Valuable tips to successfully start your business in China

In this article, we provide you several valuable tips to successfully start your business in China:

With the rapid economic changes brought on by economic globalization, more and more foreign businesses have entered and continue to enter the successful Chinese market. This is one of the many reasons that China is constantly growing and developing at a rapid pace in recent years. In China, the opportunities for your business to grow are endless. Yet, some business owners feel uncertain about their company being successful in China.


Set up a Company in China

Following are some tips we think are useful and will help you and your business to succeed in China:

Learn about the country before establishing your business in China

Cross-country business involves dealing with people from varied cultures. Conducting market research and knowing your customers or consumers prior to arriving in China is very important. There can be several differences when comparing any two countries in the business and cultural context. To make sure that your transition and incorporation of your business is as smooth as possible, it is important to conduct research about the country prior to your market entry into China. Some companies also prefer to set up a representative office (REP Office) in China prior to setting up a legal entity in China. A representative office in China allows the business to test the waters before the legal entity has been established. By conducting market research about the country, you can also make better, more informed decisions for your business since you are more knowledgeable on topics that will impact your business in China. Some important things to research are general information about the new country that you will be doing business in, your business sector’s growth and development in the Chinese economy, the business culture of China, as well as the different cities in China to ultimately see where your business should be located to succeed in the best way possible.

Reach out to others who have also established their businesses in China

Besides just conducting research online, it is also important to reach out and network with the successful entrepreneurs who have effectively established their business in China. It is a great way to learn first-hand what it is like to go through the process, as they experienced similar things that you will experience when beginning your business in China. It is also important to learn about the challenges and hardships that they have faced. Learning about these can prepare you and your company for potential setbacks and maybe even help you avoid some mistakes along the way. One of the most important foundations of business in China is long term business relationships or ‘Guanxi’ and therefore, it is crucial to build trust and develop relationships with your business partners, vendors, clients, etc. to have a successful business in China.

Find a licensed local service provider in China 

Setting up your business by yourself in China, especially if you are not fluent in Chinese, can be a very overwhelming, complicated task. To ease the stress and minimize confusion in this process, it is best to consult a representative about the best way to set up your business in China. Moreover, different cities in China have different policies and it is very important to adhere to them. Thus, outsourcing the administrative tasks to an experienced local service provider with strong local know-how is very common among foreign small and medium enterprises in China.

Have a strong business plan 

To set up your business in China, you must submit a 5-year business plan to the Chinese government. It is important to take time when figuring out this plan, as the government only allows foreign businesses to operate within the guidelines and rules set out in this plan. The government has the power to shut down your business in China completely if you do not adhere to the rules, guidelines, and regulations set out in this plan. When creating this 5-year plan, it is important to be broad and specific at the same time. Be specific about things such as location, products being sold, expected budget, and expected number of employees who will be working for you.

Hire an employee in China

Did you know that you can hire an employee in China even before your business is set up in China? An experienced and licensed PEO service provider, like HROne, can help you to hire this employee through them. In this arrangement, the PEO service provider acts as the legal employer for your employee in China while the employee works for and is managed by the foreign company. Many companies prefer this option as it allows the foreign company to test the waters before they establish their legal entity in China.

Know what business formation options you have

When bringing your business to China, it is important to determine what form of business you will set your company up as in China as you will need to figure this out when you register your business with the Chinese government. Many foreign businesses will set up their business in one of the following forms: a joint venture, representative office, or wholly foreign-owned enterprise (WFOE).

How HROne can be beneficial to your business

HROne’s offers Employee Leasing/Talent dispatching services for companies not having a legal entity in Mainland China, Taiwan, and Hong Kong. HROne fulfills all essential responsibilities as that of a legal employer for the local employees in Mainland China, Taiwan, and Hong Kong. Once your legal entity has been established in China, HROne can provide Payroll and Individual Income Tax Service, Employee Benefits, Legal documents like Employment Contracts and Employee Handbook, Commercial Insurance, Foreigner Visa, Tax & Accounting Services, etc. More importantly, HROne can provide bilingual service to its clients – both in English and Chinese.

The information contained in this article is valid on August 21st, 2017. For updated information, please contact us via email at


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