If you are establishing a presence in China, you have several options to choose from. The one you choose will be determined by a number of factors, including the amount of capital investment you wish to make in the country and the type of operation you plan to run in the country. For manufacturing or processing facilities, for example, opening a full-fledged Chinese subsidiary, also known as a WOFE (Wholly Owned Foreign Enterprise), is going to be your best option.

Choose the Location

One of the first steps you’ll need to take when using this method of establishing a presence in China is to give careful thought to location. If you are operating a manufacturing facility, you are going to need easy access to supplies. For this reason, choosing a city with access to ports, such as the Guangdong Province in southern China, makes sense.

You also want to be careful about the cost of the location you have chosen. Larger cities, such as Shanghai, can be costly for companies.

Within that city or region, you’ll also need to find a site for your WOFE (Wholly Owned Foreign Enterprise). You want to make sure the selected site has access to sufficient power and water, as well as available workers.

Create Your Legal Entity

You will need to establish your company in the eyes of the Chinese and local authorities next. In some sections of the country, you’ll find so-called one-stop-shops that will help you do this and that can also help you make valuable connections to the community in which you are establishing your company.

Hire Key Staff Members

Do not expect to be successful if the top members of your staff are foreign. A successful Chinese subsidiary is almost always run by individuals from within the country. This is particularly true of your general manager and your chief financial officer. Bringing in experienced management with knowledge of how China operates is going to be extremely important for your success. They will be able to provide guidance and valuable information that is not going to be available elsewhere.

Now you could consider hiring people who have left China and worked in other countries but their salaries are going to be higher. You can receive the same benefits by hiring individuals currently living and working in China for less.

Establish Relationships with Suppliers

Before you begin operating your WOFE, you’re going to need supplies and that will require making connections with local suppliers. If you are hiring staff members from within China, they may be able to make suggestions and form these relationships on your behalf. Because they are likely to know the language much better than you, they can negotiate your deals more efficiently.

When you are establishing a presence in China through a Chinese subsidiary, you need to keep in mind the importance of having members on your team who are intimately familiar with business operations in the country. This is one of the key aspects for success in the market.