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FAQs: How to start a business on the mainland

By Ren Xiaojin | China Daily Europe | Updated: 2017-09-01 09:18
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As a foreign national now living in China, I have a potential business idea that I think would benefit China. I've even shortlisted potential investors. What do I need to do next?

If you have graduated from a Chinese university, you can apply for an entrepreneur visa with letters of support for your application (in the prescribed certificate format) from your financiers, university, startup incubator or the industrial park you are based in, along with a copy of your viable business plan.

The university concerned also can provide detailed information on local laws and regulations. You can consult your university career office for more specific guidance.

What are the key government policies in China that benefit enterprising expatriates with entrepreneurial ambitions?

The new policy announced this year grants a visa of two to five years for fresh Chinese university graduates from other countries who have viable business plans or demonstrable entrepreneurial potential.

Startup owners in certain zones such as Zhongguancun in Beijing and free trade zones in Guangdong and Shanghai can also benefit from a favorable permanent resident, or green card, policy.

For example, those with startups in such areas can apply for a permanent resident card after achieving 70 points in China's point-based visa system. More information on the system can be found at www.safea.gov.cn.

Where can I find more detailed information on how an expatriate can begin a startup in China, and on financial and other incentives, regulatory framework, relevant laws and taxes?

Please visit the China Consular Affairs' website of the Ministry of Foreign Affairs at www.visaforchina.org. There are many useful online resources that offer comprehensive information, including www.pathtochina.com. As for offline resources, you may want to visit your university, the industrial park or startup incubators for a range of information.

Typically, how long would it take for me to launch a startup in China and begin operations?

It usually requires one to three working days to register a new company with the State Administration for Industry and Commerce. This can also be done online. More information is available at www.saic.gov.cn. Application submission is followed by a five-to 15-day verification process. Then, one to two days are needed to obtain the official company stamp and certificate of registration.

However, before a startup can launch its operations, you will need to set up a bank account in the company's name, register the company with the local tax bureau and open your social welfare account. You will need to bring your company stamp, certificate and personal identification document for tax registration. It can be obtained within a day, but the time can vary according to the tax bureau. All in all, the procedures from A to Z will likely take 20 to 25 working days, which is considered much quicker than the current situation in many other countries.

Are local/provincial government policies and the central government policy to encourage foreigners to set up startups in China much different?

Foreign students in China usually need two years of work experience before they can work in China. But in cities like Shanghai, you can apply for an entrepreneur visa if you have graduated from a Chinese university, produce a financial guarantee and demonstrate a viable business plan.

When your application is approved, an S2 visa valid for up to six months will be issued. If you have an entrepreneur certificate from a municipal industry park or a recognized startup incubator, you can apply to extend your stay for up to two years. That time will be counted as equivalent to two years' work experience.

There is not much difference in government policy in terms of sectors or industries, but you will be more likely to receive an entrepreneur visa if your business plan or startup is related to your academic background.

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Hundreds of entrepreneurial expats attend a talent expo in Guiyang, Guizhou province. Wu Dongjun / For China Daily

(China Daily European Weekly 09/01/2017 page26)

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