Five important things you have to consider before you forming your Chinese company

Forming a company in china is not an easy thing, and there are many different things you have to consider, the following are the 5 key factors suggested by the China law firm you must consider when establishing a foreign corporation and it lists out the following:

1.    You have to decide the corporate form of your company. Determining the right corporate form for the country in which you will be establishing your company is of great importance. Different corporate forms are as follows: Joint Venture, Representative Office, Wholly Foreign Owned Entity (WFOE), etc.

2.    You have to identify your business purpose. unlike in the U.S., the business purpose of an entity in a great number of foreign jurisdictions require that the business purpose of the entity to be described in detail which is true of china and where what you list as the scope of the business can end up limiting what it can do.

3.    You should choose a proper corporate name which means that great majority of foreign countries have specific requirements regarding corporate names in china.

4.    If any, you should determine the officer and director. China definitely has a different leadership structure than is familiar to Americans and this oftentimes results in problems.

5.    You should pay attention to quantify capital requirements which means you should know how minimum capital requirements “necessary to form an entity varies by country.”  This is actually true within China where some cities have fairly low minimum capital requirements and others have much higher such requirements.

More professional information please consult Chinese lawyer