It is said that starting in Sept., Zhejiang authority will accept applications for small loan companies.
This is a breakthrough!!
However, the company can not have any foreign shareholders. I am not surprised. However, rules like that have never stopped foreign capital in the past. You can find a Chinese to handle it for you. Or you can set up a company to control another company to control another company to invest in.
Figure it out and jump in!
Showing posts with label China. Show all posts
Showing posts with label China. Show all posts
Monday, 18 August 2008
Friday, 15 August 2008
China Business Law
Sometimes I feel lawyers enjoy making laws so complex that normal people have to get help from lawyers to survive the business world. If our legal system can improve like operating system, we can all handle our legal issues and make fun of lawyers.
But let's face the real world, you got to understand the local law to do business there. In China, the legal system is rather confusing. There are so many regulations, laws, guidelines. You would have no time to do business if you decide to figure them all out by yourself. And even if you figure out what the text mean, you still don't have clear image of what you can do because the big words are sneaky. When you have to deal with laws, you need professional help.
A friend was telling me a story early today, which reminds me again how important to have professional advice available to make big moves. An American company was in a join venture deal with a private company in China. This American company planned to buy 51% of this Chinese factory. The negotiation did not take long and both sides agreed on a deal. As part of the deal, this American company wired two million US dollars to this Chinese company for the 51% share before they found out the deal was not valid without local authority's approval. Now the money is in Chinese factory's account and the deal can not proceed.
It is amazing that someone would jump into a deal like this without professional accounting and legal advisers in his team. But these things happen. Maybe it is not a problem in the US. And the assumption that things work in your own country will work all over the world is dangerous.
But let's face the real world, you got to understand the local law to do business there. In China, the legal system is rather confusing. There are so many regulations, laws, guidelines. You would have no time to do business if you decide to figure them all out by yourself. And even if you figure out what the text mean, you still don't have clear image of what you can do because the big words are sneaky. When you have to deal with laws, you need professional help.
A friend was telling me a story early today, which reminds me again how important to have professional advice available to make big moves. An American company was in a join venture deal with a private company in China. This American company planned to buy 51% of this Chinese factory. The negotiation did not take long and both sides agreed on a deal. As part of the deal, this American company wired two million US dollars to this Chinese company for the 51% share before they found out the deal was not valid without local authority's approval. Now the money is in Chinese factory's account and the deal can not proceed.
It is amazing that someone would jump into a deal like this without professional accounting and legal advisers in his team. But these things happen. Maybe it is not a problem in the US. And the assumption that things work in your own country will work all over the world is dangerous.
What business people need to travel in China
Last Thursday morning, I was at Shanghai Pudong airport, waiting for a taxi. A guy came over and asked me which bus he should take for Yiwu which is the most famous market place for small merchandize in China. I could not tell which country he is from. His dark skin suggests that he may be from Africa. But I am not sure since Southern Asian can also have dark skin. His English was not good at all. I can hardly communicate with him in English.
Going to Yiwu is not a simple trip that I can tell him at his English level. After 15 minutes broken conversation, I had to give up. Poor guy. I can imagin all kinds of problems he is going to have before he makes to Yiwu.
Although it is not difficult to arrange a trip to Yiwu, it is for sure an adventure for a overseas business man/woman to figure that our by herself/himself.
I wish he had found 4 or 5 friends and contact me in advance. I could arrage the trip for them so easily.
Going to Yiwu is not a simple trip that I can tell him at his English level. After 15 minutes broken conversation, I had to give up. Poor guy. I can imagin all kinds of problems he is going to have before he makes to Yiwu.
Although it is not difficult to arrange a trip to Yiwu, it is for sure an adventure for a overseas business man/woman to figure that our by herself/himself.
I wish he had found 4 or 5 friends and contact me in advance. I could arrage the trip for them so easily.
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