Advice on setting up a small business in China

[silverlake]

Hi

I've been looking into the idea of setting up a small business that I would like to be ready in about a years time. I'm just wanting advice on a couple of things.

The initial idea for the business would be for it to only consist of me and my wife (a Chinese national) with the occasional temporary foreign worker (for no more than 6 weeks at a time). It is basically a company that is aimed at coaching a certain sport alongside English at school children (to start off with grade 7-9) in a provincial capital city. I will go into a certain amount of schools to coach the sport but I will also hold holiday camps in the summer and winter holidays (with the possibility of a foreign coach to help me out, which will most likely be someone who I played the sport with back home and will probably just be paid expenses of travel, accommodation and food).

I'm hoping to have a shortened test run at a school in the 2nd semester of the next school year, free of charge to one school to help me give a better service once money changes hands. But even when I do start charging, I'm not looking to make loads of money. I'd like to be comfortable but I want to charge a reasonable price to the the schools and parents.

I've got a background in playing this sport since I was 6 and having experience coaching to kids of various ages (British and Chinese) as well as having experience of teaching ESL in China. I also hold all the relevant qualifications and certificates.

I was thinking of setting the company up as a joint venture between me and my wife or setting the company up in her name and me working for her. Essentially, she would be responsible for the paperwork and legal side of stuff, while I'm more the coach/teacher/face of it. She doesn't have experience in working in this particular role but she's an intelligent girl and I think she can pick it up. We may need to pay another company to help with some stuff to get us going, but in a few years, I imagine everything to be pretty much 'in-house'.

I have had interest from an existing and reputable company in China, who offer services to foreigners and foreign business', to go into partnership with them, after me mentioning the idea and wanting to use some of their services to help me set up the company. Essentially, my 'company' would be part of their existing company. This could make things easier for me, but I want more control and with them wanting a cut of the money, I'd have to put up the prices for the service, which I want to be as cheap as I can. I'd also like to have a lot of control over what I do, which this could reduce.

We would have very little expenses to pay for. We would need a minimum amount of equipment as part of the service would be to aid schools in buying their own and the stuff we would buy would be quite cheap. We'd only need a small office and a website and any place we would use for the holiday camps could be rented cheaply with one of the schools we work with or as a discount on our services. Then there would be the expenses needed to pay the temporary foreign coach.

What do people think the best option would be? A company in my wife's name, a JV with my wife or using the existing company?

Just in case anyone is wondering, I've left out the sport and location on purpose as they aren't too relevant to what I want to know.

Thanks for any help

[Martins]

If I was in your situation, and since you've got a intelligent Chinese wife, I would use the existing company, familiarize myself with everything, know how the system works, evaluate the loss/profit and then when I were confident I could do it without the company, I would leave that company and make my own.