By Ron Cune

Strategic vision, long-term plans are the foundation of a new business formula in the Netherlands. As a result of the limited budget available to starters, financiers will closely examine both the entrepreneur and the plan. The “Ltd in formation” is exemplary of such a start. It gives one the chance to prepare before starting the real work.

The situation is quite the reverse for many Chinese. The China market changes daily and most of the Chinese investments do not come from banks, but from their own savings or that of friends or family. The faster you can get to work, the faster you will make money. Here, nobody has ever heard of an Ltd in formation.

The main motivation is to make a profit as quickly as possible. “Surely you only register when the business is up and running? This process takes months. Moreover, when we are finally ready, the rules may well have changed again.” Being aware of the existence of this difference in insight may be of importance when starting up a Joint Venture in China. A compromise that can be made, may include a simulation where activities are temporarily categorized under an existing license. As soon as the combined juristic form becomes active, the activities can be transferred to the new Joint Venture.

Ron Cune, Dragondancers