Starting vs Buying a Company in China (updated)
The following article is from ExpatServicesShanghai Author Julian
We wanted to repost this article because this has been a common question asked by many as people consider options to stay in China longer and to legally work in China. We have also added some additional details to the original article. Please find the link here:
https://mp.weixin.qq.com/s/KGcQz1L2tXYcDaJSQhzfVg
Having a company in China does not guarantee a work permit and residence permit visa. One is required to work legally in China or you risk your profits being taken, company closure, plus other consequences as an individual for working illegally.
If you are unsure if you qualify for a work permit and residence permit, then I would suggest you figure that out first. Remember that the so-called “points system” is just one aspect to the application process. There are minimum requirements to meet for each category as well as some industries have specific requirements.
China has been implementing many corporate and visa laws differently depending on the city and/or district within a city.
Her message provided incorrect facts:
Complications in registration has been minimized as the government has eliminated the need for many required documents and combined licenses.
Purchasing this company comes with a major risk - when the ownership transfers, you would take over and be responsible for the past history of the company (liabilities).
Taking over this company limits your access to benefits in other districts because even if you change districts for the company’s registration, you are not registering a company from scratch.
Changing districts of a city in China is quite a complicated process for tax and other reasons, and some districts give special benefits for foreign startups
The fees involved are likely to be considerable. Transfer of ownership (to change the documents); perhaps a transfer of office address (a higher price charged and more time involved if changing districts); and her fee which she did not mention.
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Zenith Services is a management consulting firm, working with SMEs and startups in China, providing its clients with advice and tailor-made solutions in strategy, recruitment, business operations, project management, and accounting. We are fact-driven and action-oriented. We work with our clients to build the capabilities that enable organizations to achieve sustainable advantages.