Why a good partner is important for Foreign Startups, when they start business in China?
- June 11, 2018
- Posted by: Yolandy
For a long time, China’s huge commercial market has unlimited possibilities for investors. China has advantages that cannot be ignored in terms of industry support, market potential, and high-quality human resources. With the promotion of the Ministry of Commerce, a more fair, transparent, and convenient foreign investment environment has been created, allowing China to always become a hot area for foreign investment. More and more Foreign-funded Enterprises continue to invest in the Chinese market. For investment, China’s huge investment market, in addition to its infinite attractiveness, also has unfamiliar with the environment and its confused of business procedures. At this point, a well-matched partner is crucial in this important business decision. In this article, Tanikawa will explain to investors the importance of partners for investment companies in the following points: Regional Analysis To a large extent, choosing a professional investment consulting company as a partner can help companies do in-depth market research and regional analysis. The importance of these two reports during the preparation period for the enterprises investment is undoubted. In the decision-making process of Foreign-funded Enterprises in the investment region, the intention region’s economic level, infrastructure, labor costs, market development, policy preferences, and the degree of foreign capital concentration will be the importance focus of decision-making considerations. At this time, the role of the partners is to conduct the most realistic and direct in-depth research and analysis for Foreign-funded Enterprises in terms of these decision-making factors, so as to help companies obtain local detailed information at the first time, so that making the most favorable decision for investment. Governmental Policies Under the guidance of policies, enterprise can understand the direction of the government policies in more directly and accurately way. It also will understand the market to a large extent, so that they can produce products that is more in line with market demand. Therefore, there is an interdependent relationship between the government and the enterprise. The government’s preferential support policies involve various aspects such as departmental investment promotion, taxation and fee reduction, financing support, optimizing the environment, and attracting talents through employment, which directly or indirectly promote the healthy development of the company. In China, different regions and different industries have different levels of support, preferences and restrictions in policies. When a Foreign-funded Enterprise plans to operate a company in China, no matter which industry it engages in, which area it chooses, the policy, it is a factor that cannot be ignored. So, to large extent, having a partner for a foreign-funded enterprise can help Foreign-funded Enterprises to understand the specific industry policies in the intended area, so that to gain the greater support for the policy. And most importantly, the partners can help Foreign-funded Enterprises to communicate with the local government in order to reduce the waste of time and communication costs caused by the untimely communication. Choosing Location For enterprises, the choice of company location is after the choice of the intended region. The choice of location is a more specific decision. The main deciding factor of this decision is the enterprise belongs to which industry. For example, for the manufacturing industry, it needs a production workshop. At the same time, it needs to consider whether it also needs a warehouse, what products it produces, what kind of transportation tools it needs, that determines its location needs to be near the highways, railways or ports. Therefore, a partner who is familiar with the local transportation is particularly important in this decision-making. Registration Procedure As we all know, compared to other countries and regions, the Chinese enterprise registration process is relatively complicated. Wholly Foreign-Owned Enterprises, Sino-Foreign Joint Ventures, Sino-Foreign Cooperative Enterprises, or setting up Representative Offices in China, each type of enterprise means that they have to go through different registration procedures and prepare different registration materials. These preparations are complicated for foreign companies. And in the process of handling the company may encounter various issues, for example, which documents need originals, which documents need to be copied, what kind of official seal needs to be handled, how to communicate with government departments, and so on. On these issues, choosing a professional investment consulting company as a partner is a very favorable decision. Tanikawa as the professional investment consulting company in China, will provide the full service process of investment for Foreign-funded Enterprise.