China has numerous advantages to offer and that’s the main reason why so many foreign investors from different parts of the world are willing to start a business here. Be it low-cost labour or a modernized infrastructure, China has everything you’ll need as an investor. You might be wondering how a can migrant starts a business in China and the amount of time it will require. It’s permissible for migrants to start a business in China. Here are a few steps including Chinese document authentication, they should follow while starting their business in China:
- Identifying the market
Before you start your business, you must know what type of service or product can have the potential for you and your business to grow. China is known as “the world’s factory” and there are legitimate reasons for the same, and you might be involved already in selling service or product and want to manufacture it on your level. You must take a proper decision based on the market opportunities and demand of people. No matter what kind of business you’re starting in China, you must do good research beforehand. Identification of potential competition and calculation of the particular market share you can capture is also important.
- Select a business location
Based on the type of business you want to start, you will have to get access to different things like the nearest warehouse, factory, transportation, office space etc. If there are your business partners, you must consider proximity with them as an important factor too. China is rapidly emerging as a business hub as more and more companies are being developed here.
- Select a legal structure
There are five different options in terms of legal structure and you can choose anyone to do your business. These include Umbrella Company, completely foreign-owned enterprise, joint venture, distribution agreement and representative office.
- Make a business plan
Before you start your business in China, you must keep a business plan ready. Ideally, your business plan must include the following:
- Targeted revenue
- Business location
- Operational workflow
- Employment procedure
- Budget requirement
- Expected employee count
The business plan you prepare must be effective enough to help your business become successful. The plan must also be target specific to get approval.
- Create a bank account
The next important step is to create a bank account if you have already registered it under the WFOE. If you haven’t yet incorporated your business, you can choose from the different types of non-residential bank accounts offered by banks in China. If you set up a bank account in China as a migrant, it can be initially difficult for you. The conditions differ in every city and province. So, doing research is a must.
- Get approved by the Chinese authorities
As you can think of, there are several hoops you’ve to jump across if you’re a migrant willing to start a business in China. You will need documentation like articles of formation authenticated by the embassy of China, several copies of the investor’s passport as well as other bank references. You will also require showing your business opportunity, registered capital amount, copy of the authorization letter, address of the Chinese office and contact information of your legal representative.
- Safeguard your cognitive property
You can register all the patent rights, copyrights or trademarks because the registration you already had in your home country won’t give protection to your cognitive property in China.
- Appoint Chinese staff
There are lots of benefits you can get by appointing Chinese staff to your business. They will help in the navigation of all culture-related differences which might evolve. They will know the local market better and as a result, will also help you in improving your service or product through their knowledge.
These are the steps migrant needs to follow for starting a business in China. If you’re willing to give your business a new set-up in China, you’re about to take a very good decision that will help in the growth of the business. You will be benefitted in many other ways by starting a business here.