Ease Of Setting Up Business in China
For foreigners planning to set up a business in China, being properly informed is very important. This is because there are numerous rules and regulations that control every aspect of foreign investment in China. Failure to abide by the rules might attract hefty fines that might bankrupt your business or else still find yourself in jail. This is one of the reasons why you should look for a competent financial advisory firm that has a good understanding of the business landscape in China. Actually, researching about investing in the country might be overwhelming for many foreigners. This is why you need professionals who have been in the country for some time and have a good understanding of how it works. First and foremost, you have to recognize that China is a big country. The firm that you choose to work with must have a presence in the different provinces of China.
The Different Investment Structures Available to Foreign Investors
When you eventually decide to set up a business in China, you have to make a decision on the most suitable business vehicle to use. Actually, you will have three main options that you can use to have a business presence in China. The most ideal investment vehicle will usually depend on a number of factors. For instance, the kind of business activities that you are planning to carry out in the country is one of the main considerations.
A Wholly Owned Foreign-Owned Enterprise
This is the most common vehicle that foreign investors prefer to use in China. Most foreign investors prefer this medium for a number of reasons. If you are seeking to invest in China and yet have as much control over the company as possible, this is the most ideal structure to use. For this structure, all the capital for establishing the business must come from abroad. If you do not want to lose control of the day-to-day running of your business, always consider using this as the best option for investment. Secure the best accounting services in China by hiring a professional investment and accounting company.
The Joint Venture Investment Structure
One of the major characteristics of this investment vehicle is that it is similar to a limited liability company. However, for this investment structure, you have to team up with a native Chinese person to actualize it. This is because there are some investment aspects of the Chinese economy that are highly regulated. The government will not allow a foreigner to invest in such areas without the involvement of a local. For this structure to work effectively, there has to be a shareholder agreement that stipulates the rights of the different players seeking to invest in China. To understand the process of accounting in China, consider working with MS Advisory.
Opening A Representative Office in China
One of the main reasons why a representative office is distinct from the other investment vehicles is that it is considered to be an extension of its headquarters. This is one of the reasons why this structure is usually considered to be a liaison office. A representative office is highly limiting since your area is only allowed to conduct marketing and other kinds of research activities.