Setting Up a Business in China @ Asia Business Set Up

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Setting Up a Business in China

China is currently the world's 3rd largest economy in the world (after the USA and European Union (EU) bloc), even though the World Bank classifies it as a low-middle income economy. Investors choosing China business formation leverage a combination of i) low operating costs ii) abundant labour and natural resources and iii) an economy growing averaging more than 10% growth in the last decade. However, these positive characteristics are tempered by the challenging nature of doing business in China and complex and inconsistent China business formation procedures. The following is an overview of China's economy and its impact on international entrepreneurs:

Despite the difficulties of starting a business in China, many global investors choose to set up a business in China to tap the huge opportunities offered in one of the world's fastest-growing economies.

China is now the world's leading recipient of foreign direct investments (FDI) among developing countries and is a reason why many foreign investors are starting a business in China. In fact, there are waiting lists to set up a business in China in selected regions.

Although starting a business in China is difficult, recent changes to Chinese business law ßhave simplfied the procedures required to set up a business in China.

Since its accession to the World Trade Organisation (WTO) in 2001, China has made substantial legal and regulatory progress. In short, investors starting a business in China now receive better protection for intellectual property rights. Increasing numbers of investors are being encouraged to set up a business in China.

In 2004 China and Hong Kong signed a Free Trade Agreement, called the Closer Economic Partnership Agreement (CEPA). The agreement has opened the Chinese market to Hong Kong-based businesses, as well as encouraging manufacturers to set up companies in China since Hong Kong services are now available to Chinese manufacturing facilities.

Despite the obvious potential of China, investors planning to set up a business in China should be aware of the many challenges which remain, including:

Bureaucracy - China is still a developing market and despite the great economic and regulatory strides it has made in recent years, the process of setting up a business in China remains complex and time-consuming.

ii)

Protection of Intellectual Property Rights - a key concern when starting a business in China is the protection of Intellectural Property Rights (IPR). Under the terms of its accession to the WTO in 2001, China is a signatory to the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. However, concerns remain among those who have started up a business in China or those planning on starting a business in China about the effective enforcement of IPR protection laws in the country.

Contact Us

For more information on forming a Company in China, email email@healyconsultants.com or call us in Singapore (+65) 6735 0120

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