Setting up a company for manufacturing in China

A trading company has an export licence and any Chinese product with VAT which was added, a portion of that is refunded after export. It's quite possible to make money just on the VAT refund because ALL Chinese companies NEVER EVER subtract VAT refunds from their export price. Example: My old trading company would export synthetic leather base and export it to Italy at the same exact price the Italian importer would pay if he bought directly from the synthetic leather base manufacturer. As we export it we get the 14% VAT refund instead of the manufacturer keeping it for themselves. Q: How do you know a Chinese business is cheating you? A: They are talking to you. BTW what's the product? Something like this perhaps?

The best is still to import from China and then sell it overseas. The margin will be high enough if you could make a right choice over millions of goods made in China.

The process to open up a real "trading company" (import/export) in China is probably not going to provide you worthwhile benefits when you compare it to the process involved setting it up and the amount of registered capital you have to put up. Usually the manufacturer will have a trading company themselves or an established relationship with one or... you can use any number of agents who will facilitate the entire transaction for you for a nominal fee. The latter may be a good choice for you to begin with until you are established and have your sales volumes increased to a level that makes it worthwhile to switch to something else. All of this is dependent upon how much you're planning to make/buy of course. A good agent can save you a lot of money because so many things change abruptly and often without much notice so it is difficult to keep on top of all the changes in rebates, taxes, etc. Make sure to check if there are on quotas or other restrictions in the country you will be importing your goods into as this could effect your bottom line.