Categories: Business

How to start a startup company in china

Although the Chinese economy currently exhibits great uncertainty due to trade war issues with the U.S. and border problems with various countries, you can still plan for your startup in China without any hassle. Some of the major factors that attract startup ventures in this country are its financial stability, easy access to a huge global market, and ease of manufacturing. Slowly but steadily, this country has been enjoying increased rankings for ease of starting a business in China.

Is it possible to initiate a startup in China without any professional help?

Starting a business in this country without external assistance is technically possible. But hiring professional, local assistance will help to ease up the process and avoid all hassles and obstacles that come in the way. The consultant will help plan your business, serve as local reps, and organize your paperwork. They will provide adequate and timely guidance throughout the setup and registration process.

What type of company can be registered in China?

When startup China is concerned, you can avail of multiple options. Three common ones are:

WOFE (Wholly owned Foreign Enterprise): Foreign entrepreneurs under this particular option can own 100% of the business here. But setting it up is tough. Once done, you can enjoy rights similar to that of Chinese-owned businesses. The majority of the WOFEs are Limited Liability Companies (LLCs), where partners’ responsibility is limited to own invested capital. Being part of WTO, WOFE allows operation as retail stores or trading companies. Registered capital will be essential, with the amount varying between provinces, where the business is a plan to be established and the type of activities to be carried out.
JV (Joint Venture): Less restriction is noticed with the joint venture when compared to a representative office. ‘Restricted’ business structures such as SaaS (software as service) may form. There are, however, risks involved since your Chinese partner is likely to have more controlling power in the business. There are chances of you losing control of your business and brand if things go wrong. Since lax intellectual property laws are present in China, you should not take unnecessary risks if the plan is to produce, manufacture, or sell any high-value product.
RO (Representative Office): It is much easier to open when compared to other company structures. But it comes with several limitations. The representative office cannot trade with or accept payments from your Chinese client. It is an option applicable to offices which do not carry out direct business, such as your company’s marketing arm or client support staff.

Hence, knowing the above will help you have a successful startup in China.

Sameer

Sameer is a writer, entrepreneur and investor. He is passionate about inspiring entrepreneurs and women in business, telling great startup stories, providing readers with actionable insights on startup fundraising, startup marketing and startup non-obviousnesses and generally ranting on things that he thinks should be ranting about all while hoping to impress upon them to bet on themselves (as entrepreneurs) and bet on others (as investors or potential board members or executives or managers) who are really betting on themselves but need the motivation of someone else’s endorsement to get there. Sameer is a writer, entrepreneur and investor. He is passionate about inspiring entrepreneurs and women in business, telling great startup stories, providing readers with actionable insights on startup fundraising, startup marketing and startup non-obviousnesses and generally ranting on things that he thinks should be ranting about all while hoping to impress upon them to bet on themselves (as entrepreneurs) and bet on others (as investors or potential board members or executives or managers) who are really betting on themselves but need the motivation of someone else’s endorsement to get there.

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