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Buy a ready-made company in China in 2023

A ready-made company in China and how to buy it in 2023

05. 01. 2023

China is a gigantic economic center, but it is not easy for foreigners to open a business here: you have to go through rigorous checks. Nevertheless, if you act through intermediaries, there are opportunities to work in the Chinese market. One of them is to buy a ready-made company in China in 2023.

The advantages of China for business

China is focused on international business, so it actively implements programs that can interest both Chinese and foreign investors. The government helps young companies, provides subsidies, and supports production and logistics. Foreign businesses can get goods to trade at a very low price due to low import and export rates.

Buying a company to operate domestically will save on taxes. The government supports rural businesses, so it offers more low rates in exchange for new jobs than working in densely populated areas.

Other advantages include:

  • developed commerce, manufacturing;
  • stable economic and political situation, which allows to accurately predict the development of the market;
  • the absence of price hikes;
  • developed electronic commerce;
  • the ability to open an account in a Chinese bank;
  • qualified and conscientious staff with excellent knowledge of the English language.

A businessperson can move and live in China on an investment visa, which allows to take advantage of various benefits, interesting offers in the work.

Foreign business in China

Among the disadvantages of China is the long registration of the company. The way out is to buy a ready-made business. It can be either an active enterprise or a shelf company that was opened specifically for sale. A running business has to be checked thoroughly before buying, as it may have hidden debts, liabilities, etc. There are no problems with a shelf company bought from a reputable seller.

For investors who want to buy a ready-made business in China in 2023, there are options:

  • a company that is wholly owned by a foreigner;
  • joint venture;
  • a business in Hong Kong, which is a special administrative district of China, open to foreign investors;
  • wholly foreign-owned enterprise.

Before 2020, foreigners in China could register 3 different types of limited liability companies (e.g., WFOEs). They were called "foreign-financed enterprises," and each had its own restrictions. In 2020, the Foreign Investment Act was passed, which eliminated the name WFOE and the other types of companies. In their place was a "foreign-invested enterprise" that could fully operate under PRC law.

Joint venture

Another option is an organization where a Chinese partner is involved. This option is suitable for businesses that are closed to foreign companies. In this case it is necessary to discuss all the points (management plans, investments, control) in detail with the partner, so that no disputes arise in the future.

Ready-made business in Hong Kong

If you are planning an international business, in some cases (for example, IT) it is more profitable to buy a ready-made company in Hong Kong. Unlike mainland businesses, you won't have to pay tax on income that was generated outside of it. There are no currency controls, there are many other advantages. The law allows you to hire a nominee director if the owner will not live here.

How to buy a Chinese company in 2023

To buy a ready-made company in China in 2023, contact IT-OFFSHORE experts.

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