China Business Setup
China business setup is also called China company setup, China corporate formation, China company registration, China company incorporation, China business establishment and China business registration.China, with a population of over 1.3 billion and a land area of 9.6 million km2, has a potential market for business development. China’s GDP increased by double digits in the past few years, since the strong economic development enhanced by foreign demand and domestic consumption. Now more and more investors rush to China for business setup and market share in form of WFOE or joint venture, owing to China’s market, labor and policy advantages.
China business setup-Forms of investment
1.Sino-foreign joint ventures
3.Wholly foreign-owned enterprises
5.Foreign-funded share-holding companies
6.New types of foreign investment, such as BOT (Build-Operate-Transfer)
China business setup-10 Steps for China business setup
1. Do your homework.Talk to people who have opened offices in China. Ask them how they succeeded and especially how they failed. Make sure you're informed about the state of the industry you're in. A lot of this research can take place from your own home. Check out the five-year plan that the Chinese government publishes, which details what types of businesses they're looking for.
2. Pick a location.
At this point, you have an entire country at your disposal, but you can't set your business down just anywhere and expect to be a success.First, get to know the big cities. The major business centers aren't your only options. Find office space through a realtor, just as you would back home. Whatever space you choose, though, make sure it is zoned for the type of business you're planning on opening, the investment places the foreign investors choose mainly include shenzhen,guangzhou, shanghai, chengdu.etc.
3. Choose an entity status
Before you register with the government, you need to decide what type of business entity to register. The most common for foreign businesses are joint ventures, representative offices, and wholly foreign owned enterprises. Each, of course, has its pros and cons.
4. Develop a business plan.
A detailed five-year business plan is crucial, because once the government approves it, you will be able to operate only within its guidelines. If you start offering a product or service that is not in your business plan, the Chinese government can shut your business down. The same goes for where and how you operate.It's also wise to tailor your plan to China's five-year plan.
5. Find a liaison … or several.
No matter how informed you are, you won't get very far without consulting a representative to register your business. A qualified liaison should be able to tell you where you need to go to register, whether it's the local, provincial or national government, and should do the talking once you get there.
6. Organize the necessary documents.
Though the documents you'll need to register for a WFOE will vary from place to place, you can find an extensive list of what you might need.Always prepare for a wildcard, though.Application forms may also differ depending on who you're dealing with. It's usually best to get it directly from the local authority.
7. Trademark your intellectual property.
Intellectual property violations are a big issue for foreign investors in China.In China, the first person to register a trademark owns the rights to it, regardless of whether or not that person is the first person to use the trademark.
8. Find a bank.
This part should be quick and easy, since there are plenty of banks with a huge presence in China. Try HSBC, which is based in Hong Kong, or Bank of America, which you can find all over the country.
9. Hire a staff.
Hiring in China is a delicate process, especially when it comes to hiring managers. Don't assume that just because a person's English is impeccable they'll be able to run the business properly.
10. Take it slow.
Now that you're all set up, you have to manage expectations. Don't jump into quick business deals just to turn a profit. It takes time to build business relationships over there. What will win you success in the Chinese market is patience.
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