Are you 100% confident that your company is compliant with the changing Chinese regulations? Do your employees in the office need to be reimbursed when it is hot, or is that just for the factory workers? Is your lease contract still valid? Are employees who have left the company still officially a member of the board, if so do they have power? Do all foreign employees have all their legal employment documents up to date? Now that your company has matured, these are some questions that will sound familiar to you. But with the Chinese government now scrutinizing foreign companies further, are you confident you meet these new standards? In other words, is your company still Chinable?
The Chinable Business Scan (CBS) is the name of 1421 Consulting’s newest service. Previously many of our services have targeted companies that want to start up in China. The scan, however is aimed at foreign SME companies who have already set up in China and made it past the 3-year mark. This is an achievement by itself, because only 20% of foreign companies get to this point. This process would have undoubtedly been a challenging journey and many expats can tell many entertaining stories of this period. At the start many contracts would have been signed in Chinese without a translation using a Band-Aid solutions. As a result your company would have seen exponential growth, which is very normal for WFOE’s in China. The Chinese government, however, are scrutinizing foreign companies more thoroughly to ensure they are compliant to the rules and regulations. The Chinable Business Scan has been developed to scan your company to find any red flags, which can be recovered before any expensive fines need to be paid. The CBS also has wider positive implications, for example identifying solutions t to make processes more efficient.
The main areas the CBS covers include: financial check-up, human resources, contracts & leases and company structure. For WFOE’s active in trading and/or manufacturing the CBS will also check production and trading licenses. The CBS has been developed by an accounting firm (Vistra), law firm (R&P Lawyers) and consultancy firm (1421 Consulting Group), so you can be assured the scan will be performed with expertise.
A quick scan however might be too superficial. We believe the added value lies in the fact that one of our senior consultants will come to your company for a set amount of days. All senior consultants have at least 20 to even 30 years’ experience in China and come from different professional backgrounds, for example industrial and legal backgrounds. Depending on what expertise your company needs, we will send the senior consultant with the best fit. We see that day to day activities take up so much time of even the most experienced CEO. This unfortunately results in a helicopter view of the company rarely being undertaken. Bringing in an outside expert can bring issues to light which have been obscured to the company before. Already the scan has highlighted salvageable problems at companies where we have conducted a CBS.
When your company opts for the Chinable Business Scan we will first start by gathering documents and contracts. When departments are hesitant to deliver the documents this could be a sign of a red flag already. Also the analysis of the documents can give us an idea to which areas we should check more thoroughly. After the documents have been checked a senior consultant accompanied by a junior consultant will visit your company for a set of days. They will hold interviews and use just as much “instinct” as science to get a full understanding of your company. Upon completion of analysis the senior and junior consultant will then present their findings, red flags and recommendations. These results will ensure that your company is fully equipped, healthy and remains Chinable. Therefore avoid any expensive fines that are associated with conducting business in China.