I am recently helping a client to establish a foreign owned corporation which manufactures and sells medical devices in Guangzhou. Things went smooth at first, but in the final step of AIC( Administration of Industry and Commerce) registration, I was really tortured by the rigid and unreasonable requirements of the department. That may sound ridiculers to an American, for establishing a company in America is quite an easy thing and can be completed within one week. But in China, in spite of reforms against the bureaucracy and policies of promoting foreign investment, there is still large room for improvement.
Before this situation is changed, we still need to learn lesson from it and adjust to the current regulations and requirements, thus to help our client save money and hit the target in most efficient way.
The first lesson from my experience is that an investor, if is an organization, must have a seal and the seal needs to be affixed on some of the required documents. I know many foreign companies are not using a seal, I also told that to the officials of AIC, but they did not think that’s a reason for exception. So if the investor does not have a seal, just make one.
The second lesson is the signature. There may be some differences between signatures from the same person, that’s normal, but may incur bad results in AIC registration. The officials have discretion to judge whether the signatures on the documents are from the same person, if they think there is a possibility that some signatures are fake, they can refuse to accept the application. The officials don’t pay attention to this matter every time, but we do not want to take the risk. So, we should remind the client of signing his name totally the same.
The third lesson is the scope of business in name application. In some jurisdiction, the scope of business in name application is not important for establishing, but in Guangzhou, you must select the right scope. For everything related to AIC registration are handled online, if the scope of business in name application and that in registration application are not the same, the officials can’t move forward to next step and have to refuse to accept your application, and the only solution is to cancel the old name application and file a new one.
The aforesaid lessons are not complete but I think those are quite useful for our clients to save twists and turns in establishing a company in Guangzhou. It is also a precious experience for me, after handling this case, I am confident in maneuvering a similar in a quicker, cheaper and better way.
By Mike