Take a look at the most desired multinational. Whether it is Apple or Volkswagen, among others, the chances are that it has a huge offshore presence. However, the most notable about top brands on the globe is that they are already in China, and it is easy to see why: taking advantage of the country’s progressive economic growth.
So, if you also want to grow your brand rapidly, it will be a good idea to consider going offshore, but what is the right time to set up company in China?
Before listing the indicators that show it is time to go offshore, let’s answer the big question, “why China?” Here are the main benefits to anticipate for expanding your company to China.
- Rapid Economic Growth
Since 1979 when China adopted progressive economic reforms, the country’s economy has grown rapidly at an average rate of more than 6.5% per year. The good news is that it shows no sign of slowdown, and you can ride on this rapid growth to take your firm to the next level. For example, the country’s economic growth for 2021 is projected to hit 8.5% after shrinking to less than 2.3% in 2020 because of the COVID-20 pandemic.
- Favorable Government Policies
To grow its economy further, the Chinese administration knows that it has to attract foreign investors and ensure their companies succeed. To achieve this, the country has a number of incentives. For example, you can locate your company in free trading zones and inland cities to enjoy lower tax rates.
Note that even in areas away from the coastal cities; access to raw materials, labor, and finished products is still easy because of the well-developed infrastructure.
For a business to survive, you must be able to plan and execute its strategy well. These two core requirements are only possible when the country of choice is stable. Every investor coming to set up company in China is impressed by its political and economic stability.
The social environment is also very stable, which explains why there are only a few or no cases of unrest in the country. So, whether you want to implement a two or ten-year business plan, China will make it easy to execute.
When to Set Up Company in China
The truth about going to China is that there is no correct time to set up a company in China. It all depends on your resolve, preparedness, and desire to achieve growth faster. However, this can be an excellent time because of the current fast economic growth in the country. So, why wait? Here are other signs that should signal you to go offshore to China.
- Hitting the profit targets for a couple of years: This implies that you have already conquered the local market and it could be the best time to go for a new challenge.
- Losses: If your company is only making losses, it might be a good time to look at the cause and set off to an offshore jurisdiction. For example, if the losses are caused by shrinking markets, China has more than you can exhaust. China also allows you to easily access the neighboring countries
- Growth prospects: If your company’s growth strategy includes offshore expansion, China is an excellent point for you. So, get the ball rolling by looking for the best entry strategy
In this post, we have demonstrated that China is an excellent jurisdiction for offshore expansion. It has a large market and supportive administration that you can count on to grow your enterprise.
To make the process of setting up your company in China easy, make sure to identify and work with an agency of experts like Fiducia.
With professionals, you will be assisted in preparing the documents, making applications to different departments, and completing the process fast. The experts will also hold your hands during entry for success.