As per McKinsey, China has added the identical scenario of the Australian financial system to its GDP in 2019 alone. And it’s gradually improving, no matter what’s happening in the outside world.

In light of this, it probably won’t come as a surprise China has become no. 1 destination for every foreign entrepreneur.

And, if you’re a budding businessman like me, you are probably thinking about establishing a company in China too. Keep reading to know more about how you should do it.

  How To Start A Business In China?

The process of starting a business in China isn’t too difficult, truth be told. And, if you follow the steps properly, you’ll be done with the entire process within a week or so.

Here’s how you can do it.

  Step – 1: Choose a Business Location.

Your business should be located in a place where you can get in the eyes of your audience. In China, Shanghai is considered to be the best location to do it for two reasons. These are –

●      The location encourages foreign innovation and business.

●      Various administrative controls are relaxed here.

●      Also, the office rental procedure is much easier and simpler than usual.

However, although Shanghai is an excellent place, you should always consider four aspects to ensure that you’re choosing the right location –

●      Logistical requirement.

●      Proximity to your business partners.

●      Talent pools.

●      Local Government rules and regulations.

Also, try not to discount the local culture either. It should be calm and welcoming. The people should be more explorative rather than cautious.

  Step – 2: Select A Name.

The name of an organization should be unique yet close to your branding. The better you form it, the easier it will be to remember you and your company. So, be strategic.

When it comes to choosing a name for a business, most people tend to work with a business organization. However, if you want, you can opt for an online generator tool too.

  Step – 3: Hire Staff.

Once you are done with choosing a name, it’s time to hire staff for your company. And make sure to ensure that whoever you are getting is Chinese.


Firstly, they can help you create a strategy with regard to the location, as they’ve been there all their life. Secondly, they can help with talking with local people and attract them to the company. And, finally, they will work much more professionally than a foreigner.

  Step – 4: Select A Legal Structure.

When it comes to starting a business in China, you can choose between three legal structures. Here’s what you need to know about them.

●      A WFOE: A WFOE, also known as a Wholly Foreign-Owned Enterprise, is a type of business established by a foreign party. It’s generally established without any direct or indirect involvement of the Chinese government.

●      Representative Office: Otherwise known as a Liaison Office, an RO (Representative Office) operates as a separate foreign company in China. These are usually prohibited from – importing and exporting, payment accepting, issuing Fapiao, etc.

●      Joint Venture: A Joint Venture, as the name implies, will have both a foreign investor as well as a Chinese one. Therefore, getting exposure to the local audience will be much easier. However, the risk of loss of brand is quite higher in this aspect too.

  Step – 5: Pay The Registered Capital.

Once you have chosen a legal structure, you must determine the minimum capital required for the registration. It’s a type of capital contribution that should be paid by the shareholder of the company. In general, declaring a capital amount of 1,000,000 RMB can –

●      Ensure governmental benefits.

●      Help streamline the business registration process.

●      Cover the initial operating expenses.

Finally, it can also help you solidify the legal structure.

  Final Step – Create Your Business Plan.

After you are done with everything else, start thinking about creating a business plan. While you are at it, here are some of the considerations that you need to keep in mind –

●      The location of the business.

●      The expected number of employees.

●      The projected revenue.

●      Budget requirements.

Apart from these, you should also create short-term and long-term goals for your business. The former will keep you on your toe, while the latter will be perfect for the development and growth of your organization. It can also help you manage your business accordingly.