May 24, 2024

A Guide to Setting Up a Business in China

The global business arena that we enjoy today is the result of decades of digital tech development, which is great news for the entrepreneur who wishes to expand to new markets. In this article, we offer useful information for those wishing to enter the huge Chinese market.

Various Business Types

There are 3 main business formation types in the Republic of China that are open to foreigners.

  • Joint venture company – A joint venture company is made up of a local company and a foreign business and one registered, the entity is able to trade immediately. The company can hire local employees and it should be noted that in some sectors, the Chinese partner must hold at least 51% of the company shares. By making good use of China corporate services with Acclime, you can expect a seamless business registration experience from a leading provider.
  1. 100% foreign-owned venture – A foreign company might decide to carry out some market research to determine the potential to trade in China, in which case, a wholly-owned foreign business can be registered. This enables you to import/export and you can directly hire local employees. It is important to consider investment structure; which entity is providing the capital and registered capital. If you want to succeed in business, you need great organization skills.
  2. Representative Office – Let’s say you wish to do some R&D in China, a Representative Office (RO) is the best type of business to register. Ideal for providing customer support, you can hire local staff from an approved employment agency and you do need a registered business address in China. If you would like to learn more about the various options when setting up a business in China, Google can take you to an experienced law firm that specialises in setting up companies for foreigners in China.

The importance of receiving legal advice

The commerce laws in every country are complex, in China, especially so, add to that a language barrier and things can be very challenging. This is why you need to consult with an experienced English-speaking lawyer at the very outset, to ensure that your application is compliant with the many rules. The legal specialist would give you a list of documents and things to do, such as opening bank accounts and depositing funds. 

Other services

If, for example, you need secretarial services, or perhaps you would like to source a local bookkeeper and accountant, the law firm can connect you with local providers. Chinese culture is very different to the West and without some local help, you run the risk of non-compliance and that could lead to rejection. 

If you are interested in carrying out some market research in China or would like to join forces with a local investor, a Google search will take you to an established Chinese Law firm and you can make the right decisions.

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