Plan & Incorporate covers a surprisingly wide range of topics. Business is always complex, but it is substantially more so in China. Numerous legal restrictions and the strains evident in a developing economy complicate your entry and operation. That is to say nothing of the obvious: Language barriers and cultural differences. Below is an overview of each subcategory in Plan & Incorporate.
Why China? This is a question that more companies should ask before entering China. There are a number of misconceptions about China business – in particular, that China is a low-cost environment. In fact, it is a high-cost place in which to operate – especially if not executed properly. Companies should have compelling reasons to enter China, rather than feeling as though their competition is dragging them there.
Business Formation In many countries, forming a business entity is relatively straightforward. In China, this is not so. At a minimum, authorities need two months to approve the establishment of a foreign-invested company. The required period can be much greater. That is to say nothing of the time required to gather the application materials or draft shareholder agreements. This section gives the basics of business entities. In addition, it discusses the pros and cons of forming joint ventures with Chinese companies.
Laws & Legal begins with a wakeup call about the need to engage legal counsel during the initial stages of China planning. There are numerous restrictions on how you can invest, operate, and repatriate money. Getting the structure wrong at the beginning can be very costly to undo. This section also provides information on other laws and regulations that are vital to foreign investors. Finally, we have a brief catalog of some of the foundational foreign investment laws and regulations.
Negotiating is a sobering view of the ways in which negotiations are conducted in China and their impact on doing business in China. Above and beyond all else, it exhorts you not to plan on a quick trip to China to negotiate. Regardless of the matter, you are in for a lengthy and taxing experience.