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Once you have received confirmation that the form of a WFOE, a Wholly Foreign-Owned Enterprise,
property is suitable, proceed with applications for the or of an EJV, an Equity Joint Venture. While the first
authorizations and permits needed to start the busi- solution has the advantage of guaranteeing foreign
ness. Getting those permits can take quite a long time investors complete autonomy in running the busi-
(up to two months), so it is advisable to negotiate a ness, the decision to go for an EJV may be beneficial
contractual lease period when rent is not paid yet, as because the foreign investor will benefit from a
well as giving you the right to terminate the lease if whole network of contacts and knowledge of the
the authorizations and permits cannot be obtained. market that their Chinese partners already have,
though they will of course be entitled to participate in
Authorization and license the running of the company.
Finally, operating as a gelato parlour requires ap-
Company that will run the business can be set up proval from the local Office of Environmental Protection,
in China directly by an individual or by a company,and the which is required for approval of the project by the
procedure for establishing it involves the following steps: Ministry of Commerce, for a license from the Sanitation
• approval of the name: the local Administration Department and the specific license to start trading.
for Industry and Commerce (AIC) will issue a Notice
of Company Name Reservation; Some suggestions
• approval of the project by the local department
of the Ministry of Commerce; Although China is without a doubt an attractive
• registration with the AIC and issuance of the market for everyone looking to start a gelato shop, you
business license, or certificate of registration, at which should not forget that there are also many reasons why
point the company acquires legal personality; this is one of the most difficult markets to be in. There-
• registrations subsequent to the issuance of the fore, more than ever bear in mind the 3 P’s rule: Pa-
business license (such as, for example, registering with tience-because Chinese market generally guarantees
the tax and exchange control departments). a return on investment in the medium to long term;
It should be noted, however, that within Prudence-because in China, more than anywhere else,
the Shanghai (Pilot) Free Trade Zone (SFTZ), a 28 sq. you need to make sure you carry out very stringent
km. area set up last few years to promote more rapid checks; Presence- because you should not
development of investments, the company incor- expect your business to grow in China
poration procedure is faster and more stream- unless you are there in person.
lined, so it is certainly worthwhile think- Finally, be aware that lan-
ing about setting up there. Indeed, a guage barrier, cultural differ-
company incorporated within ences and continuously
the SFTZ will still be able to operate updated regulatory system
(and therefore run a gelato shop) mean make it very much
anywhere else in China. useful for an investor to
Another decision concerns the get the support of expe-
type of company you want to set up. rienced legal profession-
Chinese law stipulates that a newly- als who work mainly in
formed company can either take the Chinese market.

www.italiangelato.info
the website is sponsored by the italian association
of food indutries (gelato ingredients).

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