If you had an opportunity to grow your business abroad, what is the best jurisdiction? One of the most preferred options is China. For about four decades, China has adopted pro-business policies that make it good for company growth in the local market and the entire Far East.
For example, it has a supportive regime, awesome incentives, good inland container depots (ICDs), seaports, an educated workforce, and a large market.
By 2020, the country had grown steadily to become one of the largest economies, with its GDP only coming second to that of the United States. Now, you have the opportunity to grow your company by taking it to China and following the trend exhibited by the top brands in the region. However, registering a company in the jurisdiction can be challenging, but we are going to tell you the simpler and more effective method to use.
Decide You Want to Grow Your Business to China:
The first step in growing your business to China is making the big decision, “it is time to offshore.” This decision should trigger a range of activities, which are aimed at helping you to easily grow your enterprise. Think of registering a company in China and growing it in a similar way you can do it at home. Here are some things to consider at this stage:
- Preparing ample capital for your new venture.
- Think about business location. Which region in China is the best for your business?
- Which market do you want to target depending on the nature of your business? Is your enterprise in hospitality, telecoms, healthcare, or manufacturing, among other niches?
Pick the Preferred Business Formation:
Once you have made the big decision, it is important to decide the preferred business formation. This is crucial because it defines the ultimate control you will have over the enterprise’s decisions. So, what are the main business formations in China?
Wholly foreign-owned enterprise (WFOE)-
This business formation means that you can have 100% shareholding in the company. Therefore, you have total control over the enterprise, including hiring and profit management.
Joint Venture (JV)-
This business formation requires you to enter into a partnership with a local Chinese when registering your company. The Chinese partner is also required to have controlling shareholding on the company. However, the Chinese government is discouraging JVs and encouraging more companies to form limited liability companies.
Representative Office (RO)-
A representative office is considered an extension of the home company and is one of the easiest to form. However, it comes with major restrictions. For example, the business is disallowed from entering into profit-based deals on behalf of the parent company. Therefore, most companies use it for activities, such as market surveys.
Select an Agency to Help You with Registration and Business Growth:
Registering a company in China entails dealing with multiple offices, such as the Ministry of Commerce (MOFCOM), Public Safety Bureau (PSB), and State Administration for Industry and Commerce (SAIC), which can make it pretty complicated. But you do not have to worry about this when working with agencies that specialize in company registration. The agency can help you in the following ways:
- Crafting compelling documents.
- Helping you to understand different taxes in China.
- Opening a bank account in China.
- Taking advantage of double tax treaties.
- Preparing audits.
- Support for annual financial statements.
China is a land overflowing with potential for business growth, but you need the right business formation to take advantage of it. Using an agency of experts, registering a company in China becomes easy, and you also get assisted to rapidly expand the brand in the country and beyond.