Shenzhen, situated just
across the border from Hong Kong, is a beautiful coastal garden city in South
China. Shenzhen which is the China's first special economic zone established
via the patronage of the late Chinese leader Deng Xiaoping is a pioneering and
innovative city. It is in the vanguard of China's reforms and opening up to the
rest of the world. In its short history of 30 years, Shenzhen has developed
from a small fishing village into a modern city with a gross domestic product
(GDP) per capita which gives it premier ranking in China.
Shenzhen has risen to
become the predominant epicenter of high-tech
design and manufacturing in the world. Variously called the “world’s factory,”
“the new Silicon Valley,” and the “maker’s dream city,” Shenzhen has a complete
ecosystem that contains everything needed for all stages of electronics
production all in one place. This has turned the city into a staging ground for
large high-tech companies, rising startups, and independent innovators from all
over the world looking to get their stuff made as efficiently as possible. Tech
giants like Huawei, ZTE , and Tencent all
got their starts here, and many more companies seem to be on the way up.
Shenzhen is the place where
China's first forays into Reform and Opening — the experiment that sparked
China’s particular brand of capitalism — was first deployed. Hardly 35 years
ago the place was nothing but a string villages and rice paddies, with 30,000
peasants peaking across the border at an economically rollicking Hong Kong.
Now, it is a 12 million person megalopolis that can rival its more established
neighbor in almost every way. No city in history has ever grown so large so
quickly.
It is said
that 90 percent of the world’s electronics are made in Shenzhen. With tens of
thousands of factories, 5,000 product integrators, and thousands of design
houses, this city has become a one-stop-shop for anything consisting of
circuits, chips, LEDs, and touchscreens. Shenzhen is also home to 20% of
China’s P.h.Ds, has the country’s highest rate of business owners, and has
produced more billionaires than anywhere else in China. In 2014, The Economist
declared Shenzhan to be the best place in the world for a hardware innovator to
be.
The big break for
Shenzhen’s electronics industry came with the global popularity of the
cellphone. In 2003, Nokia and Motorola were
kings. They were producing a product that was almost universally taken to be
premium, and their feature phones were selling in the $600 to $800 range. Then
Shenzhen took over. Being able to design, produce, and ship their phones around
the world vastly cheaper, Shenzhen’s manufacturers undercut the incumbents’
hold on the market with phones that sold for under $100. This made cellphones
accessible to a larger swath of people, opened new markets, and ignited the
fire of demand for this device that is still spreading today
Strong R&D capability and a complete
industrial chain have made high-tech industries Shenzhen's most important
pillar.
OUTPUT VALUE
The total output value of high-tech
products made in Shenzhen reached 1.7 trillion yuan in 2015, up 11.16% from the
previous year.
INPUT IN R&D
In 2015, expenditure of R&D of Shenzhen
accounted for 4.05% of its GDP.
R&D POWER
In 2015, the PCT applications amounted to
13,300, comprising 46.9% of the nation's total and stayed at the top of China
for several consecutive years. There are 5,524 recognized State-level high-tech
enterprises in Shenzhen. The 4G technology, genetic sequencing analysis,
metamaterial technology, new energy automobile and 3D display technology are
among the leading technologies in the world.
HIGH-TECH INDUSTRIAL PARK
Construction of the Shenzhen High-Tech
Industrial Park, known as SHIP, started in September 1996, with a planned area
of 11.5 square kilometers. In 2015, there were 985 high-tech companies in the
park and 444 companies' annual output value was over 100 million yuan. There
were 84 listed companies.
VIRTUAL UNIVERSITY PARK
Shenzhen Virtual University Park was built
in 1999. The park's major functions are to train and introduce first-class
professionals, integrate industrial and research resources, establish key
research labs and doctoral workshops, and promote cooperation between Hong Kong
and Shenzhen research centers. So far, it has cultivated more than 240,000
professionals, and fostered 967 start-up companies and 240 research centers. It
has eight peacock teams.
HI-TECH FAIR
Cosponsored by the Ministry of Commerce,
Ministry of Science and Technology, Ministry of Industry and Information Technology,
National Development and Reform Commission, Ministry of Education, Ministry of
Human Resources and Social Security, Ministry of Agriculture, State
Intellectual Property Office, Chinese Academy of Sciences, Chinese Academy of
Engineering and Shenzhen Municipal Government, the China Hi-Tech Fair (CHTF)
began in 1999 and has been held each year since. The 18th CHTF will be held in
November 2016.
BGI-SHENZHEN
BGI-Shenzhen, established in 2007, is
engaged in scientific research of public interest. BGI-Shenzhen has achieved
breakthroughs in the large-scale discovery of gene resources, in the sequencing
of complicated genomes of higher forms of life, and in the research of
inherited diseases. BGI-Shenzhen topped the industrial organizations by collaboration
score.
SHENZHEN INSTITUTE OF ADVANCED TECHNOLOGY
OF CAS
The Shenzhen Institute of Advanced
Technology of CAS was established in 2006 by the Chinese Academy of Sciences
(CAS), Shenzhen Municipal Government and The Chinese University of Hong Kong.
With a talent pool of around 2,000 scientists, the institute focuses on fields
including robotics, healthcare and medicine, new energies and new materials,
cloud computing and the Internet of Things. It incubated over 300 companies and
five of them will be listed on the National Equities Exchange and Quotations
System or ChiNext.
KUANG-CHI INSTITUTE OF ADVANCED TECHNOLOGY
The Kuang-Chi Institute of Advanced
Technology is a research institute sponsored in 2010 by industries, government
and venture capitalists. Kuang-Chi Institute attracts distinguished scientists
from different countries and territories and features collaborative
cross-disciplinary research on metamaterials. In 2015, its patent applications
reached 3,000 and the patents in metamaterial research accounted for 85% of the
total applications in this field.
NATIONAL SUPERCOMPUTING CENTER
The National Supercomputing Center in
Shenzhen (Shenzhen Cloud Computing Center) is the city's largest scientific
infrastructure facility. The Dawn 6000 supercomputer system can perform 1.27
quadrillion calculations per second, certified in 2010 as the second-fastest
system in the world. The center was put into use in November 2011, processing
massive data for scientific research, technological and engineering projects as
well as serving as a cloud computing center for the whole society.
SHENZHEN-HONG KONG INNOVATION CIRCLE
The establishment of the Shenzhen-Hong Kong
Innovation Circle fosters technological collaboration between Shenzhen and Hong
Kong to create a global innovation center across the region. Since Shenzhen and
Hong Kong signed a plan supporting the Shenzhen-Hong Kong Innovation Circle in
2007.
HIGH-TECH TALENT POOL
By the end of 2015, Shenzhen was home to
1.35 million professional technicians. Of those technicians, 60,000 had studied
abroad. The Peacock Plan, aiming to attract top talent from overseas, helped
588 professionals settle in the city in 2015 and helped 1,364 talents in total.
In 2015, there were 2.85 million skilled talents in Shenzhen, among them
690,000 were high-skilled talents.
Shenzhen High-Tech Industry make Shenzhen Ideal For Foreign Tech Startups To Register Business Set Up Company In ShenZhen China
Shenzhen, fulfilling its role as China's 'Silicon Valley,' is now making it easier for foreign startups to incorporate here. What used to be an extremely tortuous and complex process, is now becoming a little more streamlined, although still far more difficult than opening a company in the West.
Tech startups
should absolutely consider opening a Shenzhen WFOE (Wholly Foreign Owned
Enterprise), as this offers complete control over what your company does, with
whom, and when. It also protects your IP, which of course is very important for
technical and internet companies where theft is that much easier.
To facilitate people who want to invest and
set up company in Shenzhen, here is an introduction of Types of business
presence in China:
Before starting up a business in China, you
have to know what are the options. Foreign Investors generally establish a
business presence in China in one of five modes: Wholly Foreign Owned
Enterprise (WFOE); Representative Office; Foreign Invested Partnership
Enterprises (FIPE); Joint Venture and Hong Kong Holding Company.
Wholly
Foreign Owned Enterprise (WFOE) is a Limited liability company wholly owned
by the foreign investor. WFOE requires registered capital and it's liability of
equity , can generate income, pay tax in China and it's profit could be
repatriate back to investor's home country. Any enterprise in China which is
100 percent owned by a foreign company or companies can be called as WFOE. No.
minimum registered capital is required for WFOEs with scope of business of
consulting, Trading, retailing, information technology etc. in China. There are
minimum registered capital still required for some industries for instance:
Banking, Forwarding etc Since China still maintains foreign currency control
policy, it's still advisable to choose registered capital within RMB 100,000 ~
RMB 500,000 as the minimum registered capital. Companies can now determine how
much capital will be required to maintain their operations and must simply
ensure that they meet those targets within a period of 10 years.
Representative
Office (RO) is a Liaison Office of it's parent company. It requires no
registered capital. It's activities would be: product or service promotion,
market research of it's parent company's business, Quality Control liaison
office etc in China. RO generally is prohibited to generate any revenue nor
generating contracts with local businesses in China.
Joint
Venture (JV) is a Limited liability company formed between Chinese investor and
Foreign investor. The parties agree to create a entity by both contributing
equity, and they then share in the revenues, expenses, and control of the
enterprise. JV usually been used by foreign investor to engage the so called
restricted in areas such like: Education, Mining, Hospital etc.
Since
March 1, 2010, Measures of Establishment of Foreign Invested Partnership
Enterprises (FIPE) in China is taking effect. The regulation, which take
effect since March 1, 2010, are known as the Administrative Measures for the
Establishment of Partnership Enterprise in China by Foreign Enterprises or
Individuals. There's no required minimum registered capital for a Foreign
Invested Partnership Enterprise (FIPE) in Shanghai, Beijing, Shenzhen, Hangzhou
and rest cities of China
Hong
Kong Company usually been used as a Special Purpose vehicle (SPV) to invest
Mainland China. Hong Kong is one of the quickest locations to Incorporate a
business. Although a HK company is not a legal entity in Mainland China
(MainlandChina and Hong Kong, See Wiki 1 country, 2 systems), lots foreign
investors, especially investors from Europe and North America still chose to setting
up a Hong Kong company as SPV to invest China.
After China's entry to WTO, most industries
in China welcome foreign investment, WFOE setting up in China becomes the first
option of foreign investment's entity structures instead of Rep. Office setting
up in China At the mean time, for tax purpose, effective licensing system etc
more and more investors use Hong Kong as the holding company to invest China
mainland, using this offshore company to hold their operations in China.
Business set-up in Shenzhen is a big
project by itself, which requires financial and time commitments, business
management knowledge and China expertise. Identifying a competent agent to
manage the complex process will be a cost and time effective way to avoid
potential pitfalls
Since 2006, Tommy China
Business Consulting has been focusing on consulting services for our
clients to register company in ShenZhen. We offer a range of company formation
services including helping you to set up:
-Wholly Foreign Owned Enterprises (WFOE )
-Joint Ventures (Equity/Co-operative)
-Foreign Invested Partnership Enterprises
(FIPE)
Email: tomlee@tommyconsulting.com,
Skype: tomleeli
WhatSapp/Wechat/Cell Phone: +86 18926401128
