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Want To Succeed In China Business? Make Sure Your Business Is Legal.

By Dan Harris and Steve Dickinson

Just got back from Chicago/Evanston, where I was on a panel at Northwestern's University's Kellogg School of Management's Greater China Business Conference. The Conference was excellent and I am sure I will be referring to it again over the next few days. At one point during my panel, an audience member asked how foreign companies in China can stay on top of China's ever-changing business laws. My response was essentially, "any way they can." My firm has handled far too many matters involving foreign businesses that have gone way too far in their China businesses without making sufficient efforts to learn of laws that will apply to them. One company boasted to us of the $250,000 marketing study it had done proving the viability of their business, only to have us tell them their business was completely prohibited to foreigners. Another company with a factory already built and ready to go came to us after having been told they needed all sorts of government approvals before they could throw the switch. Michael Barbalas of the American Chamber of Commerce of China (AmCham) spoke at the Conference on opportunities for foreign business in China and set out what it takes for businesses to succeed. When asked what he saw as the chief cause of foreign businesses failing in China Michael answered, "lack of planning....lack of preparation." Certainly failing to plan for or research the legality of your own business comes within Michael's answer. Before incurring time and money determining the best way to enter China, you should first determine whether you can enter China legally at all.

Full post as published by China Law Blog on February 17, 2009 (boomark / email).