These Things U Must Know Before Starting a Business in China!

Starting a business in China is a big feat in itself. There are a lot of considerations to factor in and a different set of laws that one must follow to be able to have smooth-sailing operations in one of the world’s leading business country.

Aside from that, you would be required quite a financial and time investment. 

These Things U Must Know Before Starting a Business in China!

To be able to get to a level where your business can operate without being stressed with all the technical details, there are things that you need to know before you even go out and set up a business in China.

 

01
Business nature in China
  • A Wholly-owned Foreign Enterprise (WFOE)

  • A Contractual or Cooperative Joint Venture (CJV)

  • An Equity Joint Venture (EJV)

  • A Representative Office (RO)

  • A Foreign Invested Partnership Enterprise (FIPE)

  • Hong Kong company

 

02
Scope and definition 

The business laws in China are quite stricter when it comes to defining the scope of business. 

 

These Things U Must Know Before Starting a Business in China!

The Chinese local authorities reserve the right to prohibit or restrict your business if the scope and definition of your business do not align with China’s rules and regulations. 

 

It is noteworthy that they can permit and even encourage you to set up your business in China if the scope and definition have been laid out carefully and accurately. 

 

To save time and to not let your efforts go to waste, make sure you set the scope of your business first, so you don’t run into complications with the laws of China when it comes to setting up a business.

 

03
Minimum registered capital 

Typically, the Chinese government has a definite minimum registered capital depending on the scope and nature of business. 

 

These Things U Must Know Before Starting a Business in China!

To avoid any future hassle due to foreign currency control policy, it is highly recommended to set a minimum registered capital based on your business scope and operation scale even though it is not required by law.

 

Before you even start acting on the actual set-up of your business in China, it is important that you know about the minimum registered capital for the type of business you have to avoid financial loss.

 

04
 Responsibilities as an employer

 

Setting up your business, handling the employees’ payroll and statutory benefits in China, especially for foreign companies, can be a very overwhelming, complicated task. 

 

Moreover, different cities in China have different policies and it is very important to adhere to them. 

 

These Things U Must Know Before Starting a Business in China!

 

To ease the stress and minimize confusion in this process, it is best to consult an experienced and a licensed service provider about the best way to manage this process.  

 

Thus, outsourcing the administrative tasks to a local service provider with strong local know-how is very common among foreign small and medium enterprises in China.

 

05
Thorough background check 

 

We cannot deny the fact that scammers exist anywhere in the world. China is not excused with this. 

 

It is very important that you check your joint venture partner’s credibility. Before you even think of signing a contract with them, you should exhaust all means of research to know the truth behind your business partner.  

 

These Things U Must Know Before Starting a Business in China!

China is a foreign land and doing business with an offshore partner carelessly is a hassle and it can bring about complicated repercussions to you and your business.

 

An expat from Shenzhen started crowdfunding (fundraising) for himself online on website gogetfunding.com to fight judgment in court because he was cheated by his partner and barred from leaving China. 

 

Check! These Things U Must Know Before Starting a Business in China! https://gogetfunding.com/being-wrongfully-sued-in-china/

 

06
Employee management system 

 

  • Staff training

  • Performance assessment

  • Career management

  • Communications policies

 

07
 Company’s intellectual property

  

Since you’ve gone all the way to set up a business in China, you don’t want it to be a waste by losing the intellectual property to others. 

 

These Things U Must Know Before Starting a Business in China!

Be knowledgeable about Chinese intellectual property (IP) rights. The IP protection rights will provide a business with the protection and registration of trademarks, copyrights, and patents. 

 

Also, be aware that disclosure and other issues might affect and limit your application and will jeopardize your efforts of securing IP protection. 

 

If you are really serious about doing business in China, you should start processing the IP protection rights of your business as soon as possible so as to avoid any conflicts and disputes.