Investing in China is a challenge. Once u decide that market may be good, u find people and resources, your main question will be: "How will I get my resources back, once the business will be profitable?". In this respect is China not the best country to give you one shot, simple and reasonable answer.
As my former boss said: "Find out how will get out of business before u get in to the business". And he was right, especially in China.
There are following main points you can observe in there:
a)China likes the money get in, but once it is approved.
b) China doesn't allow you to invest inside China in form of 100% loan by mother company. Simply said, money can not flow to China as a loan from mother company only, it needs to be at least 66% of equity. And equity means your money is stacked. This money could not be withdrawn easily, like loan may be.
c) even u achieve to send your money to China as a loan it is not automatically allowed to withdraw your money out of China, once u decide to pay back the loan. There is a public organisation called SAFE to get permit from. And this is tricky.
d) do not expect all of your costs to be accounted in operation and therefore decreasing your tax substance. This is additional type of taxing on your sales.
e) be carefull on the rate you might get once money send to China and send outside china
f) focus on income tax, dividend tax and cash withdrawal tax. It can come to 50%.
g) build a second option/second way. Do not show off and keep safe and simple
It might be a great business to invest in China. Merge with others and ask questions.
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