Doing Business in China-Part One:
China is a long-established powerhouse on the global business stage; it boasts the world’s second largest economy by nominal GDP and the largest in terms of purchasing parity. Despite recent trading conflicts with other major economic players such as the US, China’s ambitious future plans such as the Belt & Road Initiative ensure it remains a key target destination for many organisations looking to grow their international operations.
As a vast country with contrasting landscapes and some of the largest, most populous cities in the world, organisations looking to set up entities or operations in China have their work cut out in choosing the most appropriate location for their new enterprise. The considerations are manifold, not least in determining the city with the best quality of life if expatriates are seconded there during the initial set up. In recent years, two key areas have risen through the ranks of Mauve’s “most requested” locations in the country, in line with growing business trends in the region; one, a famed global financial centre, and the other a vibrant new upcomer that is perhaps not the most obvious location to an outsider weighing up their options.
In this two-part article, we look at the benefits of Shanghai and Shenzhen as potential locations for your global expansion and the services Mauve can provide to smooth the way for your organisation’s growth in each city – starting with Shanghai.
Shanghai: China’s City That Never Sleeps
Shanghai is an established domestic and international business capital, topping Forbes rankings for Best Cities for Doing Business in China on multiple occasions. It is the world’s most populous city and is viewed as China’s cosmopolitan cultural centre as the home of Chinese cinema, art galleries, fine dining and fashion houses – it has been modelled by the Chinese government as the “New York of China” and as a result, embodies an aspirational appeal to Chinese middle classes and expatriates, of which there were more than 150,000 officially registered in 2018. The city is renowned for its juxtaposition of old and new, illustrating its historic growth from a small trading port into a bustling global metropolis.
In business terms, Shanghai’s ongoing appeal is clear – the income bracket is higher in Shanghai than other parts of China, meaning that quality candidates flock to the city for the highest status positions and best salaries. It is an established logistics hub, with a key shipping port and positioning on the central coast, contributing 25% of the country’s imports and exports. The city is also making reforms designed to attract foreign investment – power efficiency and enterprise bureaucracy has been improved, and processing timescales for starting a new business locally are being reduced by half. As a result, foreign-funded projects were up by 69% in the first quarter of 2019 just as electric vehicle giant Tesla broke ground on a new factory in the city.
How Can Mauve Help?
Mauve provides a wide variety of in-country services in China that can help you hit the ground running when you expand your business ventures locally. The following solutions and services are available to you in Shanghai.
Global Workforce Solutions/Employer of Record:
We provide this service in Shanghai and Beijing, employing your workers via our local in-country partner to ensure they are working compliantly in-country with rapid onboarding timescales.
All expatriates will need to apply for the business visa commonly referred to as the Z-visa. There are other business visa types available, but they are generally unsuitable for the purpose of work. Upon entry into the country, our local partner will assist with all the procedures required for applying for a residence permit and registering with local bureaus. Once a residence permit has been issued, the individual may officially start work in China.
Mauve’s payroll team and in-country partner will ensure your workers are paid a local yen salary with clear reporting, advice on their salary contributions and tax return assistance. Both expatriates and Chinese nationals will be placed on our partner’s local payroll – payroll registration is required for both locals and expatriates.
Global Business Expansion:
Mauve and our in-country partner can assist your company to set up its own compliant entity in Shanghai; from helping you to decide on the right entity type for your business activities, to paperwork and application assistance.
Project Management: end-to-end support managing your overseas projects – market research, local sales and marketing assistance, events planning etc.
Value-Added Services: full range of in-country relocation and destination services.
Consultancy Services: risk assessment, contracts, local employment and HR advice.
Next week, we’ll be exploring a Chinese business destination that is rising in popularity with international investors – the vibrant city of Shenzhen. For more information about our solutions and services in Shanghai, get in touch with our local APAC expert Lucia Tan via the Contact Form.
The information provided has been checked for accuracy as of the date of publication, and is intended as a general guide and for information purposes. It is subject to unanticipated and unexpected changes and does not constitute legal advice.