jurisdiction is China.
For about four decades, starting from 1979, China has been experiencing rapid growth, and since it does not have any sign of ebbing out, this is an excellent opportunity to jump in. Most companies, such as multinationals in the manufacturing niche, have managed to achieve huge growth after moving to China, and this is now your turn.
The first crucial requirement is China company incorporation. Then, you will need to get the post-registration operations correctly. In this post, we will highlight the main benefits to anticipate after China company formation. Finally, we will highlight the most important post-registration activities for your firm.
Benefits of Expanding Your Company to China
The most notable benefit of opening a company in China is access to the large Chinese market. The moment you open a company in China, it implies direct access to a large market of over 1.4 billion people. Indeed, it is a lot more because China has signed a long list of bilateral trade agreements with other countries in the Asia-Pacific region and across the globe. Other benefits include:
- Subtle tax regime.
- Reduced manufacturing costs.
- Educated and experienced staff.
- Well-developed infrastructure.
- Economic stability.
- Supportive regime.
Post Registration Process for Your Company
China company incorporation is only the first step in growing your company to China and the APAC region. Next, you will need to craft a good strategy and get it right in the following processes:
This is perhaps the most important post-registration process. It is the process of recording and analyzing financial information in a business to help you get the right position of a business.
Accounting is an important tool for decision-making, planning, and compliance for your Chinese company.
Unlike in most western jurisdictions that use the International Financial Reporting Standards (IFRS), China requires all companies registered under its jurisdiction to use the Chinese Accounting Standard (CAS), and it is crucial to ensure you get it right.
- Payroll Management
This is the process of administration of a business employee’s financial details. Payroll management in China has to strictly follow the labor laws, which dictate things such as minimum wages, withholding various taxes on staff wages, payment for overtime, and drawing of employees’ contracts.
Failing to follow all the laws on payroll management can attract serious penalties in China.
- Filing Tax Returns
Like other jurisdictions, your offshore company in China is required to pay all the relevant taxes. For example, you need to remit the right corporate taxes based on the nature of your company. The standard corporate tax in China is 25%, but your company might qualify for lower rates of 15% or 10% if it is in the encouraged areas or app development.
Finally, you will need to file reports of tax filing with the Chinese Tax Bureau.
One thing you need to appreciate about these additional duties is that they require expertise and can take a lot of time. If you opt to handle them alone, they can easily distract you from the core of the business, such as product development and marketing. The best method of handling these additional tasks is to work with an agency of experts. These professionals have a lot of experience, and you can count on them to hold your hand, telling you what works and what does not.