Company Formation in China: The Importance of Research

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If you take a closer look at the performance of the Chinese economy, it is near magical. Before 1980, China used highly protective policies, which strongly shielded local firms and discouraged foreigners. But the country took a turn around, with key pro-business policies that saw the country report economic growth of 14.2% in 2012. With the shift in policy, a supportive regime, and an educated workforce, one can only describe the country in one way – a jurisdiction that is destined for greatness. 

For entrepreneurs, China is the ultimate place for investment, but how do you go about it? To join this fast-growing economy and move with the tide, you need to do two things; carry comprehensive research, incorporate your business there, and adopt the right strategies. In this post, we will take a closer look at the research to determine why it is so important in company incorporation and success. 

Identifying the Best Region for Business Location 

Whether it is in China, Europe, or America, it is crucial to put a lot of effort into determining the perfect location for business. Do you place the business in the major cities or rural areas? When researching the location, you need to factor in things such as tax incentives, proximity to the market and source of raw materials (for manufacturers). 

For example, it might be a better idea to place your manufacturing business in free trade areas to enjoy government incentives, such as low cost of power and reduced tariffs. Also, locating your business away from the coastal cities might come in handy to help you enjoy lower taxes. To increase the chances of getting a better location when registering a company in China, consider working with an agency of experts.

Selecting Potential Partners

If you will be forming a joint venture (JV) in China, the process of identifying the right partners can be challenging. Because the partner is required by law to hold controlling shares in the venture, it is crucial to get a person who is business-oriented, honest, and focused on growth. Identifying a partner with these traits can never be easy. Indeed, it might be a good idea to start by incorporating a representative office (RO) for the purpose of scouting for a potential partner. 

Studying the Market 

When thinking of China as a business destination, it is easy to see it as a single market that one can just hop in and start operating, but that is not true. Indeed, you will find that different sections of the country have unique attributes that define them. Even the cities are different, and it is important to start by researching them to establish what they want. For example, you might have a product that will work very well in the cities but not in the rural areas. 

Seek Help from an Agency of Experts 

The three things that we have listed in this post are only a few of what you might want to know. In addition, it will be a good idea to research the competitors and the products they are offering. Then, craft a way of making better products. To get it right with pre-investment research and company incorporation in China, you should make sure to work with an agency of experts. These professionals have been in the Chinese market, helped other companies become successful, and can tell you what works and what does not. Why go it alone when a professional like Hawksfordis willing to hold your hand. 

Company registration in China and successful operation depends on the research you do and strategies adopted in business. By working with experts and doing comprehensive research, you will be able to optimize every opportunity and increase the chances of success for your business.