Job Discussion Forums

Voldermort · Joined: 14 Apr 2004 Posts: 597

Has anybody either in the past or currently opened a school in China?

I am tempted to have a go at it after waying the pro's and con's. But I'm having a little trouble finding information about how exactly to do it. How and where would you apply for the relevent permits, what is required in order to get them and roughly how much would it cost?

Midlothian Mapleheart · Joined: 26 May 2005 Posts: 623 Location: Elsewhere

Edited to remove offensive content.

Middy

KES · Joined: 17 Nov 2004 Posts: 722

Good post Middy.

I think your friend is underfunded for the location, but wish much luck.

englishgibson · Joined: 09 Mar 2005 Posts: 4345

A Chinese partner'll have to register the school/center under his/her name, guanxi'll be needed for sure, three teachers (no need for foreigners) and an accountant will have to be registered on the filed application for license, the location (at least 300 square meters) will have to be filed in the application for license and 50,000 RMB will have to be provided for the government as a "deposit". Then, license to hire foreigners will have to be filed and another 50,000 RMB as a "deposit" provided for another government office (I think that'd be the foreign affairs). I do not know about that 500,000, although as much might be needed for renovation as well as academic material and other expenses for set up. By the way, the Chinese law outlines there that the language center's manager/principal (Chinese) must have at least 5 years of experience in the field of education, but if YOU/your Chinese partner have connections anything is possible in China.
I suggest a good Contract in between the Chinese partner and YOU as well as I suggest a good Contract in between the space provider/owner and YOU/the Chinese partner.
Remember that YOUR name as the owner or coowner of the language center is only a "dream" in China. Well, you'd have to have ...I think 1 million dollars invested, so that Chinese would consider you for the license.
The paperwork takes about one to two months and then you need to file your application with the tax office. If you are a language center in China you might have to pay only 3-5% sales tax to the government and there are many centers that have "no tax deals".
Do not forget that English learning is in the best interest of young learners and so your marketing approach as well as academic shall follow.

Good luck to ya
And
Cheers and beers

7969 · Joined: 26 Mar 2003 Posts: 5782 Location: Coastal Guangdong

hmmmm, i was approached by a friend of my gf earlier this year about opening a school. this freind and her husband are involved in real estate in shenzhen and seem to be rather wealthy as far as i can see. i was told money is no object and i wouldnt have to put in a penny. hasnt gone much further than that so far, but as i will see these people during the may holiday the discussion might surface again.

voldermort, if i get any useful information i will try to pass it on to you.

7969

Roger · Joined: 19 Jan 2003 Posts: 9138

The rules have certainly changed since I last visited them, but the 500'000 yuan investment rule has never really ben set in stone; it applied to foreign-invested businesses, and schools are not normally businesses open to ownership by non-Chinese. IT's different with training centres, of course, but the most elegant way around such onerous rules is by franchising.

Then, you can partner with a local and be in the business for a mere 30'000 or so. That won't buy you a legal title to your business, though, nor any residency rights.

I would advise against going private because very few such venturesd last, - obviously they are not the money-making schemes that everyone thinks they are! There are overheads you cannot control easily - think of rental, advertising etc.

If you want to get hard information, grab a copy of the monthly newletter put out by Dezshira & CO. Consultancy; www.dezshira.com

Voldermort · Joined: 14 Apr 2004 Posts: 597

Thanks for all the well informed replies. I haven't decided to do anything as of yet but I am trying to keep my options open for the futre. Investing in a business is more of a way to secure my future. I sure as hell wouldn't trust a pension company out here.

The 500,000 figure is unfortunatly old news. That was the minimum investment limit for opening a Foriegn company in China (without the business partner), that figure was dropped last year to 200,000. But this really only applies to import/export businesses (this info is from the UK Consulate).

mlomker · Joined: 24 Mar 2005 Posts: 378

mlomker · Joined: 24 Mar 2005 Posts: 378

One strategy might be to open a franchised location of an existing school. The existing school will provide the guanxi and you provide a little seed capital and find students, teachers, etc. I'm sure you'd end up a lot better off financially than someone without an equity position.

I've seen advertisments from a few schools looking for franchisees and the investment wasn't too onerous. There have been some huge American companies that have tried to go into business in China just to be crushed by various 'licenses'. I'd hate to see you lose your entire nestegg.

Voldermort · Joined: 14 Apr 2004 Posts: 597

I was actually starting to think of buying into an existing school, not so much a franchise but just someway of still being able to do my own thing.

I have also thought about opening a branch of EF here, but I'm sure I would run into the same hassles of obtaining a licence. Besides have you seen the cost of the EF franchise? A little overated for what is starting to become a bad name I think.