How to Start a Business From China

Starting a business from China can be a very lucrative and a unique experience.

With the current fast-growing consumer class in China, starting a business can be a very lucrative venture. There are massive populations in cities like Shanghai, Guangzhou and Beijing that not only allow for opportunities to grow a profitable business, but also experience new arts and culture. However, because regulations for opening a business are very strict in China, you should carefully plan out your strategy.

Things You'll Need

• Business plan
• Location
• Proof of lease
• Entity status
• Tax registration files

Instructions

1. Create a business plan for government approval. Your business plan needs to include your location, financial goals, product or service, number of employees and capital requirements. The Chinese government can shut down your business if you do not include the a description of the product or service that you are selling in your business plan. Have an international bank representative look over your business plan to see if it fulfills the Chinese business requirements.

2. Find a location in China to start your business. Important factors to consider are transportation needs, whether or not your goods are going to be imported to China, how you are going to get the goods from the port to your location and your what kind of government inspections and restrictions your location might be subjected to.

3. Get an office for your location. You'll have to find an office to provide proof of a lease to register your business. This requires you to get an office rent agreement that you can use as your office address. The agreement basically promises you the space on the terms that your business gets approved.

4. Select an entity status. You will need to decide which type of entity your business is before registering it with the government. If you run a business together with a Chinese citizen, then your entity status would be a joint venture. If you plan to use your business to build your brand name, then your entity status would be a representative office. If you plan to own your business by yourself and sell products with maximum quality control, then your entity status would be a wholly foreign-owned enterprise (WFOE). Make sure to research the pros and cons for each entity status before selecting one to register with the government.

5. Register with the tax bureau. Although two separate taxation authorities still exist, the state taxation bureau and local taxation bureau, company founders only need to file tax registration once to either of these authorities. It will take 30 days from registration to become authorized. Contact your local state taxation bureau for more information on completing the tax registration process.

6. Hire a representative to register your business. If you are not familiar with how Chinese business regulations work, it will be easier to have someone help you with the registration process. There are many foreign banks with branches or representative offices in China. Contact a representative office and consult with a representative that understands how Chinese business regulations work and whether or not they can help register your business for you.

References

• Inc. 10 Steps to Starting a Business in China
• Doing Business: Starting a Business in China