Expanding into China? Avoid these 5 Common and Costly Mistakes!

Not having the right licenses for your activity scope

In PRC businesses can only operate within a business scope approved by the authorities and supported by obtained lisences. When registering a company in China it is critical to ensure you have all the right licenses and permits to avoid fines and operational restrictions in the future.

Learn more about S.J. Grand Company Incorporation Services

Not implementing an Employee Handbook

As a foreign employer in China, resolving a labor dispute with an employee can be troublesome. It is paramount to design a well-crafted staff manual as a proof that the company adheres to China’s labor law.

More detailed information about the inmpotance of the Employee Handbook in China

Not having proper bookkeeping and tax reporting

When it comes to foreign-invested businesses, any minor irregularities in the reporting often lead to company bookkeeping audits and can turn into operational suspensions and penalties. Chinese tax system is constantly evolving and you need to keep up with the fast paced regulatory changes to ensure compliance.

Learn more about Outsourced Tax and Bookkeeping in China

Not performing due diligence on suppliers

Many new foreign businesses in China enter into contracts with local companies that don’t share the same vision when it comes to quality standards, deadlines and business ethics. Often Chinese supplier may refuse to deliver the goods, delay the delivery, increase the price, or deliver the goods of lower quality. In worst case scenario, some Chinese partners own illegitimate businesses, or issue fake invoices (fapiaos). To reduce risks, you need to do due diligence on suppliers beforehand.

Learn more about our Fraud and Risk Management Services

Not securing your IP

IP protection is a persistent concen for foreign businesses operating in China: IP rights are limited in scope, duration and geographical extent, and foreign businesses often make the mistake of misunderstanding their IP rights. If a company doesn’t register its IP rights (trademarks, patents, copyrights) in China as soon as possible, its IP may not have proper legal protection.

S.J. Grand Financial and Tax Advisory assists foreign firms in navigating the complexities of operations and investments in Greater China since 2003. For more information contact us at contact@sjgrand.cn.

S.J. Grand is a full service accounting firm focused on serving foreign-invested enterprises in Greater China. We help our clients improve performance, value creation and long-term growth. 

Other Articles:

About Us

S.J. Grand is a full-service accounting firm focused on serving foreign-invested enterprises in Greater China since 2003. We help our clients improve performance, value creation and long-term growth.

News & Insights

Stay Informed: Subscribe to Our Latest News & Insights

Contact Us

Subscribe to Receive S.J. Grand's Latest Insights

Enter your email address below to get the articles, analytics and advice about topics that matter the most to you delivered directly to your inbox.