There are rules and regulations for companies interested in doing business in China. The rules or the factors to consider before investing in this country are as follows.
Foreign investment rules: A company should look for the application procedure for establishment of any investment in the country, the period an approval for operation in the country takes, registration requirements and the conditions for an investor must meet to invest in the country as well as the conditions specific to the country’s regulations, for example, the area of land for use is only restricted to a certain number of acres.
An investor should also consider any documents that will be required for the type of enterprise he/she or the organization wants to set up. Documents can be such as the article of association, study reports, audit reports, documents giving rights to use certain land, compliance documents, and any other relevant reports that would be stated of importance to the Chinese.
According to the rules in China, an investor has to contribute capital and have a minimum registered capital, an investor should know the conditions, rates, or manners in which these contributions are made.
Under general trade, there are certain considerations too. The licensing and quota control that deals with what is to be subjected to licenses and quotas. An investor has to consider import quotas and licensing according to the category the imports belong to. Export quotas and licensing are also to be considered.
China has foreign exchange control systems that have rules for investors, so the company with interests in investing in China should look for the requirements for this kind of control.
Other factors an investor should look into are, the rate of tax levying and areas of exceptions, import and export taxes, the management of customs of the enterprises according to each category, the tax categories with the payment periods, rates of payment, and computation methods, and the foreign exchange requirements, for example, the registration of the enterprise with the foreign exchange body of China.
Chinese Culture
This is of importance too when an organization is interested in investing in China. Chinese culture in the business world considers the appearance of a businessman, behavior, and manner of communication. In appearance, the main factor to look into is the dress code which differs according to gender, business meetings, and color. The behavior involves how a person handles himself or herself according to the Chinese culture, in China certain things are not suppose to be done, like pointing at something, dropping eating sticks, presentation of gifts with certain unwanted colors, and many other cultural behaviors.
The last one is the manner of communication in the business world. Different gestures have various meanings, so a foreigner should know the meanings. Certain things should not be done too when communicating like nodding the head for a sign of greeting and not shaking hands, observing time, and making appointments for businesses. An investor should therefore know the accepted manner of communication in the country.
Other findings
When doing research on the factors to consider when the company wants to invest in China, the researcher should act professionally and stick to the role he was given to research the factors. These policies are important too to the CEO and the researcher can write them in a separate report to let the CEO know of the steps he will make when venturing into the country for investment. This can affect the CEO’s decision so the researcher needs to note them down and notify the CEO of other findings apart from the main aim of the research.
References
A Fact Book on China. (2008) The Cultures in China and Working in China: A Teaching Website.
Business in China, (2008) Requirements of Doing Business in China. An Extract from Business in China Guide.