The Challenges of Starting a Business in China – Part 4 (Articles of Incorporation and Certifications)
To continue with the China saga discussed in my previous blog posts, (Blog #1, Blog #2, Blog #3) it was time for Hitcents to register with the Chinese Government. Believe it or not, this is where things got even more complicated and time consuming. The process is broken into three stages requiring three separate government agencies to be involved; the State (in our case, Kentucky), The United States State Dept., and the Chinese government.
The first thing that was required is to request our Articles of Incorporation with Annual Report and Certificate of Existence from the Kentucky Secretary of State. This process took only a few days, but the details of obtaining these documents can vary from state to state and have different fee schedules and expedite options. I requested three copies of each document since multiple copies are required depending on which Chinese district/city you choose to register in. This is the Kentucky-specific resource we used: http://sos.ky.gov/bus/businessrecords/Pages/Apostilles-and-Authentications.aspx
Once we received these documents at our corporate office, they had to be sent to the U.S. Department of State in Washington, DC to be authenticated. This, unfortunately, cannot be expedited, and the website states it will take 5-7 business days. If you try to call the number posted on their website you will not be able to talk to anyone (if someone finds a trick to this, let me know…). The voicemail box is almost always full, preventing you from leaving a message. In our experience if you leave a message they don’t call you back anyway (I called 7+ times and left two messages with no return call). For Hitcents it ended up taking 19 days to receive the documents back. I used the following resources to complete this process: http://www.state.gov/m/a/auth/index.htm, http://www.state.gov/m/a/auth/c16920.htm, http://www.state.gov/m/a/auth/c53215.htm, http://www.state.gov/m/a/auth/c53226.htm.
At this point we received the documents from the State of Kentucky, and we had sent them to the US State Dept. to be authenticated. Now that the federal government had authenticated our incorporation and existence documents, they had to be sent to the Chinese Consulate in Washington, DC to be certified. Looking over the Chinese Consulate website it states the process should take 7 days once they receive the documents, but to refrain from calling until at least 15 days have passed. Trying to call from here also seemed impossible. The office in Washington, DC deals mostly with visas and handles walk-in services for people that need rush delivery or just happen to live in the area. From the looks of the website it appeared you could get the same document certification services at the visa office. I had already booked my flight back to Shanghai and was leaving in seven days. If I sent the documents in, they would not get back to me in time, which was going to bring the entire business registration process to a screeching halt. I decided to take a risk (since I couldn't call ahead) and attempt to walk into the office and get the certification I needed. I booked the flight for the following morning to Washington, DC. Unfortunately, the easiest flight from Nashville, TN required that I get up at 3 a.m. The Consulate website stated documents received before 10:30 a.m. could be picked up at 2:30 p.m. the same day and my flight got in at 8:30 a.m. The office starts offering services at 9:30 a.m., but when I got there at 9:10 there was already a long line. I took a number and waited my turn, but was apprehensive about getting the documents in by the 10:30 a.m. same day cutoff. Around 10:15 I was called up to the window and quickly found out that they don’t see too many document certification forms at the walkup window. Along with the documents, you are required to provide a copy of each document for their records and a copy of a passport or driver’s license of someone on the board of directories. Thankfully, I was prepared for that, and after they had reviewed all the documents they asked me when I needed to have them back. I told them I would need to pick them up in the afternoon. However, they told me they no longer offer same-day services for this type of request and the earliest I could get them would be the next morning. Knowing I had a flight to catch at 4:50 p.m., I told them I had to have them today. After a bit of discussion and providing a copy of my boarding pass proving I was leaving DC that afternoon they agreed to rush the service through and return the documents by 2:30 p.m. I was halfway relieved but still wanted to have the documents in hand before popping open the Champaign bottle. Later, I returned after visiting a few museums to find that the documents were ready with the necessary certifications on all six pages, costing $420. The consulates certification was attached to the back of the United States State Dept. certification. It stated that the original documents and the state department certifications were real U.S. documents.
It’s interesting process to think about. The certification from the Chinese government is certifying that the authentication from the United States is real, which is authenticating that the documents from the Kentucky State Government are real. I never thought such an extended chain of verification would be necessary. I guess it means when you open a business in China, the Chinese government is only going to trust the U.S. Chinese Embassy, the U.S. Chinese Embassy is only going to trust the U.S. federal government and the U.S. government has to trust the state documents.
The entire process takes a lot of time and money every step of the way. The documents then have to be mailed to China or hand carried. Shipping anything quickly to China is expensive and slow relative to US standards, so I elected to bring them with me. Keep track of them though; these documents are your first step to being able to form a company in China.