The People's Republic of China has become one of world's most exciting emerging markets. With its massive population of over one billion people, economic growth rates in excess of 8% sustained for the past 15 years and low labour costs, more and more companies, both large are small, are looking to establish and develop business in China.
These operations are generally looking to operate in two principle areas:
- Sourcing or production of goods for export. China's low-cost, and increasingly sophisticated, workforce, combined with excellent transport services and a successful track record have resulted in "Made in China" label becoming ubiquitous on a diverse array of goods;
- Provision of raw materials, technology, sophisticated goods or professional services to the rapidly growing Chinese market. Car ownership rates are growing at nearly 50% per annum, Internet usage is second only to the USA and the urban powerhouses of Shanghai, Beijing, Guangzhou and Shenzhen are generating huge demand for all levels of consumer goods.
The complexities of entering the Chinese market can at first seem bewildering. The usual concerns such as business viability and costs structures are compounded by the need to choose from an unfamiliar menu of entities - such as Representative Offices, Wholly Foreign Owned Enterprises and Joint Ventures - each with its own set of operating restrictions and tax treatments. Furthermore, within China, there are literally hundreds of special economic zones, offering special rates and differing tax concessions, from state to state, city to city and, even at times, from district to district.
China divides foreign goods and services into three categories - encouraged, accepted and prohibited - all of which can require a distinct approach. China's legal and accounting systems are also run on very different
lines to the West and reliable information is not always easy to find. On top of this, China is rapidly overhauling its legal, financial, accounting and tax systems to meet international and internal reform programmes.
All in all, the potential investor could be facing a daunting task. In order to assist our clients to progress safely and surely through this maze, UJ has set up a team of highly experienced China experts to assist in all stages of China entry. Our integrated approach ensures that clients make the right choices at every stage from identifying the best location, operating structure and, if required, joint venture partner, to recruitment of key local and expatriate staff.