Small scale teaching business in china, requirements?

[Congmingben]

Hey, brief introduction I have been working for a private English training school in china for the last 7 months in zhejiang, haining. I'm from the UK.

My friend is wanting to start a business in china with me teaching English. The plan is, to rent an apartment and dedicate a room to teaching students of all ages (primarily high school students).

One problem I have found is foreigners can't come to china and start a business or own more than 50%, but this is no problem as my girlfriend is natively Chinese so the business can be in her name and she would work alongside me and my friend teaching, the 3 of us would take all the classes.

I know exactly where to find students and how to advertise etc, but what I really need to know is,

What do I need to be able to teach the students, start the business, rent a place in china etc...

Will I be needing a certain permit or license for foreigners to teach Chinese students? Does it cost a lot of money to turn a room into a classroom and call it a business, or does it cost any money to not call it a business but still teach students at the place, and is that legal?

I know all these questions might have very simple answers, just today I was talking with my friend and he mentioned the idea to me and we was just wondering how possible it might be.

[imron]

I don't know where you're getting your advice from, but it's perfectly possible for a foreigner to start a business in China and own it 100%. It's called a wholly foreign owned enterprise, and requires minimum startup capital of RMB 100,000. Those funds can be used entirely towards your business needs, but need to be sitting in a bank account registered under the company's name during the business licence application process.

Whether you'd be allowed to open a school is another matter - there are restrictions on the types of businesses that can be run and on the amount required for initial investment, and education is one of the areas that is more tightly controlled than others.

Also, it's unlikely that you'd be able to rent out an apartment, you'd need to rent an office. Offices and residential space can be quite strictly zoned in China, and unless a building has been marked for both, you'll not find it so easy to just rent an apartment to convert into an office because you won't get a business licence unless the registered company address has been zoned for commercial use (well at least in Beijing, not sure how it works in other cities, but I imagine it won't be too different).

If you decided to not call it a business and just run it out of your own apartment, then yes, it would be illegal. My advice would be to either visit the local 工商局 with your girlfriend, or speak to a company that specialises in helping people start businesses. Beware though that there are plenty of these companies around, and you often get what you pay for, don't expect professionalism and/or competence if you pay a low price to have someone else help with the startup process. So your choice is either to pay a lot to have a competent/experienced agent take care of things properly, or educate yourself about the process and do all the running around yourself (which can be a major hassle).

Also, not to comment on the stability of your relationship, but don't do this:

but this is no problem as my girlfriend is natively Chinese so the business can be in her name

If it's your business, and your money that is being invested, make sure your name is on it.

[Congmingben]

Im thinking much more small scale than that, as of now I've found out I wouldn't need to register it as a business, but could just simply advertise for students to come study at my apartment ages 15 - 30 for 2 hours once a week, but keep it small scale.

Any tips on expenses I would be needing?

[roddy]

Hang on, who told you you wouldn't need to register it as a business. Where's your visa coming from? This all sounds distinctly dubious. Which doesn't mean you can't do it, but...

[Congmingben]

Exactly my point, my lack of knowledge means I don't know what I need to do in order to obtain to right visa for it then....

[陳德聰]

Shouldn't you talk to your consulate/embassy/whatever it is that deals with visas?

Luring students into your apartment and presumably having them pay you cash so you don't have to deduct any taxes from your income, and all without a working visa... Seems pretty much the opposite of legit to me.

[WestTexas]

Sounds like what you want to do is private tutoring, not start a business. Plenty of foreigners who work in China do this. I don't think it's technically legal but it's VERY widespread. You can make good money doing this, though you aren't going to be a millionaire or anything. I've met people who make 300 per hour tutoring. 200 per hour is common. 150 per hour is kind of considered the 'minimum rate' for private tutoring with a foreigner. I've heard larger numbers thrown around online but have not actually met anyone who makes more than 300 per hour tutoring.

What you want to do is find a BS English teaching university job. You will work as little as 12 hours per week. You should find one that offers a housing allowance rather than on-campus housing so you can use your apartment for lessons. This will take care of your visa.

[roddy]

Well the first step to getting the visa is going to be having a company to give it to you.

[icebear]

As stated above, what you are talking about is private tutoring, not starting a business. I've had friends that did this, although the visa was a big thorn in their side; finding clients is easy enough, but you need to either hold down a full time legitimate job or make frequent trips to Hong Kong for visa renewals or stamps. I think the money can be fairly lucrative, as far as English teaching goes, but doing it full time brings a lot of headaches and uncertainty also.

[roddy]

Private tutoring where you are advertising and bringing numbers of students into a residential apartment is, for my money, too risky. A school thinks you're taking their business, neighbours get annoyed at the constant coming and going and noise - wouldn't take much to get someone in a uniform interested.

[imron]

Im thinking much more small scale than that, as of now I've found out I wouldn't need to register it as a business,

You're right, and as long as no-one from the tax office or the 工商局 found out, you wouldn't be kicked out of the country either. I hope the neighbours don't mind all your students coming and going.

Anyway, as WestTexas mentioned, doing private tutoring/teaching on the side is widespread and most people probably won't care about it - depending on the scale. Once you start advertising and/or making it more business like instead of an informal arrangement with clients referred via word of mouth, and generating enough business that it's a significant source of income then you up the risk of someone starting to care.

Regarding visas, the only way to obtain a *correct* visa for it is to register as a business. As director of the business, you'll basically be able to get endless Z-visas for as long as the company is running and you want to stay in China.

[Congmingben]

It looks like my best option would be to stick with my current teaching job and see if I can privately tutor one or two students in 1 to 1 tutoring for around 200 yuan an hour.

Thanks for the support, any more suggestions are welcome.

[icebear]

It looks like my best option would be to stick with my current teaching job and see if I can privately tutor one or two students in 1 to 1 tutoring for around 200 yuan an hour.

Agreed. Even better may be finding the job with the lowest possible time commitment (and perhaps wage) which sponsors a Z-visa. You can then more than make up the difference with private students at that rate.

[yialanliu]

Yes illegal, but it is done very frequently by locals..

Having a business in apartments is completely normal. Even Huaqingjiayuan (Wudaokou) has like 100 tutors within the apartment complex with their own businesses. I go downstairs third floor to get a haircut right now (same complex).

However, as a foreigner, it's much riskier as you need the right visa and if you are doing these low cost/scale operations, I doubt you'll meet the requirements for the appropriate visa..

[zhouhaochen]

Having a business in an apartment complex is completely normal, but not completely legal. Fine line, but there is a difference.

[panda23]

Whether you'd be allowed to open a school is another matter - there are restrictions on the types of businesses that can be run and on the amount required for initial investment, and education is one of the areas that is more tightly controlled than others.

How would one go about finding out in advance if they meet the requirements or not?

[imron]

You would need to visit your local 工商局 or speak to an agent that specialises in setting up companies and is aware of the current regulations and of the options that might be available to you.