Registering a startup in Shenzhen is easier than registering in Guangzhou, leading many Guangzhou-based startups to register in Shenzhen, the New Express reported yesterday.
There were 261 Guangzhou companies registered in Shenzhen in 2011. The annual number rose to 500 in 2014, according to data from Shenzhen’s market and quality supervision commission.
The spokesperson of Miao-ding, a Guangzhou-based startup that registered in Shenzhen this month, said the simplified registration procedures in Shenzhen are a factor, along with the Shenzhen authority not asking for some certificates that Guangzhou requires.
“It takes a month to get these certificates in Guangzhou, but one month is long enough to ruin the future of an Internet company,” said Yu Wenhui, the founder and CEO of VCHello, a website in Guangzhou that matches angel investors with startups.
Li Jingtong, the co-founder of OpenCom, also based in Guangzhou, said his company registered in Shenzhen with the Chinese name of “Baitong” because another technology company in Guangzhou already used the same name.
If the company’s name has two of the same Chinese characters as another company in the same industry, it will be considered as a duplicate name and won’t be approved in Guangzhou.
“It’s been difficult to pass the name pre-approval when registering in Guangzhou because of the big possibility of duplication,” said Qing, a staff member at CCiC, a Guangzhou-based incubator for Internet startups. Over half of the startups in CCiC have registered in Shenzhen.
Qing added that registration in Shenzhen may cause inconvenience for Guangzhou-based companies in the long term because companies have to pay taxes in Shenzhen, and they may miss out on privileges when Guangzhou introduces more favorable policies for startups in the future.
Companies with the same or similar names are not allowed to register in Shenzhen either.
“But there aren’t specific rules to define ‘similar names,’ and review and approval of names mainly depends on a reviewer’s judgment,” said a spokesperson of Shenzhen’s market and quality supervision commission.
He said the approval rate in Shenzhen stands at around 65 percent, adding that Shenzhen has enabled companies to register names without pre-approval since July, as long as the name meets certain rules.