China is the number one world destination for foreign direct investment. Foreign businesses need to do their research before spending money or signing a lease on a new office space. Starting a business in China is different from many other parts of the world. The government has more involvement in the business world and there is more paperwork.
Even if you have to jump through more hoops to get started, China is one of the most fast-paced and rewarding business environments in the world.
Pick A Location
China is a large growing country and new business hubs are emerging. Cities like Shanghai, Beijing and Guangzhou are already established business centres. Shanghai is popular because the government encourages foreign business and innovation. Free Trade Zones allow many foreign businesses to operate without paying as many taxes as usual. In these zones, the government relaxes some of the administrative controls that are enforced in other cities. Office rental is easier and of higher quality.
Global Partner
If you choose to start your business in China with help from a local Professional Employment Organization (PEO) you can start operating in days. To find the best PEO services for your organization, speak to several different companies.
If you choose to incorporate your business with an official business structure the process could take months.
Hire Chinese Staff
It is recommended to hire Chinese staff instead of foreign staff. Chinese employees will know the local market better. They can provide insights to improve your products and services to make them a better fit for the local market. Chinese staff are critical for navigating cultural differences you don’t even realize exist.
As in other parts of the world, good employees are in high demand. It can be difficult to secure the best talent since they are constantly approached with enticing job offers. For this reason, it’s best to use a recruitment agency to find the best local professionals.
Business Plan
A good business plan is critical to sustain growth. When you’re starting a business in China your business plan will be approved by the government.
You will need to adhere to the guidelines you’ve written down. If you don’t you run the risk of being fined or worse. You want a business plan that is not so broad it will be denied, and not so specific that it will tie up and limit your business.
Open A Bank Account
Setting up a bank account can be difficult. The information you need to provide will vary from city to city, so keep that in mind ahead of time. It might be a pain, but having a local bank account simplifies the process of doing business in China.
Do Your Homework
Before taking any further steps, arrange a visit to China. Depending on your country of origin getting a visa may not be all that difficult.
Tour the country, talk to locals, meet with potential partners and get a feel for whether expanding to China would be a good move for your company.