10 THINGS YOU MUST KNOW

BEFORE STARTING YOUR BUSINESS IN CHINA

1. A profound planning is a must

Calculate all the costs.

Set up costs, rent, HR costs, accounting, taxes, marketing etc. etc. Be sure
your funding is sufficient and cash flow will not have any problems. As a rule
newly setup companies do not generate much profit in the beginning so you
might want to make a careful marketing research beforehand.
Make sure your product is competitive on a Chinese market.
Such cities as Shanghai and Guangzhou have a large population and might
look as a very attractive market, but there is abundance of suppliers and
competitors as well. On the other hand, consumers are more progressive and
open to Western products there, so be sure your product or service is
adapted to local tastes of a targeted area.

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 10 THINGS YOU MUST KNOW
BEFORE STARTING YOUR BUSINESS IN CHINA

2. Your choice of a legal entity is crucial

Companies in China can operate strictly within their registered business

scope and accordingly with their type of a legal entity. Make sure your
product or service is allowed to be sold in China and state your business
scope as detailed as possible. Are you going to make business in China or just
explore the market and find suppliers? Depending on the goals your business
pursues in China, you can choose one of the following options :
A Wholly-owned Foreign Enterprise (WOFE)
A Joint Venture (JV)
A Representative Office (RO)

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 10 THINGS YOU MUST KNOW
BEFORE STARTING YOUR BUSINESS IN CHINA

3. Location matters

The taxation and regulations for companies vary in different geographical

locations. You have to know why you decided to set up in a certain area.
If you are looking for a developing market and less costs, stay away from
developed and costly big cities. Are you interested in high-tech and industrial
parks? Jiangsu or Zhejiang provinces might be right for you. Are you setting
up an import/export business or looking for a huge market open to Western
products? Shanghai will suit these purposes.
Check out the benefits of Chinese Free Trade Zones where companies can
store inventory in bonded warehouses without paying duty and trading is
greatly simplified trade in many ways.

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 10 THINGS YOU MUST KNOW
BEFORE STARTING YOUR BUSINESS IN CHINA

4. Your company’s intellectual property should be protected

As a business owner you want to keep your intellectual

property secure. Be aware about the Chinese IP rights including
patents, trademarks and copyrights.
China recognizes only registered trademarks rights and if you
want to sell on e-commerce websites like Aliexpress and TMall
or via a local distributor, the first requirement is to register your
trademark before any trade takes place.

To learn more about business with China, visit our website www.opportunityguide.cn
 10 THINGS YOU MUST KNOW
BEFORE STARTING YOUR BUSINESS IN CHINA

5. An online presence is vital for your business

Your distribution strategy is what will define the success of your

business. Sure you can partner up with local distributors and open
brick-and-mortar stores, but that should be just a top of the iceberg.
E-commerce is a major way to sell everything in China now. Creating
a user-friendly website is a basic requirement, what’s more important
is to realize that Chinese digital platforms are totally different from the
rest of the world. Weibo, WeChat, Baidu, Youku and many others –
should be your new advertising channels.

To learn more about business with China, visit our website www.opportunityguide.cn
 10 THINGS YOU MUST KNOW
BEFORE STARTING YOUR BUSINESS IN CHINA

6. Take care of your visa

Depending on how you see your presence in China as a

business owner, you should consider your visa type. Will you be
managing your company from abroad and just coming
occasionally on business trips or will you execute the job
personally in your office in China?
Check out what visa type suits your purposes better, perhaps
you would want to use the advantages of a new visa policy for
business owners in China.

To learn more about business with China, visit our website www.opportunityguide.cn
 10 THINGS YOU MUST KNOW
BEFORE STARTING YOUR BUSINESS IN CHINA

7. Be a responsible employer

Setting up a company means that you are going to deal with

HR and it will bring certain challenges. To be aware of ever
changing regulations, language and cultural barriers, labor costs
and organizational development in China is a complicated and
challenging task.
In general Chinese employment laws protect employees and in
most cases it is better to outsource a local HR company to will
help you save more money and develop your business
successfully.

To learn more about business with China, visit our website www.opportunityguide.cn
 10 THINGS YOU MUST KNOW
BEFORE STARTING YOUR BUSINESS IN CHINA

8. Know the culture in China

However developed and progressive China is, it is a foreign

country with its unique traditions and ways of doing business. It
is all about connections and keeping face in China.
 In order to expand your network and gain an advantage for
the growth of your business, try to learn more. You will find it
useful to know how they exchange business cards and conduct
negotiations, bargain and make lifelong partners in China - it’s all
about how open you are to embrace a new culture.

To learn more about business with China, visit our website www.opportunityguide.cn
 10 THINGS YOU MUST KNOW
BEFORE STARTING YOUR BUSINESS IN CHINA

9. Get external help

The question of entering the Chinese market is quite serious.

Obviously, it requires a thorough research and expert advice.
Mastering business in a new country is a difficult task and a well-
chosen local partner can be critical to your success.
 A well reputed Chinese business consulting company can help
you with taxes, duties, regulations, company setup, HR,
accounting, logistics and everything your business needs to be a
success in China.

To learn more about business with China, visit our website www.opportunityguide.cn