Chinese market

What are the steps of starting a business in China?

As per the latest news report China received the biggest foreign direct investment over the past year owing to its rapidly rising class of consumers. Starting a new business in China is different from other western countries due to variations in language, culture, and complexities surrounding local policies as well as the business culture. This is why if you want to start business in China, it is important to understand the fundamentals of doing business in the country.

The different steps involved in starting a business in China

If you are thinking of starting a business in China then there is a wide range of aspects you need to know before you can proceed ahead. Here we will document some of these steps in brief.

Conducting market research in China: Before starting the business venture in China, it is vital to conduct a proper market research for understanding the Chinese market. When you do this research you will be able to understand the domains in which there is more potential, the resources, target clients, risks and opportunities.  

Selecting location for starting the business: It is important to choose the right location for starting your business. China is a big country with hundreds of cities and amongst these Beijing, Shenzhen, Guangzhou and Shanghai are the most prominent cities when it comes to business opportunities. 

Shanghai is a trade free zone that provides various incentives for businesses such as tax incentives for the trade companies, simplified procedures of customs, promotion of foreign investment, easier controls of foreign exchange, simpler process for formation of company, financial aid to financial institutions, and industrial business centers.

Testing China market using – Using China PEO and employment agency: Establishing the company in China can be time consuming as well as costly. Beyond the establishment you need extra efforts plus budget for maintaining it. This is why it’s important to test Chinese market at initial stage by hiring employees in the country before you establish a long term presence. You can hire your team of sales, representatives and consultants for experiencing and testing the Chinese market. 

This process of employment has to go through China PEO and employment agency. These agencies will sign the local labor contract for compliance with employees that you have selected acting as employer of record, and manage the on-boarding of employees including tax, mandatory benefits, and payroll for ensuring compliance with the local law.

The enables the foreign companies without legal entities to test the Chinese market in an easy as well as flexible way. If the trade test is good, investors can take the next step to establish a company that could be the Chinese market. If the business test run is good then investors can take the official next step of setting up the company else they can leave the Chinese market by notifying the agency.

Beyond this, the other steps involved in setting up a business in China include choosing the company structure, creating a legal entity for the company, opening the corporate accounts, protecting intellectual property, and starting the regular administration operations. 

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Christophe Rude

Christophe Rude

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