Thinking of starting a business in China? Don’t step on these landmines!

“Hey, if you’re abroad dreaming of coming to China to start a business and make your fortune, the next 60 seconds could save you hundreds of thousands, in ‘tuition fees’ and countless legal headaches.”

Part 1: The Path to Entering China – Keep It Simple

“A lot of foreigners ask me: ‘Michael, I’m still in New York/London. How do I set up a company in China? Do I have to fly over and queue up?’

The answer is: No, you don’t.

You can start the process through ‘remote authorization’. You core need to prepare three things:

First, your notarized passport (proving who you are);

Second, the proposed company name and business scope (defining what you can do);

Third, proof of capital contribution for the registered capital (showing you have the funds to operate).

U can even on line do by yourself , your business license will be ready. Once you have the license, you can immediately apply for your work visa  for China. The moment you land in China with that visa, your company will already be legally in existence.”

Part 2: Laws and Regulations

Once the company is set up, what’s the biggest fear? It’s not knowing the rules.

Doing business in China, I’ve summarized for you the ‘Four Great Protective Charms’

Intellectual Property: Remember one iron rule —  It’s ‘Register first, promote later.’ Don’t post your logo or your technology patents all over the internet before they are registered in China. Otherwise, you’re just handing a gift to your competitors.

Labor Law: In China, you can’t just fire employees on a whim. Labor contracts are mandatory, and social security contributions are compulsory. Even if you’re the boss, if you pay yourself a salary, you have to pay social security on it. If an employee starts this month, their registration must be done during 30days. A single day’s delay is a violation.

Taxation and Capital:You want to legally repatriate the money you earn in China? No problem, but the prerequisite is that your ‘books are clean.’ You must establish a standardized financial system, and related-party transactions need to have reasonable pricing. Otherwise, not only will your profits be stuck, but you could also run afoul of criminal law.

Criminal Law Red Lines: When starting a business in China, there are several high-voltage lines you absolutely cannot touch. The two most typical are: commercial bribery (paying kickbacks can lead to prison time), and fictitious labor relations to obtain visas (helping a friend get a visa by ‘hanging’ them under your company . This isn’t just about fines; this can genuinely land you in jail.”

 “Many people see starting a company in China as a treasure hunt, thinking that as long as you find the gold mine, you’re set.

But in my view, China’s market legal environment isn’t an ‘obstacle course’; it’s an ‘ecosystem.’

Your job is to make your business model the best it can be. My job is to ensure you’re always speeding towards your goals on the safe track, without rolling over.

I’m Michael, a Chinese lawyer in Beijing the capital of china. If you have any legal questions about starting a business in China,or you want to know more details  feel free to contact me. In China, let our team be your ‘airbag.’ “