If you are reading this article, it means one important thing: you see the opportunities that a 1,4 billion population, the current two-children policy and raising living standards have for you in China. Chinese kids grow in a very competitive environment and many of them start their education right after they are born. The market needs more educational institutions to meet the evergrowing demand but the country’s regulations are tough and there is almost no information on how to set up a school or a training center in China.
Here is a guide on how to open a school in China based on your budget and business plan.
First case scenario:
you are ready to invest RMB 1.000.000-2000.000.
· 5 employees including at least two certified teachers.
· The certificates from Education Bureau, the Civil Affairs Bureau, fire inspection certificate.
· Legal representative and principal should be Chinese.
· The rented space must be more than 300 m2
· Registered capital must be put in advance (600.000 – 1.000.000)
Foreign investors are allowed to establish pre-school educational institutions and high schools According to China’s Catalogue of Industries for Guiding Foreign Investment , but it should be only in the form of joint ventures, when the legal representative of the company and the principal are Chinese. If you don’t want to develop your own educational program and want to start your business as fast as possible, you might consider franchising.
If you want to establish a foreign owned educational institution, there two options:
1. To open a school for foreign children. The schools for foreign kids have freedom in choosing the teaching programs, books and curriculum. The drawbacks however, are that these kinds of schools aren’t allowed to enroll Chinese children or open branches.
2. Open a training center in a Free Trade Zone. This will allow you to have a full control over your company without partnering up with a Chinese shareholder.
Second case scenario:
you are not ready to invest RMB 1.000.000-2000.000.
· Starting with 1 employee.
· No additional certificates from Education Bureau or the Civil Affairs Bureau.
· Can be run by foreign investors.
· No space requirements.
· The registered capital can be put in within 30 years.
1. A cheaper way to establish a training center is to go for an online teaching. In this case it will be classified as a Value-added Telecommunication Service and Internet Information Service. In this case you will not have to rent a huge office but you will have to create or buy software that allows you to work with the students on the Internet.
2. Another way many foreign investors choose is to establish educational consultancy service or technology service companies. These types of companies can be run only by foreigners. The business scope of these WFOEs will include educational information consultancy service, commercial information consultancy service, technology consultancy service, computer technology service. Registering these kinds of companies you can provide consulting and connect teachers and students but no language training is allowed in the business scope.
Feel free to reach out for a free consultation and we will help you find a solution that fits your business model!