Alternatives to running an office in Shanghai

Whether you are interested in starting up a business in China for the first time or hoping to expand an existing business into Shanghai, virtual offices or serviced offices can make the process easier and cheaper.

A virtual office is one that has no day to day physical address: there are countless companies in Shanghai that offer mail forwarding and phone answering services as well as the use of a prestigious address. A serviced office on the other hand is one that operates day to day out of a rented space that is fully serviced by a facility management company: in practical terms this means that the management company will fix the photocopier or provide the much needed receptionist.

In Shanghai (and in China as a whole), the situation is complicated by government limitations on how businesses may be set up by foreigners. Wholly Owned Foreign Enterprises (WFOE) and Representative Offices are two forms that foreign companies can take upon their entry into China. For both of these, it is a requirement by law that the business be registered to a real and approved physical address (i.e. you cannot have a virtual office in this case).

The upfront costs for starting up an office can be staggering as well as time consuming. There are the lights to think of, the phone line, furniture to be chosen and attractively placed, and staff must be found answer the phones or clean the tables. Furthermore, these elements need to be maintained after the initial set up. Opting for a serviced office allows businesspeople to focus on business rather than worry about its supporting paraphernalia. A serviced office also gives companies more room to move as undertaking to rent a traditional office space often ties a business down to a long lease commitment.

In terms of getting started in China, a serviced office can help you to avoid a lot of the headaches that arise through cultural differences and language difficulties. Some facility management companies can also help you with the technicalities of registering your business in Shanghai.

There are many companies now offering virtual and serviced offices in Shanghai. Regus, Executive Centre, and ServCorp are three of the more globally recognizable companies that have serviced spaces for rent in Shanghai. However, there is also Anoffice, AsianBiz, Elite Stage, and iQubator. A great number of these are located in ‘prestigious’ areas such as Nanjing Xi Lu, Weihai Lu, Xintiandi, and in the new Lujiazui Financial Centre.

To give you an example of what's on offer at many of these office spaces, I visited a friend at her workplace, Jumpstart, a Hong Kong based company that now offers virtual and serviced offices in Shanghai. The new premises of Jumpstart are on Nanjing Xi Lu in the new Wheelock Square, a glossy giant of a skyscraper. It’s an impressive place, with strict (but friendly) security in the lobby and spacious, minimalist design. The Jumpstart premises too are very attractive and present an efficient and professional image. Designed by DB&B, a Singaporean design firm, Jumpstart’s Shanghai space offers standard serviced offices and ‘neo suites’, larger, light and airy offices that offer more services.

Among the highlights of Jumpstart’s offices are fantastic views (in particular, those from the neo suites) of Jing’an Temple and the rest of the Shanghai skyline, no hidden charges and all-inclusive office packages, all-Cisco networking, wireless internet via a leased line to Hong Kong (i.e. it’s fast -very fast- and you can access YouTube, Facebook, and all the sites you need to visit to get your business up and running), and a temperature controlled server room with uninterrupted power supply, as well as rentable rack space there for your own server if you have special IT requirements.

Above all, if you are thinking about using a serviced office space, pay close attention to the list of fees and be sure to ask as many questions as you can about these. There can be a variety of hidden charges such as fees for the cleaning preparations before your office is ready for use, unexpected charges for phone and internet, and even an additional two months rent once your contract has expired to pay for the company's handling of any mail and phone calls you receive during this period. It is also important to weigh the day to day needs of your business versus the convenience of an instant office. If your office will be used frequently by say 10 or more employees and, more importantly, if you will often have clients visiting your premises, it may be in your best interests simply to set up an office. Although serviced offices are very attractive spaces, surely no eagle-eyed client would come away from a meeting without a sense of unease about the business' long term intentions and sustainability. There is an element of play-acting about the serviced office industry that cannot be ignored.

For more information about starting a business in Shanghai, check out the links below:

Setting_up_your_china_rep_offi

China_wfoes_trading_and_manufacturing_and_never_the_twain_shall_meet

Doing business Shanghai primer

8 must knows about business set China