Why 2022 is the Best Time to Open a Company in China
2020 and 2021 were perhaps the worst years in recent history because of the devastation caused by the COVID-19 pandemic. Businesses were torn apart, employment flushed down the drain, and trails of death dotted every city, leaving millions of people hopeless. Now, we are overcoming the pandemic, and economies are rising on their feet. Indeed, the rise is so inspiring and is expected to continue, which means that this is the perfect moment to set up your business for rapid growth.
In China, the economic resurgence has been very impressive, with its GDP growth hitting 8.1% in 2021 after shrinking to 2.3% in the previous year. As the recovery gains momentum, it presents an excellent opportunity for you to join and grow your enterprise. This post takes a closer look to demonstrate why 2022 is the best year for a WFOE setup in China.
A Closer Look at WFOEs in China
In China, WFOEs (shortening for wholly foreign-owned enterprises) are the most preferred type of companies because they allow foreigners to have 100% shareholding in their companies. With a WFOE, you can do the following:
- Operate factories for direct trading or manufacturing purposes.
- Offer a wide range of services to other businesses and customers in the country.
- Sell products of interest directly to the consumers in China.
- Import or export products without involving third parties.
- Directly invoice clients.
- Hire both local and foreign employees.
Why WFOE Setup in China in 2022 is Good for You
The primary reason why you should consider WFOE setup in China in 2022 is the large market. Whether your country has a small market or the impacts of COVID-19 are still rife, China can be a good way out. The country has a total population of more than 1.4 billion that you can exploit to drive sales. We also took special note of the growing middle-class, which is about 50% of the country’s population.
Other notable benefits of a WFOE setup in China in 2022 include:
- You can Take Advantage of Free Trade Areas
To optimize profits for your company, one of the best methods is keeping the cost of operations low. One way that China helps entrepreneurs to keep this cost low is by allowing WFOE setup in free trade areas. In these free zones, your company is allowed to import raw materials and goods tax-free. You only need to pay taxes when products are released from the free trade area heading into the market.
- Easy Access to the International Market
While China has a very large population of about 1.4 billion people, this is not all it has to offer. Access to the global market for Chinese companies is also pretty easy. China has signed many bilateral trade agreements with the US, EU countries, Middle East States, and African nations to make the movement of products easy. So, a WFOE setup in China puts the entire globe within reach.
- Highly Developed Infrastructure
For any business to thrive, it must be able to move raw materials, finished products, and labor with ease. China boasts of highly developed infrastructure that makes doing business easy and cheap. According to the World Economic Forum’s Global Competitiveness Report, China is among the states with the best infrastructural systems on the planet. So, the internet, power networks, ports, and roads are all ready for you to exploit.
As you can see, China is a country that is ripe for investment. Like many WFOEs that were started in the country in the past, expect yours to also enjoy exponential growth. Make sure that the WFOE setup in China is done properly by working with an agency of experts, such as Fiducia. They have experts in company registration in China and can also help you with other important executive functions, such as carrying out due diligence, accounting, and filing tax returns.