What is the best way for your business to explore the Chinese market? Should you find distributors, sell online, or set up a company in the country?
From indirect modes of entry like licensing, franchising and online selling to exporting with or without the help of local partners and investment in the form of representative offices, partnerships, joint ventures and wholly foreign-owned enterprises, every approach has its advantages depending on the goals and specific circumstances of individual companies.
You will find here strategies adapted to companies’ different goals and profiles
The three main ways to export goods or services to China:
- Direct exporting: direct exportation of goods/services from the producer in one country to the final consumer in China.
- Indirect exporting: selling of goods/services through an intermediary involved in the producer’s sector and market, who in turn sells to final consumers in China. Such intermediaries are agents, distributors, and franchisees.
- Cross-border e-commerce: selling goods/services online, provided to the Chinese consumer directly from Europe, or through a bonded warehouse in China (more details in the “CBEC” section of FAQs).
See more in our FAQ
If your business is looking into selling online first, we have two webinars guiding you through China’s e-commerce platforms.
Setting up a business in China
Are you about to start operating in China and wondering if you need a joint-venture, a wholly foreign-owned enterprise, or a representative office?
Not all types of businesses necessarily require the establishment of a legal entity in mainland China. In some occasions, distribution agreements or a representative office may be sufficient; a company registered in Hong Kong SAR may also be an option.
Whether a legal entity is needed in mainland China depends on your business, your objectives, as well as the specific industry in which you operate. In general, it is needed for businesses that require payments to be made and received in China without paying intermediary fees, for businesses that require a large number of employees in the country, as well as for businesses involving production activities.
Many foreign investors choose to register a company in Hong Kong SAR as an entry point to mainland China. The advantages include: less market entry restrictions, the use of English as official language in contracts and business, internationally-renowned litigation and arbitration mechanisms, easier movement of capital and people, as well as generally easier access to capital.