In late March, TIAG Member ESV Accounting and Business Advisors and TAGLaw Member Piper Alderman held a seminar on Doing Business in China, providing valued clients and guests of the two firms with an overview of the current business environment on the ground in China.
The seminar was presented by Russell Brown OBE, Director and Treasurer of the Australian Chamber of Commerce in China and Managing Partner of TIAG Member Firm, Lehman Brown, a China-focussed accounting, taxation and business advisory firm.
Russell shared his expert knowledge on the Chinese market, having helped establish and develop businesses in China for the past 28 years. Below is a snapshot of Russell’s insights from the seminar, including key operational challenges, local rules and cross-border risks of doing business in China.
CHINA IN NUMBERS
In terms of GDP, China is significantly larger than any other marketplace in the world. It is currently forecast to be the largest economy in the world by 2030, with an estimated one billion middle class consumers and over two hundred cities with populations in excess of one million. As a result of this incredible growth potential, there are significant opportunities for businesses looking to launch in the Chinese market.
SETTING UP THE RIGHT WAY
There are various regional and economic factors to consider when establishing your business in China. Getting a foothold in the right area for your business is crucial – companies that overextend themselves too quickly often close down.
While cities like Beijing and Shanghai are expensive places to live and carry on business, the Shanghai free trade zone is currently one of the fastest and simplest places to set up a company. China has announced plans to establish additional zones over the next year and there are opportunities for businesses within certain industries that the government wishes to grow.
Apart from location, set-up issues to consider include but are not limited to:
- Place of incorporation – enabling access to zone or regional specific business incentives;
- Investment holding structure – direct holding vs offshore holding;
- Choice of entity – limited liability company vs Chinese holding company, amongst others.
