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Establishing Your Startup

Notable policies

1. The cancellation of minimum registered capital requirement in China and simplification of company registration process (2013 Oct). But not sure for practical implementations and whether this policy covers foreigners.

2. Hi-tech companies enjoy a lower tax rate (for most case, 15%)

3. Some industries are restricted (such as telecommunication and oil industry)

Talent Pool (Demographics)

China officially recognizes 56 distinct ethnic groups, the largest of which are the Han Chinese, who constitute about 91.51% of the total population. The most spoken varieties are Mandarin (spoken by 70% of the population), Wu (including Shanghainese), Yue (including Cantonese and Taishanese), Min (including Hokkien and Teochew), Xiang, Gan, and Hakka.

China has urbanized significantly in the past few decades. The percent of the country's population living in urban areas increased from 20% in 1990 to 53.7% in 2013. As of 2012, there are more than 262 million migrant workers in China. Most of them are from rural areas and seek work in the cities.

Since 1986, compulsory education in China comprises primary and junior secondary school, which together last for nine years. In 2010, about 82.5 percent of students continued their education at a three-year senior secondary school. The China's national university entrance exam, is a prerequisite for entrance into most higher education institutions. In 2010, 27 percent of secondary school graduates are enrolled in higher education. Vocational education is available to students at the secondary and tertiary level.

As of 2010, 94% of the population over age 15 are literate, compared to only 20% in 1950 In 2009, Chinese students from Shanghai achieved the world's best results in mathematics, science and literacy, as tested by the Programme for International Student Assessment (PISA), a worldwide evaluation of 15-year-old school pupils' scholastic performance.

Who\Where to Hire:

1. ŸJob Websites like 51job.com, ChinaHR.com, as well as group forums and discussion boards of universities;

Ÿ2. Professional SNS website like Linkedin.com, most young professional peoples in China have themselves registered on this website;

Ÿ3. Some new vertical job hunting website, such as lagou.com for IT industry;

Ÿ4. University job fairs (graduates usually start hunting for job at the beginning of their fourth year in campus, around September);

Ÿ5. Referrals from friends, existing employees and head hunters

Advice for an Employer

Understand that some of them, “yes” actually means “maybe”, and “maybe” might just mean “no”.

ŸSome people might afraid to speak up, so just ask feedback more frequently

Where to Incorporate

Mainland: Incorporation complexity and duration depends on whether the company is foreign capital, JV or domestic capital. Domestic capital is easiest, then follows foreign capital and JV. Before company registration, an approval for company name is needed. Apart from all the documents and certificates required when doing registration work, a work office should be found because annual checks by officials happen there.

HK: Registration process will certain be much easier. No minimum registered capital required, free capital movement and barely no tax. However, if the company’s product or service finally comes to mainland China, there will still be lots of documentary work to do.