By 2030, the World Bank predicts that China is going to be the largest economy. Indeed, a lot of investors have realised this and made frantic moves to open companies in the rapidly growing economy. Apple, MacDonald’s, and Volkswagen, among other top brands, are already in China, and you should not be left behind. To take advantage of this high-potential jurisdiction, you need to start with a WFOE set up in China.
However, we must say it is never easy. A WFOE set up in China comes with a wide range of challenges, and it is important to know how to address them. Keep reading to learn more about the benefits and challenges associated with registering a company in China. We will also tell you the main steps you can take to overcome the challenges of registering a company in China.
Benefits of Registering a Company in China
Before looking at the challenges associated with a WFOE set up in China, let us start by looking at the main benefits. The most notable is the large market of over 1.4 billion people. So, whether your current market back home is dwindling or the government policies are not favourable, it is time to move to China because it has more opportunities.
Other benefits of a WFOE set up in China include:
- A company registered in China can also easily access the rest of the Asian market.
- The Chinese government provides a lot of support to help companies grow faster both locally and globally.
- A large pool of talented and qualified labour.
- Numerous opportunities to cut down taxes and optimise profits for registered WFOEs.
- Highly developed infrastructure.
- Stable social-economic environment.
Challenges that Come with a WFOE Set Up in China
The list of benefits that comes with a WFOE set up in China is way longer than the one we provided above. However, you need to be able to overcome the following challenges when registering a company in China.
- Preparing a Long List of Documents for Company Registration
To register a company in China, you are required to prepare a long list of documents, which are used to determine if the request will be approved or declined. Often, these documents are challenging to prepare, especially for people without a background in law and knowledge of the Chinese market. Some of the toughest of these include feasibility study reports, articles of association, and register of controlling shareholding.
- Dealing with Multiple Departments During Company Registration
Unlike other jurisdictions where company registration mainly deals with a single registry, China is different. Here, you have to work with multiple offices for your WFOE set up in China to be approved. Some of these departments include the Ministry of Finance, the Public Security Bureau, The Tax Bureau, and the local Administration of Industry and Commerce (AIC). Dealing with all of these during registration is a major challenge because each has varying requirements.
- High Cost Associated with Company Registration
Often, registering a company in China is a major challenge because of the associated costs. If you are doing it alone, this will require multiple flights to and from China, which can push the cost even higher. The process of identifying a good office, especially if you are not conversant with the country, is also pretty challenging.
The good news about WFOE set up in China is that you can overcome these challenges pretty easily by working with an agency of experts. Primasia, one of the leading agencies of experts on matters of company registration in China, is waiting to assist. Indeed, the experts will not only help with business registration, but you can also count on them for other executive services, including payroll management, accounting, and filing tax returns.