I’ve spent the last couple weeks exploring the options for staying a little longer term in China. As part of this, I’ve talked to some folks who set up business in China. Although this might be a little more than I was initially anticipating pursuing when I came to China, I have met many people who have done it and it does sound like an interesting option.
Since business does not always make for the most interesting blog topic, I wanted to touch on some of the highlights that I found interesting coming from the US:
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In China, where the only constant is change, regulations have been changing fairly recently, so everything I write below is subject to change…
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Depending on the business, taxes may be due as often as monthly. Further, the tax rules cannot only be different from city to city but also from district to district.
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The legal regulations applicable for businesses may also vary dramatically from district to district.
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Because of the above, it is good to either have some good accountants/lawyers with knowledge of the local specifics or be working with one who has good contacts in the locations you are interested in.
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Good legal and accounting services may cost you almost as much and maybe even more than in the US. On the other hand, good resources can make/save you a lot of money… and this is particularly true in China.
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As a business, currency exchange is no easy task. Doing so usually involves a solution that will incur additional costs for the business (cost of doing business in China). Since these fees are often fixed, being a large entity has advantages.
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Some businesses will entail extra expenses you might not have anticipated. For example, starting a restaurant may entail that you hire a minimum number of staff, even if not all the staff is optimally utilized… ever noticed there are lot of workers standing around in some restaurants.
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Depending on your type of business, there are complex restrictions for what kind of entity you can use. For example, there may be rules regarding Chinese involvement/ownership. There are different entities such as WFOEs (whole foreign owned entity) and JVs (joint ventures) that involve varying degrees of local versus foreign management/ownership.
Well, in any case, the business environment in China is very complex. The opportunities are also abundant for those who are able to navigate it well.
‘til next time,
New Lao Wai