Why Choose China to Set up Manufacturing Companies?
- Faster production and scalability: When it comes to production, speed and scalability are two of the most important factors to consider. By taking advantages of China's vast infrastructure and highly skilled workforce, businesses can get their products to market faster and scale up their operations more quickly in response to changing demand.
- International expansion: One of the most significant benefits is the country's vast market potential. With over 1.4 billion people, China offers a huge consumer base for products and services. Additionally, China's proximity to other major markets such as Europe and Southeast Asia means that businesses can reach new customers more easily.
- Comprehensive supply chains: One of the benefits of setting up a factory in China is access to high-quality supports and supply chains. There are service providers who cater to the needs of factories, offering a wide range of services such as quality control, sourcing, and logistics.
Materials for EIA Application
Project Information
The first section of the application materials requires providing basic project information. This includes the project’s name, location, scale, and nature. Additionally, the details of the project implementation unit, such as the legal representative and contact information, should be provided. The background and necessity of the project should also be briefly described to help the reviewing authorities understand the project's specific details.
Project Construction Plan
The project construction plan section needs to describe the specific construction contents, design plans, and construction methods in detail. This part should list the resources required by the project (such as land, electricity, water sources, etc.) and how these resources will be obtained. The project’s timeline should also be included, demonstrating the construction and operation stages of the project.
Environmental Impact Assessment Report
The environmental impact assessment report is the most crucial part of the application materials, usually prepared by a professional environmental consulting firm. The report should include baseline environmental surveys, which detail the current environmental conditions of the project area, such as air quality, water quality, soil conditions, and the ecological environment. Next, the report should predict and analyze the potential environmental impacts that may occur during the construction and operation stages, such as water pollution, air pollution, noise, and ecological damage. The report should also propose reasonable mitigation measures to reduce or avoid these negative impacts.
Compliance with Laws and Regulations
In the application materials, the project unit should explain in detail whether the project complies with national and local environmental protection laws and regulations. This includes adherence to environmental protection standards, compliance with environmental measures in the project, and other legal requirements. It ensures that the project’s implementation will not violate current environmental laws and regulations.
Public Participation Feedback
Public participation is an essential aspect of the EIA application, especially for large projects. The project unit needs to provide a report on the public participation process, detailing whether the project has openly solicited public opinions and whether hearings or other forms of feedback collection were held. The report should record the opinions collected from the public and explain how the project has responded to these concerns.
Environmental Management Plan
The environmental management plan of the project unit must be included in the application materials. This plan describes the environmental management measures during the project’s implementation, such as controlling pollutant emissions, waste disposal, and environmental monitoring. It ensures that the project complies with environmental protection requirements at all stages and effectively reduces its negative environmental impact.
Process of EIA Application
Step 1: EIA Report Preparation
Once it is confirmed that an EIA is required, the project unit should commission a qualified environmental consulting company or expert to prepare the EIA report. These professionals will conduct a thorough environmental survey of the project area and collect relevant data on air quality, water resources, ecological conditions, etc. During the report preparation, the professionals will predict and analyze the potential impacts of the project and propose necessary mitigation measures.
Step 2: Submit Application Materials
After the EIA report is completed, the project unit should submit the report and other relevant materials to the local environmental protection authority (e.g., local ecological environment bureau). The submission should include the project’s basic information, construction plan, environmental impact assessment report, compliance with laws and regulations, public participation feedback, and other required documents. These materials must comply with the relevant requirements and formats to ensure smooth review by the authorities.
Step 3: Review and Evaluation
The environmental protection authority will review and evaluate the submitted EIA materials. During this process, the authority will focus on the completeness, scientific accuracy, and reasonableness of the report, particularly whether the predicted environmental impacts and mitigation measures are adequate. If the materials have issues, the authority may require the project unit to make revisions or supplement the report with additional information. The review and evaluation process typically takes some time, and the project unit should wait patiently.
Step 4: Public Participation (if applicable)
If the project requires public participation, this step involves providing relevant information to the public and organizing feedback collection activities such as hearings or surveys. This process allows the public to understand the project and offer opinions, which are then incorporated into the EIA report. The feedback from the public will be submitted to the environmental authority, which will further assess the project’s environmental impact based on the public's comments.
Step 5: Approval and Authorization
After review, public participation (if required), and potential revisions, the environmental protection authority will make a decision regarding the approval of the EIA report. If the report meets the requirements, the authority will issue an approval document for the environmental impact assessment, allowing the project to proceed to the next stage. If the report is not approved, the project unit will need to make adjustments to the project plan or adopt improvements and resubmit the report for further review.
Step 6: Implementation and Monitoring
Once the project obtains the EIA approval, the project unit must strictly follow the environmental protection measures outlined in the EIA report. During the construction and operation phases, the project unit should ensure the effective implementation of environmental protection measures and conduct regular environmental monitoring. Additionally, the environmental protection authorities will conduct follow-up supervision to ensure that the project does not cause unforeseen negative environmental impacts. If the project fails to comply with the environmental measures, it may face penalties or be ordered to rectify the situation.
Steps to Set Up a Factory in China
Before You Start
Before we start to set up your factory in China, the very first step is to investigate into the industrial categories where foreign investments are accepted. The negative list is the category of business in industries in which foreign investment is restricted or prohibited. According to the latest Negative List, a total of 29 categories implement limitations for foreign investors. You can get access to the full list through this link.
Step One: Market Research and Business plan
In most countries, it is useful to create a detailed business plan. When you’re starting a business in China, a thorough business plan is critical. To help foreign investors who may be not familiar with the Chinese market, Hongda provides a vast range of market research services to help businesses unlock new opportunities in the Chinese marketplace. By choosing Hongda’s market investigation and research services, you will get a comprehensive business proposal including valuable data into projected revenue, expected number of employees, and budget requirements. With actionable information from Hongda’s market research services, you can maximize your chances of success when expanding into China.
Step two: Business Location Selection
Selecting the right location for a factory or other business venture in can be a daunting task. There are many factors to consider, and given the rapid changes in this region, the right decision could make or break the long-term success of the enterprise. Hongda can help you select an ideal factory location by taking the impacts of Land Cost, Labor Cost and Availability, Utilities and Infrastructure Maturity, Logistics Cost, Optimized Supply Chain, Convenience of Travel, Land Use Expiration, and Government Policy & Capability. Now you can prepare to set up your business entity with great confidence.
Step Three: Form Your Business Entity
The most common business entity for setting up a factory for foreign investors might be Wholly Foreign-Owned Enterprise (WFOE), or a manufacturing WFOE to be more precise. A Manufacturing WFOE in China represents a fully foreign-owned entity established to engage in manufacturing activities within the Chinese territory. This type of WFOE is specifically designed for foreign investors aiming to produce goods in China, whether for domestic consumption or international export. By setting up a Manufacturing WFOE, foreign companies can benefit from full control over their production processes, quality standards, and supply chain management. To find out more about registering a WFOE in China, please visit our WFOE registration service page, or simply book a free meeting with us!
In industrial categories where 100% foreign invested companies are restricted, you can choose to form a Joint Venture (JV) with a Chinese business partner instead. Please click the link to for more information about JV registration.
Step Four: Open Corporate Bank Account
Once your company is registered, you will need to open a corporate bank account for daily transactions. The process and materials needed to open a corporate bank account may vary depending on the requirements of different banks. Our China bank account opening service page introduces everything you need to know about opening a corporate bank account.
Step Five: Environment Protect License and Special License Application
Now you are almost there! But before you can legally start production, there are still some regulatory compliances to be met. One of the most important issues is passing the Environmental Impact Assessment (EIA). This is to verify that your factory meets the requirements regarding resource use, pollutant emission monitoring, and environmental management.
With more than 10 years of rich experience, Hongda is highly skilled at helping our customers maintain environmental regulation and compliance. We have built strong relationships with governmental regulatory bodies to ensure that our clients comply with all legal requirements, and we stay up to date on changes to environmental regulations so that they can be implemented as quickly as possible.
For factories engaging in stringently managed products, special production licenses are required in addition to business licenses. For example, food production enterprises will need to obtain Food Production License in advance.
In addition, if your company will import production materials or export your products, an Import & Export License will also be compulsory.
Step Six: Staff Hiring and Human Resource Management
Efficiently running a factory requires experienced management personnel and highly skilled workers. To help you recruit ideal staff and employees, Hongda has launched EOR, PRO, and Headhunting services. In addition, you can also choose Hongda’s payroll service (link to payroll service page) and working visa and residence permit (link to working visa service page) to help you manage your employees!
Step Seven: Trademark Registration and Intellectual Property Protection
A trademark is a distinctive sign that identifies a commodity, service, or related specific individual or enterprise. It can be in the form of graphics or text, or it can be represented by sound, smell, or three-dimensional images. Trademark registration brings exclusive rights to the owner against others from using the trademark and gives the right to permit others to use the trademark for remuneration. You can easily protect yourself with the help of Hongda’s IP experts!
