How to Start an American Business in China

If you are an American who has always dreamed of going overseas to China, starting a business overseas may be for you. The problem is that even though China may currently have a booming economy, it is still very difficult to start a business there due to their strict business laws. You will need to carefully plan and understand the foreign business process before you embark on this venture.

You'll Need

• Business plan
• Location
• Proof of lease
• Capital
• Tax registration forms
• International representative

Suggestions

1. Establish a business plan. You will need a detailed business plan for the government to approve it. If you are selling a product or service that is not described in your business plan, the Chinese government can close your business. Your business plan should include your location, financial projections, product or service, number of employees and budget requirements.
2. Select a location in China to open your American business. You should consider transportation needs, whether your business relies on goods that may be imported to China, how you will get the goods to your business location and what kind of government inspections and restrictions will you be subjected to. Some popular places to do business are cities with massive populations, such as Shanghai, Beijing and Guangzhou.
3. Provide proof of a lease to register your business. You will have to get an office rent agreement. This can be used as your office address. The agreement essentially promises you the rented space for your business provided that it gets approved.
4. Choose your entity status. Before registering with the government, you will need to decide what type of business entity to register. Common entity statuses are joint ventures, representative offices and wholly foreign-owned enterprises (WFOEs). The pro of a joint venture is you will be doing business with a Chinese citizen, but the con is they may end up with the business because you'll be working with someone who's familiar with the territory and on their turf. The pro of a representative office is they are easy and low cost, but you can't sell or do anything except build your brand name. The pro of a wholly foreign-owned enterprise is that it gives business owners maximum quality control, but the con is that it's much more complicated to set up, takes more time to get approved from the government and requires a minimum capital payment that you must invest in a Chinese bank.
5. Register for state and local tax with the tax bureau. If you own a company, you are required to file a tax registration only once. Your company must file a tax registration form and the initial tax reporting forms and submit them for review. Contact your local State Taxation Bureau for more information on completing tax registration procedures.
6. Consult a representative to register your business. There are many organizations in the United States that can help you with the application process. Contact the U.S.-China Business Council or Ministry of Commerce at the Chinese consulate. The U.S. Commercial Service office can also direct you to local offices in China. These resources should help you find a trustworthy international corporation to represent and register your business.

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How to Start An Import Export Business With China

Suggestions

1. For most Chinese suppliers, the payment term is a major concern to be considered instead of price, specially negotiating with a new importer or buyer on their first contract. I think this is reasonable fair to both side.
2. It will be easier to conclude a contract by using L/C payment term instead of D/P payment when Starting An Import Export Business with China, especially negotiating with your new exports or sellers. You may change the terms at a certain period later when your both side mutually feel need it and understand each other so well.
3. Do not concern yourself whether or not you appear polite or are sensitive to the foreign culture. Americans are generally considered the most polite and generous of visitors in foreign countries. Do not ask for references of other US customers of this supplier, they will likely not be helpful.
4. Do not expect your first contract be profitable. You plan to deal with a foreigner, a Chinese partner, facing a new but very different culture.
5. Do not expect you win all the things. You will pay your time at learning curve, and pay for lessons, mistakes when Starting An Import Export Business. NO PAIN NO GAIN! But you might gain your connection, your relationship, even more, your long term marketing - that's a big win! Don't forget this is your Foot Print in China, a 1.3 billion population country.

 

 

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How to Start an Online Business in China

With the country's overall economy growing at 10.3 percent year-over-year from 2009 to 2010, it's not surprising that you might consider starting an online business in China. The process of doing so can range from simple to exhaustive however, depending on your credentials prior to launching your sales website. In particular, you must make sure you have the proper visa (if you're not a Chinese national) and have legally established your business according to government guidelines before attempting to do business online.

You'll Need:

• "F" business visa
• Chinese business license
• Chinese "Organization Code Certificate"

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Suggestions

1. Visit a visa agency to obtain a Chinese "F" business visa if you have not already done so. According to the Chinese Embassy in the United States, the visa costs $130 for American citizens and is valid for between six months and 24 months from the date of issue as of August 2010 (see Resources). You must visit an agency if you currently reside in China, as individuals may not mail application materials to embassies in their home countries.
2. Register your business with Chinese government authorities if you have yet to do so.
3.  Design your e-commerce website. It's absolutely necessary that the website at least be available in Mandarin, meaning you'll need a translator at the bare minimum. By employing a Chinese web designer outright, however, you can help bridge any cultural barriers that might prevent your business from succeeding.
4. Launch your website and advertise in local publications. If your business is aimed at local Chinese, it's important that you focus the bulk of your advertising budget on Chinese-language publications and websites and, again employ a Chinese advertising professional or agency to help you in this capacity. If, on the other hand, your primary target is expats, you might want to advertise only minimally in Chinese newspapers and magazines and focus instead on English-language publications such as China Daily.

 

 

Some Cautionary Tips

• As of August 2010, foreigners who wish to apply for "F" visas must submit 2-inch-by-2-inch passport photos of themselves in addition to a completed visa application and a passport with at least six-months' validity. Chinese visa agencies will take care of the "Invitation Letter" requirement, although you may incur an additional fee for this service. Ask your agent for specific details.
• According to The Doing Business Project, you must first have your name pre-approved and deposit your business funds into a Chinese bank account. After having an auditing firm verify these funds, you must consult your local authorities for a Chinese business license and obtain their approval to make a "company seal." Obtain an "Organization Code Certificate" from the Quality and Technology Supervision Bureau, then register with the local statistics and tax bureaus. Open an "official" bank account and apply for authorization to print invoices and recruit from local career services centers. Register with the Social Welfare Insurance Center to complete the process. (see Resources)

 

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