China
The world’s second largest economy is a magnet for foreign investment. It’s also a market that requires informed and careful navigation. Most foreign companies seek the support of outside experts to fully understand both the regulatory landscape and cultural nuances that are so important to business success in China.
At a Glance
Yes, local bank account needed.
No, local representation isn’t required.
The standard payroll frequency is Monthly.
Yes, local registration is required.
The employer taxes are 39.50% – 41.20% of gross salary.
Yes, there is a mandatory 13th salary.
Good to Know
With a population of 1.4 billion people, China is the world’s second largest economy, the world’s largest industrial country and the world’s largest agricultural country. The Chinese economy has been growing at an annual rate of around 8-10% in the past two decades except during the COVID-19 period.
Foreign direct investment will remain high in 2023, especially in wealth management, new energy, and high-tech industries. The Chinese economy fundamentals continue to be sound and the country enjoys comprehensive competitive advantages in terms of market size, industrial support, infrastructure, and business environment.
With over 15 million university graduates each year, China has a large workpool of skilled talent that foreign enterprises can tap into to strengthen their management and operation teams. In addition, government policy supports and expands market access. The Central Economic Work Conference recently stressed even greater efforts will be made to attract foreign investment.
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Cultural Know-How
Language and cultural differences are among the top challenges of doing business in China. Without being able to properly communicate with Chinese people and understand how they think, it is very difficult to operate a successful business in China.
Diverse Business Practices
The size of China and its more than 30 provinces bring a wide range of business practices that can be challenging to newcomers, yet are crucial to grasp to see success. Even in top-tier cities like Beijing and Shanghai, the business culture can be very different.
Compliance Management
China has its own legal, tax, and accounting systems that require the support of professional consultants. In recent years, regulations in regard to company- and tax laws, in particular, have been repeatedly revised. Infringement may result in severe penalties. This can bring challenges to corporate compliance management.
Next Steps
Are you eyeing the Chinese market? Our expert-led managed services and technical consulting are designed to support you every step of the way. With an unparalleled focus on the customer experience, we enable you to expand with ease.
When you partner with us, you gain immediate access to GateWay, our global expansion management (GXM) system. This pioneering platform puts your global footprint at your fingertips, allowing you to effortlessly and compliantly manage your international operation.
“While local vendors tend to primarily care about their sliver of the business, HSP Group is, as the single provider, fully invested in the success of the entire organization.”
Head of Finance and Operations at a fast-growing FinTech