Author Archive Bekah Bollinger

ICP Licensing: How to Start Your Chinese Business off Strong

Promising untapped markets are emerging all over China. As companies race to break into the new business climate, ICP Licensing is in growing demand. With rules and regulations constantly changing, and an overwhelming amount of Chinese paperwork, the registration process can get confusing. Nevertheless, completing this step is a fundamental part of your successful game plan, and we’re here to help.

In this article, we’ve taken Incorp China’s 30+ years of professional ICP license registration experience and created an all-you-need-to-know-guide on how to properly establish a competitive web presence in any mainland region.

Beware: This is a fragile and crucial part of your company’s success. The process is not to be taken lightly, although there are certain service providers out there who treat it so in order to make a quick buck or yuan. Pay attention to the points provided and we will teach you how to do it right.

 

First things first:

As in all Chinese business, cultivating strong relationships is step one. Registering your license involves proving to the government that your intentions are pure, that your site is worthy of hosting, and that you can operate within the boundaries of Chinese law.

No book or website can fully prepare you for this process. Sure you can google a nice flowchart, but the business culture in the east is rooted in a social system more delicate than any western country.

Certain steps absolutely require a Chinese contact. For example, certain user registrations require an input on SMS verification codes which only send to China-based numbers. Furthermore, not all registration sites accept international payment methods.

As your documents are filled out and translated from region to region, a trusted cultural insider will quickly become your most valuable research tool.

See why Incorp China is the right relationship for you here.

 

Now, let’s get specific…

What is an ICP License?

An ICP (Internet Content Provider) License is a permit, applicable to legally registered companies, issued by the MIIT (Chinese Ministry of Industry and Information Technology) that permits websites to operate in China. It is a key piece in your site going live, one between purchasing a hosting and creating your domain.

 

Does every business need an ICP License?

If your goal is to launch a website using a server hosted in China or on a Chinese content delivery network, an ICP License is mandatory.

However, say you are a US company hosting your website in America. The Chinese consumer is merely a fraction of your target market. Is it possible for your website to function, for Chinese consumers to view your content without an ICP License?

The answer is yes, but anticipate firewall blockage and don’t expect a fast-loading website.

Note: In Hong Kong, thanks to a more western style set of laws, entering the online playing field can be a smoother process.

Learn more about the benefits of opening your company in Hong Kong here.

 

Which ICP License is right for my business?

There are two types:

1. Commercial License

A commercial license is for companies offering goods or services to customers chiefly online. Its parameters are strict and swift:

• Commercial ICPs are almost never issued to companies with any foreign investment.
• Therefore, you must be a completely Chinese-owned business.

2. Bei An (Filing) License

The ICP Bei An license is the standard license, available to foreign-owned entities: Representative Offices (RO), Joint Ventures (JV), or Wholly Foreign Owned Enterprises (WOFE). All mainland China hosted sites must obtain one before they begin any business online.

Given that our company assists non-Chinese businesses in entering the market, this is the license we will focus on.

 

How do I get an ICP Bei An License:

Within the category of Bei An licenses, there are two ways to go:

A. Proxy Process

This is the only option for companies that do not have a physical entity present in the country. It allows you to nominate a locally-registered Chinese company to hold the domain for you as a proxy.

With this plan, you take on additional risk. Because you are linked with entities other than your own, if the proxy becomes blocked for any reason, it’s game over for everyone with no way back in.

B. Direct Process

This plan ensures the highest possible control over your site. The process is slightly longer, but ultimately worth it for companies serious about their Chinese presence.

When a client needs this license, here’s what happens in flow chat form followed by a more clear explanation:

Chinese ICp licensing process, ICP License,

• We translate and submit the required documents to your web provider
– In review, additional documents may be required
– When approved, your provider sends the documents to MIIT

• MIIT reviews your ICP license application documents
– When approved, we will be notified via our Chinese phone number
– Within twenty days, you will have received a registration number

• We apply for a PSB (Public Security Bureau) ICP Filing
– We have thirty days to apply after receiving the number
– Once again, the documents must be submitted in Chinese

• We submit the documents to start accessing China-based web services
– With the license, you can now purchase hosting and CDN services
– Finally, you are able to register for a .cn domain

Note: Failure to keep the information you submitted to MIIT up-to-date can result in fines or complete cancellation of your ICP license.

Once your site is up and running, the license numbers will be displayed in the website footer.  Check out this example:

ICP Licensing footnote example picture Michael Korswww.michaelkors.cn

At this point, local competition knows you are serious about your sales and ready to compete. Your fast-loading website will keep customers around and partners engaged, and all the paperwork will be worth it.

Ready to get started? Call now for a consultation with an IncorpChina team member, and establish your most important relationship in China success. +1 561 729 6508 | info@incorpchina.com

#icplicensing #businessinchina #chinesemarket

 

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Be Prepared: Five Important First Steps for Setting up your Business in China

Compared to the fast-paced explicit processes which dominate Western business, starting a company in China can be a headache.  Combine extensive legal work with a social system opposite of your own and even the most experienced businessmen and women are in for a challenge. 

However, establishing a presence in China continues to be a profitable move for entities in every business sector. With endless resources at your disposal, how to begin gets confusing.  We’ve stripped away all the particulars and provided you with a basic idea.

The following list highlights five steps that your business needs to properly complete before beginning operations in China.

Think about how your business will fit into each section and most importantly, think of the relationships you can and will establish along the way. To succeed, you need sturdy connections to lean on during every step. Finally, be patient. Remember everything takes time in Chinese business culture.

 

1. Research, research, research

Begin by investigating the industry and areas you are interested in. Government officials publish a five-year plan stating the specific kinds of businesses they are looking for. Make sure to use it.

When you have an idea of the best place for your business, take a trip. Don’t stay in one place; compare other regions. Start making observations. Attend trade shows. Network.

2. Decide which entity is best for you

There are three kinds of business entities you can register for. Consider your particular business scope and decide which entity will supply you with the most opportunity and least amount of risk. The three potential business entities are:

i. Representative Office (RO)
– significantly limits what your company can do
– easiest to open

ii. Joint Venture (JV)
– your Chinese partner will have a home field advantage
– JVs create greater risk should the partnership fail
– only entity in which a “restricted” business can operate
– less limitation

iii. Wholly Owned Foreign Enterprise (WOFE)
– allows foreign entrepreneurs to own 100% of the company
– requires an extensive set-up process with registered capital
– can operate as trading and retail companies

3. Develop a five-year business plan

Be precise but be broad. Once your business plan has been finalized, you are only able to operate within its guidelines.

Note: Protecting your intellectual property is important. If you plan to trademark your company or product, act early and do so in both Chinese and English.

4. Apply for approval with your local authority

Necessary documents can vary depending on where and with who you are doing business. Be sure to comply with the regulations specific to your location. The documents must be converted to Chinese by a reliable translation company. Applications can take up to 90 days to be approved.

5. Find a bank

Once you have approval, you have 30 days to register with the Chinese Administration for Industry and Commerce (AIC) and apply for a business license. Once you have the license, you will be able to open a Chinese bank account.

 

Know more: Authenticating your US documents to be used in China

With these five steps complete, you have solidified a foundation.  Now it is time to focus on the particulars.  Exactly which way to go next will depend on your specific business plan.  Again, this can get confusing; but Incorp China is here to help.  Whether your next step is filing a trademark, registering for an ICP License, or finding a general manager and employees you can trust, we know how to get it done right.

 

“The time is now. Be part of the process as China becomes tomorrow’s economic powerhouse.”

Ready to expand your business and break into China’s upcoming markets? Call now for a consultation with an IncorpChina team member, and establish your most important relationship in China success.

+1 561 729 6508 | info@incorpchina.com

 

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Once in China, Do as the Chinese Do

 

Considering the dramatic cultural differences from the West, doing business in China can be difficult.  How well you adapt to the deeply rooted Chinese customs will profoundly influence the success of your business.

In China, cultural competence takes time. Business culture is very traditional, involving behaviors and beliefs that date back over 5000 years. That said, having a local representative who clearly understands both sides is crucial.

 

You will quickly learn:

Guanxi is everything. Defined as the connections and relationships which facilitate business and commerce, this is the most critical aspect of Chinese business culture. Cultivating strong relationships is the first step towards any Chinese market.  To properly establish Guanxi, awareness of and compliance with the following aspects of Chinese business culture should be the primary focus of all companies.

 

1. Basic Communication

In China, even at the most fundamental level, we find a tone language entirely different from common western dialects. Having someone able to communicate in a native Chinese tongue will be favored and seen as a sign of respect.

Clear communication by your host country’s standards may translate rudely in China. While the individualistic mindset of Western business fosters the idea of speaking up, of using as many words necessary to communicate one’s point, China business culture favors extreme modesty.

Furthermore, there are considerable differences in both verbal and non-verbal communication.

To name a few:
• Greetings and pleasantries differ
• Chinese names are reversed compared to western names
• Eye-contact is not necessarily a sign of respect
• Casual talk is a necessary precursor to business

2. Collectivist Culture

Westerners often view themselves as highly independent entities, whereas in China, an interdependent mindset is essential. China’s workforce is built on discipline and corporation, where the group always takes priority over the individual.

To showcase one’s commitment to the bigger picture, one is expected to act in a calm collective manner at all times. They should listen with intent and always be heedful to the needs of others.

3. Hierarchal Society

In China, hierarchy holds true, and status is power. Seniority must always be respected.

Especially in the decision-making process, seniority dictates authority and patience is pivotal. Decisions made with haste will be seen as insulting. Even simple matters are expected to be processed by multiple people until eventually, the manager with the highest status decides on a verdict.

4. Saving Face or giving face, especially in the midst of conflict

The concept of face, or miànzi, is an essential abstract notion that governs all social interaction in Chinese culture.

Extreme emphasis is placed on harmony and public dignity. People are expected to further these values by “giving face” or “saving face.”

To give or save face, extensive etiquette must be applied to all interactions. Composure is key. Limit expression to what is appropriate, and continuously consult a trusted Chinese representative on how to behave.

Especially in the midst of conflict, the art of “face” is vital. No matter the issue, maintaining face will always be the most pressing concern. You will find, negotiations often preserve harmony, and consequently save face, by implicitly working around a conflict, as opposed to confronting it straight on.

Such diversity may be overwhelming at first, but with patience and the right representatives, this highly educated, highly capable business atmosphere will generate authentic and successful long-term foundations.

“The time is now. Be part of the process as China becomes tomorrow’s economic powerhouse.”

 

 

Know more: How Important Is To Have Local Representatives In China?

Ready to expand your business and break into China’s upcoming markets? Call now for a consultation with an IncorpChina team member, and establish your most important relationship in China success.

+1 561 729 6508 | info@incorpchina.com

#chinesebusiness #chineseculture #whychina #chineseindustry 

 

business registration in china

The Transformational Trend: Why China is the place to be and how to start your business there

Why bring your business to China?

The future of China’s economy has never looked this bright. With a thriving middle class, a new wide-spread consumerist approach to spending, and increasing liberalization, China is now home to a wide variety of promising untapped markets.

Since the late 1980s and 1990s, China’s economy has been executing significant reform to the state-owned industry. Upon the passage of The Company Law in 1993, limited liability companies were approved, and firms were able to retain a share of their profits. As a result, private ownership increased rapidly. By 2005 it accounted for about 70% of China’s gross domestic product.

Among reforms, China established an unprecedented manufacturing presence as a result of highly competitive pricing and sheer production power. After dominating our global economy as the world’s largest exporter of goods since 2009, China’s focus now shifts from expansion to stability, that is back to service and consumption.

Amidst all this economic activity, China’s middle class has boomed. With a current urban population of around 800 million people, that is only going to grow, 54% percent are expected to be the upper-middle class by 2022.
Take a look:

China’s Middle Class as Percent of Urban Households, doing business in china

At this point, the economy’s growth has slowed. However, China is still ahead of their goal to double GDP between 2010 and 2020 and more industries are open to investment than ever before.
See below China’s GDP yearly growth since 2008 and China’s GDP annual growth rate over the last four years, respectively:

 

 

 

 

 

Even with a declining growth rate, China’s economy is still expanding at a rate three times higher than that of the US.

This is merely the start of China’s rebalancing. Economic prosperity is spreading as wages rise and workers demand better treatment. Furthermore, the quality of life is improving thanks to upgrades in transportation, health standards, and a wealth of technological advancements.

Increased opportunity and success is leading to higher disposable incomes and ideal target markets as the new Chinese consumer emerges, ready to spend. See below China’s consumer spending trend over the last ten years:

 

 

What is driving the Chinese consumer? Markets dealing with luxury items and services are bursting with opportunity and demand.

Interest continues to increase in:
• technological products
• luxury brands
• cosmetics
• nutritional care
• trendy foods
• high-quality goods
• entertainment
• travel

Get specific: See why Hong Kong is a great place to start

“The time is now. Be part of the process as China becomes tomorrow’s economic powerhouse.”
Ready to expand your business and break into China’s upcoming markets? Call now for a consultation with an IncorpChina team member, and establish your most important relationship in China success. +1 561 729 6508 | info@incorpchina.com
#chinesebusiness #chineseculture #whychina #chineseindustry #RO #JV #WOFE #chineseeconomy #GDP #thenewconsumer #culturaldifferences #chinesemarket #economictrends #AIC