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China Business » Information » Types of Businesses to Set Up in China Types of Businesses to Set Up in ChinaAs with setting up a business anywhere else, there should be a lot of research done before getting too involved. Be sure that you can finish what you begin before starting.In China, there are three types of business incorporation arrangements, the setting up of a representative office, joining with a Chinese partner or the establishment of a wholly foreign-owned enterprise.  The simplest of these three and the one with the least amount of authority within China itself is the representative office. As the name suggests, this is an office to represent a company whose main office is outside China. This office can monitor and coordinate the development of research or some outsourcing business ventures. This is also the least expensive of the types of business incorporation arrangements. The representative of your company can order supplies, ship materials and even collect money. They may not, however, do any billing of persons or companies within China. Joining with a Chinese partner can help to maintain quality in products or services offer. You can have members of your team working alongside the Chinese partner's team to give advice or technical know-how. Using this relationship, you can provide a type of on-the-job training to members of the Chinese company's team. It is a way to develop local people to function in the way that you prefer. This arrangement also takes some of the pressure off your company since the Chinese company is a partner and must help with local Chinese issues which are not clear to you. Establishing a wholly foreign-owned enterprise is more expensive than the other arrangements. The company is completely owned by a foreign director or board of directors. No Chinese are required to be on the board. The arrangement was created to encourage foreign investment in manufacturing goods to be sold outside China. Recently, however, these foreign-owned enterprises have become allowed to trade within China as well as to companies outside the country. It is normal to consider that the types of businesses which could open in China are the very large international companies. Many of those companies have already become established in China. There is opportunity for smaller entrepreneurs to become involved as well. Choosing the appropriate one of the three arrangements described above, even a small business can be opened in China. Think of all of the smaller items which you purchase and find "Made in China" on a label on the item. These items represent small businesses in China. Whether you want to set up a representative office, join with a Chinese company in a partnership arrangement or have a company which manufactures products to sell to the Chinese citizens, this country is nearly wide open for your investment. Written on: 24th September 2007 Written by: R. Harris |
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