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A ready made company in China would be a limited liability company already registered with a local market regulation administration (AMR), holding its business licence, that has not yet traded and changes owners by an equity transfer. Shelf company China, buy a company in China and company for sale in China are all searches for that purchase. In Hong Kong or the UK, companies kept on the shelf for buyers are a routine product; in mainland China they are not, for three reasons set out below: a new registration is decided quickly, an idle company can lose its licence, and unpaid capital passes to whoever buys. Treat any mainland offer as the acquisition of an existing domestic company and judge it on its record.
If an established company is what you want and the mainland is not essential, a ready-made Hong Kong company is the common choice, and it can later own a mainland subsidiary.
The Foreign Investment Law defines foreign investment to include a foreign investor acquiring shares, equity or similar interests in a Chinese enterprise (Article 2). Once a foreigner buys in, a domestic company becomes a foreign-invested enterprise, and the buyer meets every gate a founder meets: the Negative List, the Market Access Negative List, the licences tied to the business scope and, where national security may be affected, a security review. MOFCOM lists the Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors among the rules that govern such purchases.
The Negative List in force is the 2024 edition with 29 items. If the company’s registered scope falls in a prohibited field, a foreign buyer cannot take it over; if it falls in a restricted field, the listed condition, such as a 50% cap or a joint venture, still applies after the sale. The authorities refuse registration of a change that breaks the list. Leaving a Chinese seller on the register while the foreign buyer controls the company is not a lawful way round it: the law covers indirect investment, and the Supreme People’s Court treats equity transfer and other investment contracts in prohibited fields as invalid.
A purchase by a Chinese group through its own offshore company is a special case. The 2024 Negative List sends acquisitions of a related domestic company through an entity the Chinese party set up or controls abroad to the foreign investment, outbound investment and foreign exchange rules.
| Stage | What is done | Rule |
|---|---|---|
| Other shareholders | A sale to an outsider is notified in writing with quantity, price, payment and term; the others may buy on equal terms and lose that right after 30 days of silence, unless the articles say otherwise | Company Law, Article 84 |
| Transfer agreement | Stamp tax of 0.05% of the price on the equity transfer instrument, payable by the parties who sign it | Stamp Tax Law, rate schedule |
| Seller’s tax | An individual seller’s gain is taxed as property transfer income; the transfer is reported to the tax office where the company sits within five working days of signing | SAT Announcement 2014 No. 67 |
| Company records | The seller notifies the company; the register of shareholders and the articles are amended and a new capital contribution certificate issued, with no shareholders’ vote needed | Articles 86 and 87 |
| Change registration | Filed with the AMR within 30 days of the resolution, signed by the legal representative, with the amended articles | Market Entity Registration Regulations, Article 24; Company Law, Article 35 |
| Information report | Initial report for a domestic company acquired by a foreign investor, or a modification report if it was already foreign-invested | MOFCOM Foreign Investment Guide |
| Foreign exchange | The acquisition is registered as direct investment with a bank, using the modified business licence | MOFCOM guide, SAFE rules |
| Beneficial owners | New information filed within 30 days of the change | PBOC and SAMR Order [2024] No. 3, Article 10 |
For a company with one shareholder there is nobody to offer the equity to first, so the first stage falls away. Where a natural person sells, the AMR expects to see the tax: Beijing’s equity transfer guide, for one, asks for the individual income tax payment or return voucher for the deal with the change application. Until the change is registered, the new shareholding cannot be asserted against a third party acting in good faith (Article 34), and a company that fails to register a change can be ordered to do so and fined. The equity change is then published on gsxt.
A Chinese LLC’s shareholders subscribe its registered capital and must pay it within five years of the date of establishment. Buying the equity means buying that obligation. Under Article 88 of the Company Law, a buyer who takes over subscribed capital not yet due must pay it, and the seller stays liable in the background if the buyer does not. If the seller had already missed a payment date, or contributed assets worth clearly less than stated, buyer and seller are jointly liable for the shortfall unless the buyer neither knew nor should have known.
The clock does not restart with the new owner. An LLC established two years ago leaves three years for full payment, however recently it changed hands. A company registered before 1 July 2024 must have its remaining period reduced to five years by 30 June 2027. Read the subscribed and paid amounts on gsxt before you agree a price, and if the subscription is larger than you need, settle with the seller before completion how it will be dealt with.
The Company Law has no place for a company that simply waits. Under Article 260 the registration authority may revoke the business licence of a company that has not started business within six months of establishment, or that has stopped on its own for six consecutive months or more without good reason, unless it has gone through the dormancy procedure. Dormancy under the Market Entity Registration Regulations is designed for companies in difficulty after natural disasters, accidents, public health or social security events, must be filed before it begins and can last at most three years.
A second risk is the annual report. Every enterprise files one through gsxt between 1 January and 30 June, and one that misses it is placed on the public list of enterprises with abnormal operations. A company that has sat unused for years may therefore carry a revocation risk or an abnormal listing that a buyer inherits. That is the opposite of what a shelf company is meant to offer, and the reason mainland offers need checking line by line.
| Item | After the purchase |
|---|---|
| Date of establishment | Unchanged; it is the issue date of the first business licence |
| Business licence and unified code | Stay with the company; registered items that change are re-registered |
| Name, domicile and business scope | As registered; any change is a registration change, and a scope item needing approval needs it first |
| Legal representative, directors, supervisor | Usually replaced; the new legal representative signs the change application |
| Official seal | A new seal follows a change of name, as MOFCOM’s procedure chart shows |
| Tax registration and filing history | Stay with the company, including any gaps; a company already registered as a VAT general taxpayer cannot return to small-scale status |
| Bank account and foreign exchange registration | Stay with the company if the bank keeps the account; the foreign exchange registration is modified |
| Liabilities | Stay with the company, including unpaid capital under Article 88 |
An LLC’s cash capital has to go into a bank account opened in the company’s name, so a company that has received capital already banks somewhere. That account belongs to the company and remains with it through the equity transfer. The bank, however, reviews the new shareholders, the new legal representative and the beneficial owners, updates the foreign exchange registration and may keep the account, ask for more documents or close it. Our page on shelf companies with bank accounts explains how such a review runs, and what banks ask of new foreign-invested companies is covered on bank accounts for China companies.
Start with gsxt.gov.cn. The National Enterprise Credit Information Publicity System shows the registered name, domicile, scope, legal representative and shareholders, the subscribed and paid capital with contribution dates, every equity change, the annual reports and any abnormal-operations listing. Compare the scope with the Negative List if you are not Chinese.
Then ask the seller for the business licence, the articles and every amendment, the register of shareholders and capital contribution certificates, the tax registration details with all returns filed and the auditor’s reports, bank statements since the account was opened and the beneficial owner filing. Confirm that the company has either started business or has a lawful reason for not having done so, given the six-month rule. A company that fails these checks is better left alone.
For most foreign investors it does. A complete registration file is decided on the spot or within three working days, a new company starts with its full five years to pay capital and no history, and its name, domicile and scope are the ones you choose. Buy only when a specific existing company has something you need, such as a registered scope already approved or a banking and tax record that has value in your sector, and when the checks above are clean. The step-by-step route for a new company is on China WFOE and company registration, and our guide to aged shelf companies discusses what a company’s age does and does not prove.
In a China purchase we can supply an existing company or form a new one, prepare the transfer or formation papers and the registration filings, and help build the bank application. Where we have a working contact at a suitable bank we can introduce you; the decision is the bank’s alone. The country as a whole is covered on our China company guide.
Yes, where the company’s business scope is open to foreign investment. The purchase counts as foreign investment under the Foreign Investment Law, so the Negative List applies as it would to a new company, the change is registered with the AMR within 30 days, an information report goes to MOFCOM through the registration system and the acquisition is registered with a bank for foreign exchange purposes.
No. Acquiring equity in a Chinese enterprise is defined as foreign investment, and the registration authority refuses a change that breaks the list. A prohibited scope cannot pass to a foreign buyer, and a restricted one keeps its cap or joint venture condition. Investment contracts in prohibited fields, including equity transfer agreements, are treated as invalid by the Supreme People’s Court.
It becomes yours to pay. Under Article 88 of the Company Law the buyer takes over subscribed capital not yet due, with the seller secondarily liable, and shares liability with the seller for any amount already overdue unless the buyer could not have known. The five-year payment period still runs from the company’s original date of establishment.
Not freely. The registration authority may revoke the licence of a company that has not started business within six months of establishment or has stopped for six months or more without good reason. Formal dormancy is filed in advance, lasts at most three years and is meant for companies in difficulty after events such as natural disasters or public health emergencies.
Stamp tax of 0.05% of the price on the equity transfer instrument, paid by the parties who sign it. An individual seller pays income tax on the gain as property transfer income, and the transfer is reported to the company’s local tax office within five working days of signing. Beijing’s equity transfer guide, for one, asks for the seller’s tax voucher with the change application.
Search it on gsxt.gov.cn, which shows registered details, shareholders, subscribed and paid capital, equity changes, annual reports and any abnormal-operations listing. Then ask for the licence, articles, register of shareholders, tax returns, auditor’s reports, bank statements and beneficial owner filing, and compare the business scope with the Negative List.
Considering an existing company in mainland China? Ask us which companies are available now and send the business scope you need, so its Negative List position and capital history can be checked before anything is signed. Telegram and WhatsApp reach us at +48 663 247 166.