Every entrepreneur is headed to China. It is like a gold rush, and the impressive thing about this jurisdiction is that you can never go wrong. For about 40 decades, the country’s GDP growth has grown at an average rate of more than 6%, reaching 8.5% (2021 estimate). In 2021, the country’s nominal GDP growth reached US$16.642 trillion, which is only second to that of the United States. By 2028, China’s GDP is expected to surpass that of the United States. All of these numbers show a jurisdiction with huge potential for investors and you better grab the opportunity right away and expand your company there.
As you embark on a journey to set up company in China and, indeed, to the entire globe, be prepared for major challenges. Like other countries, a significant number of businesses coming to China still fail, especially in the early years. This is why you need to be prepared, and the best way to do this is to understand the challenges on the way. Keep reading as we highlight these challenges and the best solutions.
Set Up Company in China: The Main Challenges
The main challenge associated with setting up a company in China is the fact that the process is lengthy and requires a lot of documents. Again, it involved dealing with multiple offices, from the Ministry of Commerce (MOFCOM) to the Public Security Bureau (PSB). If you are not conversant with the Chinese company laws, it can be pretty tough. Other challenges include:
- The process is pretty expensive: The process of setting up a company in China can be pretty expensive because it requires you to pay for various licenses and make multiple trips to China (how to be compliant in China?). In addition, you will be required to search and lease offices, acquire equipment for operations and have ample funds for startup.
- Creating strategies for entry is never easy: Since you are getting into a new market, everything, from the market setting to supply chain, might be completely different from what you are used to back home. If you try to work out new channels, supply chains, and networks, it can be pretty challenging because a lot of time and money will be needed.
- Selecting the right staff for a new company coming to China is never easy: Although China has an abundance of educated and talented workforce, identifying the perfect ones to work on a new startup is never easy. It can also be pretty expensive as you have to run ads and conduct interviews to pick the best candidates.
- Handling business functions such as payroll and accounting can be challenging: When you finally register your company, a lot more challenges await. As you work extra hard to make the business grow, functions such as payroll management and tax matters can quickly be relegated to the back pages. However, you need to get them done correctly and in line with the law.
These are only a few challenges that face almost every investor coming to set up company in China. The best solution to these challenges is working with the best company set up professionals in China. If you can bring them on board early enough, they can help you with company registration, ensuring you complete the process efficiently and affordably. They can also assist you to craft strategies for success and handle your executive functions, such as payroll management.
The challenges along the way when you decide to set up company in China are many and can easily dim your focus on growth. This is why you should always work with professionals that have assisted other companies to successfully expand to China. These experts know what works and what does not and will be there to guide your business to success. With professionals on your side, you can never go wrong.
For more articles, visit OD Blog.
