Despite all of the differences that exist between the U.S. and Chinese markets, there are several aspects of forming a business that do not change.
One of the most important aspects business owners must consider carefully is the location of their business. Business owners must ensure that the location they choose serves their business’ needs and complies with Chinese laws and regulations.
Here is a brief overview of critical details business owners should evaluate when choosing the right location for their business.
1. Find a city that supports the industry and offers growth
Similar to the United States, different regions in China offer specific support to different enterprises. For example, California’s Silicon Valley has become a hub for big tech companies and start-ups. Big cities such as Beijing and Shanghai provide a similar kind of support for tech companies or manufacturing businesses.
However, Forbes reports that several second-tier cities provide more opportunities for growth. Some of these cities include:
- Dalian located in the northeast
- Wuhan located in central China
- Chongqing, in the southwest
Regardless of the city business owners choose, they must ensure that it has specific zones allowing their business to operate in that area legally.
2. Research the demographics
When selecting a city to establish a business, business owners must also research the demographics of the area. This is especially critical if businesses:
- Expect to hire local employees
- Plan to provide goods to local consumers
Taking the time to learn more about the local culture can be a fundamental step to success.
3. Consider transportation needs
According to Inc. Magazine, it is critical for business owners to evaluate the details of their business’ transportation needs when choosing a location in China. For example, business owners should determine:
- How they will transport imports and exports, if necessary
- Where they will conduct sales and where they will manufacture goods
- Whether they should be near a port
It is essential to consider these needs and logistics before making the final decision about a property.
4. Obtain the proper documents
Once U.S. business owners choose the property that meets their needs, then they must obtain the legal rights to use it. This can be a complex process. It might be helpful to work with an attorney or another official knowledgeable in Chinese business laws, to ensure that businesses obtain the proper:
- Rental agreements;
- Commercial leases; and
- Registrations.
Ensuring that businesses comply with Chinese laws is essential to help businesses start on the right path to achieve success in the Chinese market.