What Should You Prepare to Start Your Own Business in China?

Ask any small business owner is it difficult to start your own business, and you’ll likely get a wide range of answers. For some entrepreneurs aren’t good at running business, and have no experience of how to navigate through the complex procedure, it may be a difficult task. So what should you prepare to start business in China?

Have a Full Understanding of Yourself

The first think is your own mentality. If you want to get rich quickly, maybe you are not suitable for entrepreneurship. Entrepreneurship is a long-term process. Someone who is eager to make money is difficult to persevere in the earliest tough days of entrepreneurship. And this has basically become a common failure of entrepreneurship.

Secondly, evaluate how much risk can you afford to take. Entrepreneurship and risk are coexisting, especially under the fierce competition in the China market, people who think they can only succeed without failure may not be suitable to start business in China.

Finally is your strength and weakness. “If you feel you know and handle everything, then the problem is sure to come. Indeed, no one can be the master when it comes to setting up a company. Like Steve Jobs, he has his technology partner too. If you have technology, you need partners who know marketing and have resources, and vice versa.” Said Jack Ma.

Find like-minded people to start a business together

Many small companies often make such mistakes, they start their business without a complete and sufficient team.

l  Starting a business by your own, the failure rate can be as high as 99%

l  It will be better to start the business by couples or two friends, but if conflicts occured, it may be difficult to mediate

l  Starting a business by three or more people, remember to make a reasonable equity mechanism to attract employees and customers’ investment

Appropriate Startup Capital

As for the funds, the reason why I describe it as appropriate is because it requires entrepreneurs to balance the funds they can find with the funds they can afford.

Procedure of Starting Business in China

Step 1: Name your company. It is usually consist of four parts, including the administrative divisions + name + industry (not required) + organizational form. For example, Beijing (administrative divisions) + Bigdata (name) + Information Technology (industry) + Company limited (organizational form).

To improve the approval rate of company name, you’d better have 3 to 4 words for name part. It will be more difficult to approve for the 2 words name. Another suggestion is to ubmit more than one name for backup, you’re recommended to submit more than 3 names to ensure the pass rate.

Step 2: Submit Materials. You can choose either online or offline ways to submit materials. Remember to make a booking before you submit materials through offline way, usually 5 days before the submit day.

Step 3: Obtain the Business License.

After approval of your materials, you can bring the original notice of registration and your ID card to get your business certificate in the Trade and Industry Bureau.

Step 4: Stamp Carving. After getting the business license, you need to bring the original business license and the original legal representative's ID card to the designated department for record and carve the stamp. The seals received include: official seal, financial seal, contract seal, invoice seal and legal representative's name seal.

It looks like the registration process is not that complex, in fact, there are much more detail we haven’t elaborated here. So we would recommend foreign startup to find a local partner or agency to help them start business in China. WTOIP, as a sharing service platform with a focus on IP, provides comprehensive entrepreneurial and legal services to our clients, helping foreign tech startups launch their business in China with no legal hurdles. If you are interested in starting business in China, just contact us.