Setting up an office in China is for most of the companies the next step in their development as an organization. Having an office in China makes purchasing departments able to gain major profits out of their purchasing and supply chain. Having an office when exporting to, selling and doing business in China means you can serve your clients within China in either sales or after sales way.

Difficulties of official registration

To officially set up an office in China, the bureaucratic path to walk is long and not without bumps on the road. It takes an estimated period of at least 6 – 12 months from starting the process till receiving your official business license.

This application period involves multiple works of arranging by Chinese government standard legalized passport documents of stockholders, banking statements, official translations by Chinese government authorized notary offices, credit statements, choosing business scopes, appointing an official local monitor, filling in bookwork’s of forms and sign dozens of pages separately each one by one. This being a selection of even more subjects that are required to be arranged within the process of the registration to officially set up your own (WFOE) office in China.

Besides the business registration, setting up your own company in China requires a full investment amount of at least ca. 100.000 RMB for a service company and for a trading company at least 500.000 RMB. The investment of this amount also requires another bureaucratic path to follow for the investor(s), to open the bank account(s) and another separate specific bank account to officially send the investment amount for officially recording your investment.

Supplies, resources, and requirements besides registration

The registration process is a long path to follow. However, a registration is just to receive your official business license. To set up your actual office will require more work to execute. A few examples are:

– Application for your tax account
– Application for your bank account
– Application for internet banking
– Finding a suitable office to rent
– Finding a suitable bookkeeper/accountant to do your bookkeeping and/or tax applies
– HR / Finding suitable employees
– Arranging office resources
– Arrange a work permit and temporary residence visa for your foreign manager (If applicable)

When the above is arranged, we can conclude that your office has all the resources to be able to run and operate.

Obligations and structural costs

As mentioned above, setting up and office will require certain base resources. Finding a suitable office to rent, hiring an accounting office to do your bookkeeping and/or tax applications.
You will need to hire local staff and therefore need HR knowledge and resources, hold interviews and create labour contracts. Besides having employees contracted, you will commit yourself to the obligations coming with all contracts that you will sign.

Obligations like the payment of salaries of local and commitments to pay social insurance and labour taxes. Maybe foreign staff will be needed and will require higher salaries and arrangement of work permits. Administration of working hours and management of your employees will be taking time and costs.

Meeting also obligations in the payment of office rent including office resources such as internet, electricity, management fee’s and so on. Payment of third parties such as an accounting office to support your bookkeeping and/or tax applications. Help from third parties in operations and to comply with the business rules and engagement in China. All structural costs and obligations for you. Time and work are taken from your organization.

Alternative (CIL China solution)

The best alternative for setting up an office in China is to use another already existing company in China. Open your own office within the CIL China organization. Use the CIL office, resources, infrastructures, and business license to run your own office in China. By hiring the suitable people on CIL China’s payroll, your office can be up and running within 1 week.

Advantages of the alternative

Opening an office within CIL office saves for your time, work and more importantly money. By using the already existing CIL office resources and infrastructures you win at least 2 years of development and startup investments. CIL China her resources are are accessible for you and your employees to gain directly profits from local resources in China. No need to hire a foreign manager or arrange work permits as foreign management is offered by CIL China. Where your employees are well supported with knowledgeable and experienced colleagues to help with issues or questions.

Flexible office

Setting up an own office in China will at least need 1 to 2 years of development before it operates properly and profitable. With CIL China’s alternative, you are able to set up and operate your office in China based on a yearly contract. Every year you will have the option to close down or proceed with your office in China. Which makes your organization and finances flexible.

No operational obligations

When choosing to open an office within CIL, you will not meet any obligation involving running an office in China. CIL takes care of all bureaucratic work, payment of employees, payment of company resources, administration and so on. You will have your office operating by the only commitment of a monthly payment. The rest is taken care off.

More information? Download our business cases related to this solution.
Business case – Purchasing office – Download here

Or contact us for any questions or enquiries.
CIL China.