Starting a business in China
By Janet Melendez
The current entrepreneurial boom is not only larger than that of the mid 90’s but also much more diverse. It has become easier for entrepreneurs to start new businesses without quitting their day jobs. It is a natural reaction given to all the scary economic headlines, but slow downs don’t have to be barriers to begin a new business. Still with starting a new business always come risks. According to some reports, I have read in “U.S. small business administration half of small businesses fail within their first 5 years.” Among the challenges facing many businesses today are: tighter lending standards, higher prices of energy and food, and weak consumer spending. However, depending on your kind of business and location, you may find reduction in cost. Surplus may cut better deals, rent could be lower and workers may be more willing to work for less. When times are tough, people don’t hold for higher salaries. You could probably hire better people more cheaply starting out now that you could when things were booming. This is why a lot of businesses are importing goods or even starting business in other countries. Throughout this paper, I will explain the process that needs to be taken to start a business in China. I will also discuss the cultural and language barriers that are often encountered. First, I will start by letting you know the registration requirements including; timeframe and cost assoication. Orientation to the registration requirements were found at Doing Business.org website, which are the most important steps when starting a business.
According to Doing Business.org the following are the requirements:
1. Obtain a notice of pre-approval of the company name, 1 day, no charge 2. Open a preliminary bank account; deposit fund in the account and obtain the certificate of deposit, 1 day, no charge. 3. Obtain capital verification report from an auditing firm, 2 days, RMB 350. 4. Obtain registration certification “business license of enterprise legal person” with SAIC or local equivalent, 5 days 0.08% of registered capital (registration fee) + RMB for public announcement. 5. Obtain the approval to make a company seal form the police department, 1 day, no charge. 6. Make a company seal 1 day RMB 300.
7. Obtain the organization code certificate issued by the Quality and Technology Supervision Bureau, 5 days, RMB 148. 8. Register with the local statistics bureau, 1 day RMB 20. 9. Register for both state and local tax with the tax bureau, 10 days, RMB 100. 10. Open a formal bank account of the company and transfer the registered capital to the account, 1 day, no charge. 11. Apply for the authorization to print or purchase financial invoices/receipts, 10 days, no charge. 12. Purchase uniform invoices, 1 day, RMB 1.05-1.67 per book of invoices. 13. File for recruitment registration with local career service center, 1 day, no charge. 14. Register with Social Welfare Insurance Center, 1 day, no charge. (Doing Business.org)
The Chinese economy is considered by many to be the ultimate investment opportunity. Not only does it offer a market of up to 1300 million possible consumers, it also brings about massive annual growth rates. This is further strengthened by the fact that the Chinese government is doing everything in its power to continue to improve the investment climate for foreign companies by, among other things, continually spending large amounts of money on the improvement of the infrastructure. Here is a brief overview of the four main forms that a business establishment in China can take. I found this information in the “Go Wealthy” website it also gives you some information on the Chinese economy and the do’s and don’t of business in China. There is much information that one needs to learn about establishing a business in China. One must learn all the do’s...
Please join StudyMode to read the full document