A small Toronto-based commercial interior design firm, full scale + partners inc., has started to export its success in Canada’s retail and restaurant sectors to China. Here at home, during the past four years it has worked closely with major players such as fashion retailer H &M. In fact, it has designed almost 15 outlets in Canada. H & M (Hennes & Mauritz AB) also enjoys a global retail footprint with more than 1,400 locations in 28 countries. 中文版請點擊這裡

That Canadian connection indirectly led full scale + partners to help H &M set up its 40,000 sq. ft flagship store in Shanghai in April 2007. But behind that dream international engagement was a steep learning curve.

“Things are very different in China,” says Yvonne Ho, principal of full scale+partners. The other principal is Jenny Lee.  ”For example, in Canada there is just one regulatory commission for the issuance of building permits,” she says. “But in China, there can often be various levels of government and local district departments that must grant approval prior to construction. The standards & requirements from each district may vary within the same city.”

“I have seen a project that requires 22 stamp & seal from local departments prior to construction. Frankly, it was a bit of culture shock for us.”

However, full scale+ partners had earlier cut its teeth in China collaborating with local design firms in Shenzhen, a city of 9 million people in Guangdong Province on the boundary between China and Hong Kong. “These projects helped us to gain a better grasp of Chinese market conditions and how the real estate sector works over there,” says Ho.

Full scale leveraged that experience into the successful completion of the H &M Shanghai flagship store. Negotiations began in late 2006 and the deal was signed in January 2007. Construction was completed in 67 days in time for the April opening.

During that hectic period, Ho gained a lifetime of insights into doing business successfully in China.

Finding a reliable, well-connected local partner is key to navigating Chinese bureaucratic and business channels. The next priority is lining up reliable professional services providers. “It is absolutely essential to find a good lawyer and accountant,” says Ho. “Choose people you can trust and who are familiar with Chinese business practices. And for lawyers they should be fluent in the language because in China, contracts with local companies are mostly written in Chinese especially if these documents are required by the government for permits or licenses application.”

According to Ho, the ideal approach for foreign firms is to set up a representative office in China but handle all the administration from a foreign jurisdiction such as Hong Kong or even Canada. Hong Kong is a good choice because English is commonly used in contracts and in the court system. And since Hong Kong still retains British common law, legal procedures are similar to ones used in Canada.

Getting paid in China is no longer a major concern even though the Chinese currency, the renminbi (RMB), does not circulate freely. Ho suggests that foreign firms can often get around the issue by negotiating payment in a foreign currency.

She also discovered that the Chinese banking and tax systems are still evolving. For example, although foreign firms can set up chequing accounts to pay bills etc., banks do not accept people’s personal signatures. Firms must use an authorized seal or “chop” to authenticate documents. Typically, one person in the company is responsible for the chop and conducts all the banking transactions.

And the taxation system requires firms to file monthly returns unlike in Canada where it is done annually.

Full scale + partners plans to use its Shanghai success as a springboard for future business throughout Asia. “Full scale is unique among small Canadian companies,” says Shirley Wong, Toronto-based representative for Invest Hong Kong, “because it was successful first in China before coming to Hong Kong.

“In Hong Kong, we are helping full scale in two ways. First we are introducing them to the different business and regulatory processes in Hong Kong in the design, build and fit sector of retail marketing. And, we are helping them how to set up its business network here.”

“Second, we are also advising them on how to set up a regional office so they can look after its business projects in China, Hong Kong and other parts of Asia from here.”