The Asian economy is continuously on the rise. China’s economy has always been fluctuating, but its ease of manufacturing and the number of goods that it produced makes it appealing to entrepreneurs who are looking forward to doing business overseas. It may be a challenge for you to set up business in China if you don’t know the different workarounds.
Here are some tips for you to have China set up business without too many hurdles:
If you can afford it, it’s always easier to look for a local consultant.
A local consultant will be able to help you decide on the particular business structure, to organize and file all the required paper works, and act as a representative while you are still out of China.
A local consultant can guide you through the whole process of getting your company registered. It’s crucial for you to come up with an independent research for you to come up with the best consultants.
You have to choose the type of company to set up business in China.
There are many types of business set up in China. Each one has its own set of pros and cons. These are the three most common types that you can select from when you set up business in China.
- THE RO or the representative office which is easier to start but it can be limiting compared to the other business types. For instance, it can’t manufacture goods, can’t export or import, and not even accept payments from clients. This can be a good option for offices that don’t transact business directly.
- The second type is a joint venture which has lesser restrictions than the representative office. This type of business comes with a risk since it entails a Chinese partner. When that partner decides to leave the business, you may lose your brand and business.
- The third type is the Wholly Owned Foreign Enterprise or (WOFE). WOFEs let foreign entrepreneurs own 100 percent of their Chinese business entity. It may be a bit complicated to set up, however. One of its perks is that your company almost has the same rights as a China-owned business.
Develop a business plan
After you find set up business in China, you need to start developing the business plan for five years. This is crucial since once this is approved by the government this will serve as your guidelines.
When you start a business that offers a product or service that is not found in the business plan, your business can be shut down by the government. It’s the same principle as regards your location and business operations. That’s why you have to make sure that the business plan you make is as broad as it can be to make you more comfortable to operate it.
Yes, it is broad in scope but it has to be specific in details. This means you have to make sure that the projected profit, product or service description, expected number of employees, and budget are all laid out in the plan.