ChinaSetting Up an Import and Export Business in China for Foreigners Without Visiting

• Import and Export Business in China represents a highly favored structure among Foreign Invested Enterprises. Home to 1.4 billion people, China boasts a vast and unparalleled global market. Recently, Shanghai Port processed an astounding RMB 8.42679 trillion worth of imported and exported goods, maintaining its top-ranking status worldwide. It remains the world’s busiest container port with an annual throughput of about 43.30 million TEUs.  

• If you are considering tapping into the vibrant opportunities of the Chinese market, establishing a trading presence in mainland China could be a strategic move. For foreign investors, the local market regulations and registration procedures might initially appear complex and daunting. Tetra Consultants can help you navigate these challenges and successfully register company in China. 

Types of import and export business in China 

Export management company 

• A manufacturing firm in China seeking to export electronic equipment typically engages an Export Management Company (EMC). This specialized entity oversees the complete export journey, managing tasks such as distributor recruitment, marketing strategies, and logistical operations for shipping goods internationally. The EMC acts as a comprehensive facilitator, ensuring efficient and effective global market penetration on behalf of the manufacturer. 

Export trading enterprise 

• An Export Trading Enterprise, distinct from an Export Management Company, focuses on market dynamics by identifying buyer demands and supply needs. This type of company evaluates market requirements to match them with suitable domestic exporters capable of meeting those demands. By bridging the gap between demand and supply, the export trading company plays a pivotal role in facilitating international trade, ensuring that products align effectively with market demands. 

Export-import merchant 

• An Import/Export Merchant, often referred to as a free agent, operates by purchasing goods directly from manufacturers and subsequently selling them globally. Despite inherent risks, such as fluctuations in market conditions and logistics challenges, this approach can yield higher profits due to reduced intermediary costs. By assuming the role of a direct buyer and seller in international trade, the merchant navigates market complexities to capitalize on opportunities for profitable transactions across various regions worldwide. 

Steps for setting up an import and export business in China 

Step 1: Company prename approval 

• Tetra Consultants will help to preapprove the name of your company with the format requirement, such as “Shanghai XXX Import & Export Co., Ltd.” 

• Moreover, to globally protect your company name and brand name we can provide international trademark registration services. 

Step 2: Comply with pre-requisites 

• There are various requirements which are as follows: 

• The company must have at least one Chinese national as a director or shareholder. 

• Minimum 1 director and shareholder. 

• Appoint a qualified company secretary to handle administrative and compliance matters. 

• The board of directors must comprise of 3 directors using a chairman. 

• Mandatory requirement of registered office address. 

Step 3: Prepare necessary documents 

• Tetra Consultants simplifies company incorporation by handling essential tasks such as name approval, securing a registered office address, notarizing documents, and drafting a business plan. Trust us for expert legal support and a smooth setup in China. 

Step 4: Submit documents to SAIC 

• Tetra Consultants manages the submission of required documents to ensure a seamless incorporation process. We will handle interactions with key regulatory bodies and keep you updated on the progress.

Step 5: Arranging an office 

• Further, our experts will proceed to secure office space in the designated district for your company. According to Company Law, office requirements vary by business type. This address must also match the one listed on the Business License. 

Step 6: Register with tax authorities 

• Tetra Consultants helps ensure compliance with China’s tax regulations, advising trading companies to register as General VAT Payers and use Fapiao invoices, purchased and printed through the Tax Bureau. 

Step 7: Acquire licenses 

• After helping you register your business and secure state and federal tax IDs, Tetra Consultants will obtain all required licenses and permits, tailored to your location and industry regulations. 

Step 8: Bank account opening 

• Tetra Consultants will assist in corporate bank account opening in China, including Basic, Capital, or Foreign Exchange Accounts, and offer guidance on choosing the right bank for your company’s needs. 

Tips for import and export business in China 

Understanding the business etiquettes 

• Each country has its own rules of business etiquette, and some may be less formal than others during negotiations. When dealing with Chinese companies, it is not necessary to be excessively polite, especially when discussing numbers. Despite potential language barriers, avoid overcompensating with formalities or special considerations. Cultural sensitivity is less critical, treat them as you would a company in your own country. Showing excessive softness or sensitivity could potentially damage your business relationship. 

Decide the investments 

• Starting a small-scale importing business typically requires minimal capital. For larger ventures, carefully consider funding options. Private investors like friends or family may offer flexibility, whereas larger investors will require a detailed business plan and extensive paperwork. If borrowing is necessary, note that startup costs for importing businesses in China are generally lower. However, avoid assuming that a modest loan amount allows for a lax approach to seeking funds. 

Quality control 

• In China it is important to have SGS inspection done. It is generally offered by global companies to ensure the goods received match what was paid for. Language barriers and budget constraints can lead to unusable imports, wasting valuable resources. It’s crucial to verify that the supplier delivers the agreed-upon quality. 

Customs 

• Both importers and exporters must understand how customs operations function. Duties vary by product classifications, necessitating a clear understanding of where your products fall. If navigating customs procedures seems daunting, consider hiring a distributor or clearing agent with expertise in this area. Whether you choose to handle customs directly or through a third party, anticipate that customs clearance will be a significant and costly aspect of your business venture. 

Conclusion 

• Venturing into import and export business in China offers immense potential amidst its dynamic market landscape. At Tetra Consultants, we offer comprehensive services tailored to facilitate your market entry, including nominee director and shareholder services. Our expertise ensures compliance with regulatory requirements, facilitating smooth operations and maximizing your business opportunities in China’s thriving import and export sector. Partner with us to navigate complexities and achieve success in this lucrative market. 

• Contact us to know more about import and export business in China and our team will revert back in 24 hours.