Business in China

Question

My client wants to set up an operation in China as a reseller for products like IT Servers, Storage and Networks.

They want to set up a company and appoint a Sales Person in Shanghai.

Want to get an indication of the process and costs of setting of a company in China as well as any potential obstacles.

Answer

The cost of setting up in Shanghai will be tremendous, but it’ll be also simpler than other places in China. You need to have someone who has relation network locally there to help you setup the company. It’ll be more complex than in the UK. The potential obstacles I can foresee now will be the human resources. You’ll find hard to employ someone who’s professional, hard working and loyal to the company. You’ll also need to know some culture background in order to setup your market quickly. My company provide full scale support to British companies who’d like to explore the Chinese market. Contact me if interested.

Answer

Sash –
I can appreciate why your client wishes to work in China as the markets are building and developing more than anywhere else. The first consideration though is to establish if your client is better to actually be in China or work and sell into China from a Hong Kong base.
I am currently in Hong Kong with our partner company that provides tax and compliance advice as well as structuring a company’s market entry to China. They would give them all the advice they would wish and they have an office in Shanghai.
Would you like us to get in touch with your client or do you wish to discuss yourself?
Please let me know and your email/tel number. My contact is brian.mclean@meridian-mkt.com.
Thank you.
Regards, Brian

Answer

As previous respondants have indicated, the cost of setting up an office in China will be great, especially in Shanghai: also the administrative side of things can be complex, depending on what type of presence you want to set up. I would strongly suggest that your first point of contact should be the China Britain Business Council (CBBC). They have offices throughout the UK & China, and should be able to give you lots of useful advice.

I am no expert, but I did look into opening a Chinese office a year or two back, and it wasn’t cheap or easy. I don’t know if the rules have changed now, but at that time you could either open up a full commercial office or a representative office. The full commercial office is very complex, but should be able to engage in all functions, including sales, billing, collecting payments from clients. A representative office would be suitable for having a sales presence on the ground, but cannot conduct sales transactions or remit currency.

Also, don’t expect the cost of staff to be cheap. Even a new graduate can command good salaries (comparable with some EU countries).

You would also need to look into the issue of repatriating income from sales.

Definitely recommend CBBC as your next step.: http://www.cbbc.org/

Menu
Export Action Plan