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Mainland Contains Challenges – SCMP features commentaries of The Executive Centre’s Communications Director

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Gigi Liu, Communications Director at The Executive Centre commented in an SCMP interview on the challenges when setting up businesses in China and how serviced office provider can help.

Monday, March 18, 2013. Directory, SCMP.

Mainland contains challenges

Setting up a business across the border can take up to six months

The mainland and Hong Kong not only pursue “one country, two systems” policies, they have two vastly different business licensing systems.

The mainland is not an easy place to do business in, and it is getting more difficult to do so, given the tightening of loopholes in line with international practices.

Gigi Liu, spokeswoman for The Executive Centre, says: “Unlike Hong Kong, where establishing a company is straightforward and can be completed within a week or two, setting up a business in China can take six months.”

In Hong Kong, the basic process of corporate formation involves a number of key steps. This includes determining the company’s name and structure, such as a limited company, a brand office or a representative office; and performing a name search on the government’s website to ensure there is no name duplication. Businesses such as restaurants, travel agencies or fund managers require an operational licence from the regulating authority.

The next step is to appoint directors, shareholders and a company secretary, then submit these details to the Hong Kong Companies Registry for incorporation. Business registration, opening a business bank account and getting an office complete the process.

Liu says: “There are four specific issues that businesses need to consider when moving to China. They are industry status, registration classifications, local rules and registration period.”

The level of difficulty in setting up a business depends on the type of industry. Certain industries are encouraged while others may face restrictions or be prohibited. Businesses planning to invest on the mainland should identify what their industry status is as the situation is prone to change.

There are several different registration classifications for foreign companies doing business on the mainland, such as wholly foreign-owned enterprise, joint venture, representative office and partnership enterprise.

Local investment rules are not uniform across the country. In the less developed areas, and central and western regions of China, where the government is trying to encourage investment, regulations may be more favourable to investors.

It typically takes four to six months to register, depending on scale and industry. Although some well-connected officials or consultants may be able to arrange permits quicker, such speed may result in the violation of some mainland laws and regulations.

“Working with an established serviced office provider can speed things up,” Liu says. “Apart from the one-stop shop company formation services, firms and entrepreneurs looking to have an immediate presence can also benefit from fully furnished and well-equipped serviced offices.”



 

About The Executive Centre

The Executive Centre is the leading premium serviced office provider in Asia Pacific with over 80 centres in 21 cities. Founded in 1994, it operates in Hong Kong, Beijing, Chengdu, Shanghai, Tianjin, Shenzhen, Guangzhou, Macau, Taipei, Tokyo, Seoul, Singapore, Jakarta, Bangalore, Chennai,Pune, Mumbai, Gurgaon, Brisbane, Perth and Sydney. The Executive Centre provides serviced offices, virtual office representation services, meeting and conference facilities, and business concierge services to multinational corporations, small and medium enterprises, and start-ups locally, regionally and internationally. Please visit our Web site at www.executivecentre.com

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