Some of the challenges encountered by those that are new to importation business are:
- How to avoid scam when finding suppliers in China.
- Verification of a trading company or factory.
- Registration of a company in China.
Registering a company in Shenzhen can also be referred to as Shenzhen company incorporation. Registering a Shenzhen company is an important choice for the foreign investor. It’s also the right business development mode.
Due to the rapid development of Shenzhen’s economy, the city has one of the largest economy in the world. It has a higher proportion of manufacturing, export and import and many investors take advantage of this to find the right business opportunities in Shenzhen.
The purpose of this article is to shed light on how you can register your business in Shenzhen, China. As a matter of fact, I’ll walk you through how I registered my company- SourcingBro.
However, before I proceed, it’s important to know the various business entities that you can register, the types of foreign companies and industries in Shenzhen and the steps to take in setting up your company.
The options of the business entities that you can register include:
- Wholly Foreign Owned Enterprise (WFOE)
- Partnership Enterprise (PE)
- Representative Office
- Joint Venture; and
- Hong Kong Company
You can find the difference between each of these options by clicking here.
The foreign company types and industries in Shenzhen, China include:
- Commercial trading company
- Consulting company
- Science and Technology company
- Manufacturing
- Food and Beverage company/ Catering Company
The following four steps need to be taken when setting up your business:
1.Pick the right location
You need to pick the right location for your business. We’ve discussed the 7 different districts in Shenzhen in our previous article about Shenzhen. It is important to familiarize yourself with the big city so that you can have numerous options.
2.Find a liaison
A representative is important while registering your company. The representative will help you with the necessary documents and the steps that you need to take to register your business.
3.Trademark your intellectual properties
A grievous mistake that you can ever make is not to trademark your intellectual properties before diving fully into your business. You need to know the first person to register a trademark owns the right to the trademark, irrespective of whether the person is the first person to use it or not.
4.Hire a qualified staff
You can start the business with someone that you’ve been working with before. The person must be knowledgeable enough to operate the business. This is because it is risky to hire someone you didn’t know especially for start-up/small business. You can also find professionals that you can work with on LinkedIn.
How I Registered My Company- Sourcingbro
It’s now time to walk you through the steps I took to register my company. These steps will also show you how you can verify a legal company and also find the right factory.
By following these steps, you will be able to set up and register your company.
Step 1: Register from http://app02.szaic.gov.cn/wermis2.webui/index1.aspx
Step 2: Click on “register” and inset USB into your computer
You may need to download the driver as shown below:
Step 3: I selected the certificate of my USB. In this case, it is China Merchants Bank
Step 4: After downloading the driver and connecting the USB with my computer, my Chinese name popped up.
My Chinese name is Zhou Chao while Jack Zhou is my English name.
Step 5: Enter the information of handler or operator. This refers to the person that is in charge of registering.
Step 6: Click “Agree”
Step 7: After entering the Handler/Operator’s information, select “Register Online.”
Step 8: Business Registration
Step 9
Step 10
Step 11: Zi Hao is like a trademark. It’s part of my company name. It’s just like HUAWEI TECHNOLOGIES CO., LTD. In this case, “Huawei” is the “Zi hao.”
Initially, I wanted to sue “Ai Wei” as the Chinese version of my business name but it was chosen. Thus, I replaced it with “Ai Wei Xin” which means trust.
The English version of my company name is SourcingBro. Thus, the company name is Shenzhen Sourcingbro Technology Co., Ltd.
Step 12: For Sourcingbro, I thought it should be a trading company but there were some limitations, so I changed it to Technology.
Step 13: In displaying my company name, I had three different options:
- Shenzhen Aiweixin Technology Co., Ltd.
- Aiweixin Shenzhen Technology Co., Ltd
- Aiweixin Technology Shenzhen Co., Ltd
Step 14: After confirming my company name, we need to enter a figure for “Registered Capital.” I entered 500,000 Yuan. Note that I did not pay this amount. In fact, I didn’t pay 1 Yuan. You can put in any amount in this section because the authority will not verify the capital in your bank.
There are myths that the amount you enter in the “Registered Capital” signifies your company size. This is not true anymore. As a matter of fact, a friend of mine wrote 5 million Yuan and he is the only staff in the company.
Step 15: Enter the information of the Supervisors and General Manager
Step 16: Download the PDF file after submitting all information.
Step 17: Wait for about 3 to 4 days to get a notification from Bureau of Public Security. Once you get this notification, go to your district office for your business license.
Step 18: I got my license for Sourcingbro and it’s all free so far. Since I need a stamp for my company, I went to a shop next to the district to get the stamps. This cost me 690RMB.
The license that I got includes:
- Unified social credit code: 91440300MA5ECJXKXM
- Company name: Shenzhen Sourcingbro Technology Co., Ltd.
- Company type: Limited company
- Address: Room 1031-1032 Building No.2 Qing hu Science & Technology Park, Longhua district, Shenzhen China
- Artificial personor legal representative: Zhou Chao(My Chinese name)
- Date of establishment: 20th Feb,2017
How I Verified My Company
Now that I’ve registered my company, the next thing to do is to verify my company.
I did this via http://www.gsxt.gov.cn That’s the website for the National Enterprise Credit Information Publicity System.
You can either type in your company name in Chinese (mine is 深圳市爱为信科技有限公司) or you can copy your credit code (mine is 91440300MA5ECJXKXM).
After submitting, you will be required to do some verifications. Simply move the puzzle in the right place. This is to confirm that you are not a robot.
Then we got company name and unified social credit code, artificial person or legal representative (which is me) and the established date
The data you got include:
- The type of business
- Company name
- Artificial person or legal representative-Zhou Chao
- The date of establishment
- Registered Capital: 500,000 Yuan
- Business scope
For the business scope section, you will come across lots of products services. Since Soucingbro is aimed at helping small businesses in sourcing and purchasing from China,
I need to add more information as much as I can. Such information include vending machine, electronics, digital products, computer accessories, lightning products, toys, general merchandise and so on.
How to Know If A Factory Is A Trading Company or Not
Normally, six Chinese characters will be involved when registering a factory. These include:
生产（Sheng chan）
制造（Zhi zao）
加工（Jia Gong）
For better understanding, all of them refer to “manufacturing.”
At the beginning, I was planning to add one of these in my business scope such as vending machine manufacturing.
However, I later got to know that you shouldn’t add “Sheng chan,” “Jia gong” or “Zhi zao” in your business scope if you are not planning to do the real production as these will incur very serious tax issues and administrative punishment.
So, how can you verify if a factory is a trading company or not?
We move to Alibaba and type LED bulb in the search bar. We got 2,051 suppliers, we just need to select first one.
In their company file, I saw the company name: 广州亚能能源科技有限公司(Guangzhou Anern Energy Technology Co.,Ltd.)
Let’s hover to http://www.gsxt.gov.cn (National Enterprise Credit Information Publicity System) to have more details into this company. We got this:
I saw they have “Sheng chan” and “Zhi zao” several times in their business scope. These show that the company is a real factory.
I know you might say Chinese looks alike thereby making it so hard to remember and recognize. However, you can ask your connections that have better knowledge about Chinese. You can also ask me directly without any charges.
Conclusion
This article has done justice to registering your company name, verifying your company and verifying if a particular factory is a trading company or not. With these information, you should be able to carry out your business incorporation without any challenges. If you have any question, kindly drop them in the comment section below.
