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FAQ
 
 

1.
  Which industries and markets are competitive for U.S. Firms?
2.
Are there common characteristics to companies that are
successful in China?
3.
What are the advantages of a JV and WOFE?
4.
How quickly can my firm begin generating revenues?
5.
Are my premium quality products and/or services marketable?
6.
Do language barriers present a problem?
7.
How do we repatriate funds?
8.
How do we protect our intellectual property rights?
9.
Why do businesses fail?
10.
How do choose the right partners or associates?
11.
What kind of companies does VQI represent?
12.

What is VQI's investment model?

 


1. Which industries and markets are competitive for U.S. firms?


China identifies a list of "encouraged" industries, including telecommunications, consumer electronics, environmental and agricultural. However, the national government provides opportunities for companies which seek to take advantage of her highly educated, middle class market products and services. There are numerous huge opportunities to do business with a country that does $50+ billion dollars in trade with the U.S., and over 25 years of sustained economic growth.

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2. Are there common characteristics to companies that are
    
successful?

Yes, premium quality products and services, cultural awareness, long-term commitment and investment, and ongoing access to legitimate market and competitive intelligence.

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3. What are the advantages of a JV and WOFE?

JV ~ partners offer connections and cultural understanding. The Chinese partner usually contributes land, labor and infrastructure to the enterprise. Therefore, the risk is spread. Benefits of a JV are often illusory. This is especially true for companies which plan to export the bulk of their profits. Significant due diligence is required taking, on average, six to eight months to establish.

WOFE ~ reparation for filing a WOFE is much faster, often set up within two to four months. The foreign investor has complete management control with no need to share profits. Most U.S. companies opt to establish a WOFE. Both WOFE and JV approval can be derived from a trading enterprise.

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4. How quickly can my firm begin generating revenues?

Obviously this is a most critical projection. Depending on the industry and business model (exporting, manufacturing...etc.), you should expect to begin generating revenues in 3 – 5 years with profits in the next business cycle. Intensive market research and due diligence can begin to present guidelines for your strategic marketing and ROI estimates.

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5. Are my premium quality products and/or services marketable?

Again, appropriate market research and due diligence can provide insights to industry competitiveness, especially as the Chinese economy continues to demands new capital goods and infrastructure, and its middle class the highest quality items.

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6. Do language barriers present a problem?

VQI has Chinese-speaking members on staff to help out with negotiations and other transactions and arrangements. U.S. executives should be aware that both English and Chinese versions of documents must be submitted. If a conflict arises, the Chinese version prevails unless negotiated otherwise.

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7. How do we repatriate funds?

Although the reminbi (Chinese Yuan) is not fully convertible, legal entities can convert and repatriate currency. Some restrictions apply.

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8. How do we protect our intellectual property rights?

China has made major strides in ensuring that the intellectual property rights of foreign companies are protected. Remedies were and continue to be created   especially at the WTO’s rules, regulations and guidelines come into effect as negotiated. Foreign companies usually feel more secure with the establishment of a WOFE when it comes to protecting technology. Outstanding marketing can significantly counter infringements.

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9. Why do businesses fail?

It is most often due to a lack of cultural understanding and sensitivity as well as knowledge of bureaucratic procedural steps at national and provincial levels, and not from technical or professional incompetence. Building personal relationships (Guanxi) must precede business. VQI and its associates in the U.S. and China have established relations in several key ministries and departments, marketing intermediaries and media channels.

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10. How do choose the right partners or associates?

Their integrity and caliber will help determine the success of your enterprise. This critical selection process is the most important aspect of your strategic marketing. VQI will conduct thorough investigative due diligence to insure your candidate list is well-vetted and highly qualified.

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11. What kind of companies does VQI represent?

We are strategic consultants and marketing intelligence professionals, and not industry-specific. Our core competency is Actionable Intelligence used to facilitating market entry and creating a sustainable strategic position. During the past 20 years, VQI's expertise has helped a handful of Maryland’s Fortune 100 as well as small and medium sized firms enter the Middle Kingdom. Each has premium-quality products and/or services.

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12. What is VQI’s investment model?

Generally, it takes one to two years of significant due diligence in the U.S. and China before a formal presence is established. The investment range for SMEs is $150 – 250,000 per year to send an expat executive.

However, VQI's investment model is 1/3 to 1/5 less, depending on the industry and the business entity our clients want to establish. With offices in the U.S. & China, we can conduct initial due diligence for our select clients during this discovery phase of their strategic marketing. VQI can also introduce investors or partners who are willing to take an equity position.

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