China company establishment has been popular among foreign investors in the past decades, since China is a land of opportunities and the government also keep putting forward preferential policies to further open up. However, you can’t just strut to China and start a business. A lot of planning, paperwork, and procedures are need to be considered. If you neglect the differences, it is difficult to enter this vast market. Here are things you need to know when doing business in China.
Encouraged Industries
Encouraged industries are facilitated by the government. Entrepreneurs who invest in this sector enjoy tax incentives, lower land cost, ease of registration process and various other perks and benefits. Here is a list of encouraged industries:
- Construction industries;
- Accounting and auditing services;
- Operation of subways;
- Air transportation companies;
- Aged care institution.
Restricted Industries
If foreign investors want to participate in restricted industries in China, they need to follow strict guidelines regarding shareholding, ownership, and control of the company. Although the numbers of restricted industries have been reduced to 35 industry sectors, foreign investors have to follow multiple requirements before entering the restricted sectors. Automobile, education and medical industries are some of the restricted sectors of China, but over the years some of the restrictions have been eased.
Permitted industry sectors are open to entry and exit, whereas, prohibited industry sectors are off-limits to foreign investors.
Special Economic Zones
With an objective to liberalize the business community, the Chinese government has introduced multiple Special Economic Zones in China. It provides them with a free area to test policy, attract business and boost their economy. These economic zones are a clear signal for foreign investors to start investing in China.
Shenzhen Special Economic Zone is the first special economic zone established in the People's Republic of China. Seven other special economic zones were subsequently established. They are Shantou Special Economic Zone, Xiamen Special Economic Zone, and Zhuhai Special Economic Zone. Many manufacturers oriented towards export markets produce and assemble goods in the zone.
Office Location
A legal address for company registration, namely, the registered address, has always been a problem for Foreign companies doing business in China. Such address is the official, registered address of the company as given during the application process for the business license. Checking a China company address is a basic but important part of your due diligence process. Finding out where the company is official registered can help identify any red flags. If required, Tannet is able to provide such address for you.
Intellectual Property Protection
The Chinese market presents tremendous opportunities, but also fierce competition. As the level of development of the Chinese economy increases, brand effect and the fruits of technical innovation play an ever larger role in market competition. If these intangible assets are not protected, they could fall onto the plates of hungry competitors.
Enterprises must learn how to use the law, as a shield to protect their IP rights, and as a sword to attack infringers. Fortunately, as China has placed increasingly greater importance on the protection of enterprises’ innovations and brand building, the legal weapons available to enterprises have become more potent. Meanwhile, Tannet’s Intellectual Property Service Center is specialized in trademark, patent and copyright related services. Our professional consultants can offer you with one-stop solutions.
Consumer Psychology
There is a huge culture difference between Chinese consumers and westerns consumers. Unlike western consumers, Chinese consumers are quality and brand conscious. They want value for money and this need for superior quality sometimes takes precedence over brand loyalty. An average Chinese consumer is looking for affordable and quality products, they survey the market and cross-reference different websites for price and quality and then make a purchase.
Marketing tactics that were a huge success in the western countries may be a total failure in China. Know what you’re dealing with and only then develop a communication plan.
Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.
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