Foreign-invested Software Company
Proposed Company Name (must be approved)
***Software (Shanghai) Co.Ltd
***Software Development (Shanghai) Co.Ltd
***Information Technology (Shanghai) Co.Ltd
Type of establishment:
WOFE, Chinese-foreign entity joint venture or contractual joint venture.
Business Scope (depend on final approval of the authority):
Software R&D、design，manufacture and sales of self-produced Computer Software、providing technology service and relevant consultation.
Registered Capital is the amount of funds that the Chinese government requires of foreign investors to contribute to their projects in China. The Chinese government sets requirements for the minimum amount of registered capital to start a business. Registered Capital must be of an amount greater than the minimum requirement of the China Company Law. The Registered Capital can only come from the foreign investors, and must be actually paid into the company bank account then verified by an independent certified accounting agency in China. The amount of registered capital can be increased but official procedures will be required. Registered Capital must be no less than 70% of the Total Investment Quota; however, the ratio may be decreased when the amount of Registered Capital exceeds US$ 3 million.
If you do looking for a minimum registered capital, for instance RMB 30,000, this means you will run out of money pretty soon (considering salary of employees, rent, equipment etc. ), which leads to increased costs in reapplying for permission to increase capital, additional licensing fees and renewals of business licenses and so on. The WFOE needs funding via it's registered capital until it's about to support itself from it's own cash flow.
However the amount of registered capital is dependent upon factors like Scope of Business and Location.
According to former experience we would suggest minimum registered capital to establish Software WOFE: 450,000 RMB in Shanghai
Registered address requirements:
Should be registered in commercial office, provided with lease agreement, copy of real estate license and equity form of real estate license.
Preferential tax policies for Foreign-invested Software Company
Foreign-company corporate tax:
Corporate income tax rate 25%, VAT 7%, sales tax rate 5%
Companies registered in Development Zone can enjoy high return tax policy: the highest sales return of 50% , VAT tax return of 9%, income tax return of 20%.