6 Tips Foreigners Need to Know When Starting a Business in China

First things first: you’ll need to let go of some Westernized conveniences to make room for the Eastern ones. When you conduct business in China, you’re not in Kansas anymore – literally, and the process of obtaining a work visa or placing an ad in the paper for a reliable employee can take more time and patience than it did in your home country. Read the following helpful suggestions to ensure your business in China as a foreigner doesn’t come back to you with unpleasant surprises and consequences, and instead brings you only entrepreneur success.

Learn from those before you. Don’t be shy about talking to as many other foreign business owners in China as you can since this is who you’ll learn the most from. What worked for them and what didn’t? What obstacles did they run into along the way?

Pick a stable area of China to support your business goals. If you’ll be transporting goods or having goods sent to you, think about your location. For example, Beijing and Shangai are two popular cities that support startups by a diverse culture and a rapid economy of consumers. If having quick and easy access to your businesses’ bank, local stores and the transport of goods is a priority then you’ll want to consider moving inland.

Decide on an entity. As one of the most important steps, you’ll need to prepare to register your business with the Chinese government. Before registering, consider hiring a local professional to help you determine whether you’ll be registering as a representative office, joint venture or wholly foreign owned enterprise. Whereas a representative office is the most affordable choice, wholly foreign owned enterprises give the owner total control. To determine the right choice for you and your business, make sure to thoroughly research your options, priorities and budget. From here, you can develop a strong business plan for the government to approve.

Hire a liaison. Some foreign business owners in China simply ignore this step, but you shouldn’t. Any foreigner coming to China to start a business could use the help of a representative, and why not? They will inform you of all licenses and fees, can guide you through the process and speak on your behalf while registering your business. If nothing else they offer a useful support for you as you make your transition into China’s business world.

Protect your product. The number one rule to know about Chinese business affairs is this: whoever trademarks the product first, owns the rights to it and the government takes this very seriously. Make sure to register your trademark early, or you could be hit with hefty fees and the result of your product never leaving the country.

Be choosy in hiring your employees. No one can make or break your business affairs like your employees. Get creative when hiring the Chinese, and consider a human services firm to help you in the process. China is diverse and the cities are cosmopolitan, meaning you can easily find many Americans or Europeans throughout. You may want to look into someone who speaks your language fluently but proceed with caution. Just because they speak the same language as you, doesn’t mean they should be trustworthy from the get go. Like any other aspect of your business, be cautious about who you trust to run your business.

Despite the tedious process of a start up for foreigners in China, the rewards are plenty. Shanghai and Beijing offer a booming economy to support foreign business in an array of services, goods and lifestyles and the country as a whole offers the foreign business owner in China a sea of consumers ready to buy. By following the steps as outlined here, you can guarantee a successful startup in China’s rapidly growing economy and continued success for years to come!

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