|
With so much interest in China's rapidly emerging economy we find ourselves working with many businesses entering the local market. We thought we'd share a few of their questions (and the answers) to help others looking at similar moves. Q. Where should I locate my business? A. There's no simple answer to this, many foreign invested businesses are found in or around major population centres such as Beijing, Guangzhou, Shenzhen and Shanghai. However given the subsidies available for companies willing to locate in the interior, it may be that these locations no longer offer the best value for money or returns for your investment. It's essential to visit China and spend some time on the ground getting a feel for different locations before making a decision. Q. Is it easy to open a business in China? A. Yes and No. The Chinese government have taken great steps to making life easier for foreign investors but it's not always a simple process and it can vary greatly between locations. The Shenzhen Special Economic Zone (SEZ) is one of the easiest places to open a company, but higher labour costs compared to other areas may outweigh that advantage. Q. What's the best structure to use for a business in China ? A. There are three main types of company open to foreign investment in this country: The Representative Office (RO), the Wholly Owned Foreign Enterprise (WoFE), and the Joint Venture (JV). Which type would suit your business is sometimes difficult to determine, particularly as rules for what can and can't be done by each change on a provincial basis. It's best to seek local legal advice to determine how to make the most of your situation. Q. Is doing business in China much harder than doing business in the West? A. No, but it is different from doing business back home. The complexities of a relationship based culture rather than a transactional culture often mean that it's much slower than you'd expect (or believe) and there's generally a lower skill base in place, so training and development as well as quality monitoring should play a key part in your business strategy for success. Q. Can I get government subsidies for my business? A. Only companies with some form of Chinese ownership can qualify for the full range of government assistance in China. This means that foreign ventures that wish to access this funding will need to be joint venture structures.
Related Articles -
Business, Asia, China,
| 
