If business is booming and you have conquered the domestic market, you are to be congratulated! A thriving business needs to expand and in this digital age, foreign markets are very appealing; the World Wide Web makes everywhere accessible. If you have your eye on the huge Chinese market, you certainly wouldn’t be alone, as there are some great opportunities in this massive marketplace. Foreign companies have long been importing Chinese goods, yet the domestic economy is the biggest in the world and since China opened up to foreign investment, more and more foreign companies are venturing into the Chinese market to sell their products.
Here are a few tips to help you make all the right decisions.
- Seek out legal advice – China has a vastly different culture to the west and if you are going to enter their business arena, you absolutely have to have a Chinese law firm on your side. Business registration is complicated enough in your home country; Chinese law is another level completely and with the right legal firm, you will make all the right choices and be assured of compliance.
- Outsource essential services – Find an accounting firm in China and all your bookkeeping, accounts and tax returns will be handled by local professionals, and for an affordable cost. If you need basic secretarial work, this can easily be outsourced to a local provider; when you hire Chinese nationals, there are many liabilities; it is easier (and cheaper) to use local services. Whatever you need can be sourced through a single company, search online for Chinese business registration solutions and that will bring up a list of law firms with experience in setting up foreign businesses in China.
- Choosing a type of business – As with most countries, there are several types of business you can register in China; if you would like to carry out some market research and are not yet ready to trade, a representative office would be ideal. If you have already done your homework and are ready to trade, a wholly foreign owned company is perfect. Talk to an experienced Chinese business lawyer and you will receive the best advice on all aspects of setting up a business in China. You might, for example, be interested in investment for citizenship, which is an easy way to become a citizen in a foreign country.
- Consider a Chinese partner – There are many benefits to local partnership; this ensures you don’t pay more than the market price, plus a Chinese partner would have extensive contacts in every department. There is much to consider; partnering up with a Chinese manufacturer would be perfect for your home market and there would likely be tax concessions further down the road.
- Market research – If you are thinking of retailing your product in parts of China, you need to first carry out extensive market research; set up an RO, (Representative Office) and you can use your offices as a base to do your research. This is a non-trading entity and it is perfect for your needs.
The Chinese government welcomes foreign investment, providing you adhere to their rules and regulations and with a local law firm in your corner, you should have no issues. If you need to hire employees in China a PEO China company can help you.
