Why You Should Consider Buying a Shelf Company

Why You Should Consider Buying a Shelf Company

A shelf company is a company that’s incorporated and then left without any business activity.  In other words, it’s formed to be shelved. Shelf companies are generally formed with the intention to sell.

Here’s why you should consider buying a shelf company instead starting from the ground up.

Avoiding the Red Tape

Setting up a company in China can be a fairly complex task. Investors from all around the world try to start a company here because of its economic prowess but government policies and regulations make the task very difficult.

The red tape is unavoidable and very difficult to understand and tackle. A shelf company serves as a good alternative because the process of incorporation has already been dealt with. Although you have to pay extra for all the efforts already expended into setting up the shelf company, it saves you all the efforts of setting up the company by yourself.

Gaining the Benefits of Longevity

A company having spent longer time since inception enjoys many benefits:

  • Longevity can help impress banks and other financial institutions that provide finance for banks. At some in its life, almost every business requires finance for expansion. Financial institutions are more likely to lend to older companies than those just incorporated.
  • Older businesses are also likely to secure better suppliers and vendors. Suppliers and vendors are able to trust more companies that have been in the market for longer times. Suppliers and vendors are an integral part of corporations; as important as the company’s product line. Securing better suppliers/vendors can provide a business the competitive advantage it needs to defeat competition.
  • Some governments require longevity in order for companies to be able to bid on contracts. Thus, a newly incorporated company may not be able to bid on contracts, losing out on potentially great opportunities.

Thus, buying a shelf company can serve several different advantages. Foreign investors are especially wary of investing in China because of harsh policies and regulations.

Investors can instead choose to buy a shelf company in order to avoid all the red tape. Business China is a Chinese firm that provides all kinds of services regarding starting a company in country, including options to buy shelf companies.

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