Steps To Start A Business In China As A Foreign Company

Foreign investments are always subject to market risk because the countries are not able to provide you with the same growth as you expect. With the globalization of business, plenty of opportunities for business organizations opened.

Before, it was challenging to access a particular market and dig into it for starting a business as a foreign company. The transparency of business has increased due to globalization, and China is exposing an exciting market so far.

Already developed countries are trying to inject their companies into the high population countries so that they can grab better profit margins than native countries. It is always wise to do business in a developing country.


It is because the growth opportunity is very high. While you are penetrating into a developing country, you are becoming a part of their development process, and thus people will accept your process of business quickly.

Why Do Business In China?

China is an already developed country. Doing business in China is always exciting for companies all over the world. Do you know the reason? The reason is the vast opportunity that China can provide you from every business aspect.

If you are looking for profit, China has the biggest population all over the world. They also have the second latest economy in the world. They have the infrastructure you need, the development you need, and the opportunity you need.

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Then why not China?

They are very flexible with business opportunities, and all they want is to be visible to the world as a strong country. Since China started to open up and reform its economic structure, they are considering a 10% economic growth per year. They are successful in lifting 800 million people from the poverty level.

Isn’t that exciting!

Steps To Start A Business In China As A Foreign Country

Since 1995, China has been following a Catalog for foreign investments, and you need to follow the same to be added as a part of business in their country. We will discuss a few effective steps necessary for your company to do business in China.

1. Choose A Legal Structure

If you are not sure about your business structure, you will not be able to form a business in China. First, gain adequate knowledge about the legal structures of doing business in China. As a suggestion, we can share with you the information about Wholly Foreign-Owned Enterprise (WFOE).

WFOE will allow you to form your business in China with whole foreign investors without any direct involvement of Chinese investors.

Though this process is hectic because the registration and approval process of WFOE is very complex, once you pass all the legal processes, you will be able to take advantage of it as well.

2. Pick A Location

Before you start your business in China, you need to have a better idea of the place where you are going to open your main hub. It is not necessary that all the places in China operate in the same way; rather, they act differently.

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For instance, Shanghai deals mainly with finance and banks, and chemical, logistics, while Shenzhen is probably the Tech-hub of China. You need to choose your location of business wisely so that it can match your perspective of business.

Though Shanghai is widely considered a good location for foreign businesses, you might consider the following criteria-

●       Logistical needs

●       Talent pools

●       Local government regulations

3. Consider Global Expansion Partner

When you are choosing a totally foreign investment process for your business in China, you need to consider a global expansion partner.

They can arrange the necessary steps, like distributing payroll benefits. Moreover, they can also help you by making the necessary arrangements for tax withholding.

What are you thinking? Will that work for you better!

Well, it can because a global partner may take a small part of your investment from you, but they will ease your whole business process. While establishing your new business in a place, these types of short routes can help you a lot.

4. Create Your Business Plan

When you are going to start your business in a foreign country, it will always be wise for you to have a concise plan for your business. China is ready with a bunch of opportunities for your business. But if you do not have an accurate plan, how will you form your business there?

Take your time to deal with your current strengths and weaknesses. Do not just ponder on investors and show them an efficient plan to regularize the understanding of your whole business process. You can consider the following parts of your business plan-

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●       Projected revenue.

●       Plan for a recruitment agency.

●       Plan your budget.

●       Plan the location.

●       Step up with your business process quickly.

To Conclude

China is a circle of business opportunities. If you miss it this time, another company will grab the opportunity. So be quick and wise. Do not let your instincts drive you in the country without a business plan.

To end this article, we will refer you to do business in China as a foreign company because it can give you the enormous opportunity to expand your business globally.

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