#Max amount of customers in gourmet ranch license
Once the investment is approved and a business license is issued, the company has to get approval to convert its investment into renminbi from China’s State Administration of Foreign Exchange.Īnd only after getting that can a foreign company open a local bank account and start spending money in China. If the proposed investment is in a restricted industry, the investment limit for local approval falls to $50 million. If the proposed investment is not restricted and is below $300 million, it can be approved by the municipal or provincial authorities.Īnything larger has to go to the Ministry of Commerce in Beijing.
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Approval depends on whether the investment is in an industry prohibited for foreign investment, like, say, agriculture or publishing.
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The third option is to establish a wholly foreign-owned enterprise. Another route is to set up a joint venture with a Chinese partner. But that means not being able to book any sales inside of China. Once largely off limits to foreigners, China began in 2003 allowing some foreign investors to become qualified foreign institutional investors.įor businesses that want to start ventures in China, the easiest path may be to first set up a sales representative office, experts advise. The process is different for investors who want to buy Chinese stocks. “If you want to bring in money into China for investment purposes, you need to have a project approved by the government,” said Flora Sun, director of the China office in Shanghai of the consulting firm Brian Cave International Trade. Gray, who started Gung Ho! with an initial investment of $400,000.Ī foreign company cannot convert a single dollar into renminbi - whether to open a bank account, hire an employee or lease an office - without first getting investment approval from the local branch of the Ministry of Commerce. “This is the biggest challenge in terms of setting up your business,” said Mr. While it may be many companies’ dream to sell to the 1.3 billion Chinese, getting money into China to set up is a formidable hurdle. “So when the Fed wants to reduce interest rates and put liquidity into the U.S., liquidity will flow out and go into international markets.” economy, but the dollar of the international economy,” said Ye Xiang, a former economist at the Chinese central bank who is now co-head of a fund management firm in Hong Kong. dollar is not only the dollar of the U.S. Perhaps the best example of the perils of an internationally convertible currency is none other than the United States.
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That is because when China began opening up its economy in the 1980s, it decided against opening its currency market to avoid the kind of money inflows and outflows that can blunt a central bank’s ability to manage an economy. “There are technically very few ways for renminbi to flow out of China,” said Christopher Xing, who advises on Chinese taxes at KPMG in Hong Kong. Gray said.Ĭhina may be the world’s second-largest economy after the United States, and the largest exporter, but the renminbi remains almost unheard of in international currency flows. “It’s loosened up a lot in the past 5 to 10 years,” Mr. Gray and other experts say, China’s capital controls pose only a minor aggravation for foreign investors willing to do their homework. But when it comes to doing business in China, Mr. Gray, who began his fifth venture, the Gung Ho! Gourmet Pizza Factory delivery service, with a fellow New Zealander a year ago.Ĭhina’s limits on the use of its currency, the renminbi, in foreign trade and investment have been in the spotlight for the way they help Beijing manage the renminbi’s exchange rate and arguably tilt the direction of trade in China’s favor. “It’s a very laborious process, and there a lot of hoops to jump through,” said Mr. He is therefore no stranger to China’s many rules on investing in the country.
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From a cattle ranch in the country’s northeast to a gym in Beijing, Jade Gray has been involved in his share of start-ups since arriving in China from New Zealand in 1996.