Important Questions about Opening a Business in China

doing business in China

Today, the Chinese market is associated with excellence. Whether you are an experienced investor or have a high-potential startup, one thing you can be sure of is that China offers a perfect opportunity for business growth.

But to take advantage of this opportunity, you need to make the first bold move of opening a business in China. In this post, we have picked and answered key questions about opening and starting a business in China. 

What is the Best Way to Start a Business in China?

Notably, the Chinese administration has a very stringent business legal framework. Therefore, the best method of opening a business in China is working with professional consultants.

These are agencies that have been in the Chinese market and understand how to simplify and make the process faster. Here are other benefits of using experts during China company registration (WFOE, Joint venture, etc…). 

  • They help you select the best business formation
  • The experts come in handy to help you set the best business structure 
  • They assist you in preparing the documents that might appear complex for you
  • With experts on your side, you can avoid mistakes that others have done when moving to Chinese  market
  • Experts will help you with the early establishment in China
  • The professionals  come in handy when it comes to exploiting regional and global markets 

joint venture in China

What are the Main Types of Companies that you can open in China?

There are many types of businesses that you can start in China. However, three of them are the most common: 

  1. Representative Office (RO): This is the simplest type of business to open in China. But as the name suggests, it is simply a representative of the mother company back at home. But a representative office comes with huge limitations because it cannot manufacture, cannot enter into a trade, and cannot export/import. It can only be used for non-monetary operations such as customer support staff or marketing. 
  2. Joint venture (JV):  This is another common type of business for many foreigners operating in China. Notably, the restrictions on the JV are fewer compared to a branch office. In this form of business setting, you enter into a joint business operation with a Chinese partner. Note that the Chinese partner will have controlling shares in the business. Therefore, you should be extra careful when selecting a joint venture as the preferred business formation. 
  3. Wholly Owned Foreign Enterprise (WOFE): In this type of business formation, the foreign investor is allowed to hold 100% of the enterprise. When you create a WOFE, it implies that you have the same right as a fully Chinese-owned enterprise. Notably, most WOFE enterprises are limited liability companies and can operate as manufacturing or retail businesses. 

How Does Opening a Business in China Work? 

We are not going to lie here; the process of registering a company in China can be complicated.

This is why you should consider working with a consultancy from the beginning. Here are the main steps used for opening a business in China:

  1. Select the preferred business structure and scope 
  2. Prepare the right documents 
  3. Apply for business approval
  4. Open a bank account 

Once you are through with opening a business in China, your gates for growth will suddenly fling open. So check the best consultant to work with and enjoy seeing your business grow rapidly.