YEMEN

by Ala Abdullah

Country Background

• Yemen lies at the southern end of the Arabian Peninsula and has frontiers with Saudi Arabia and Oman and controls the strategic straits at the Southern entrance to the Red Sea (Bab al Mendab).
• The north of the country has three well-defined areas: a coastal strip along the Red Sea, the highlands inland and a desert area to the east.
• The south consists largely of mountains and desert.
• The population is poor and largely rural, but there has been large-scale urbanization in the last decade and almost half of the population now lives in towns.

Main Challenges

• Major Trends and Outlook.
• Balance of Payments.
• Yemen’s infrastructure is inadequate for a country of more than 20.7 million people.

Major Opportunities

• Power Generation and Transmission – Yemen plans to add 2000 MW of power immediately and 10,000 MW in the distant future.
• Oil and gas machinery - opportunities through the Yemen LNG project
• EPC Contracts
• Pharmaceuticals - Yemen has over 2,000 pharmacies.
• Agricultural equipment - demand for irrigation and bee-keeping equipment
• Food processing and equipment - especially fish
• General Trading.

Doing Business in Yemen

• You have to make personal relationships with local representatives and customers whether by:
• Regular visits
• Establishing resident representation

Using an agent/distributor

• Rather than opening an office or subsidiary in Yemen, Indian companies may wish to appoint an agent or distributor to look after their interests.
• However, there is no requirement that a foreign seller
• Appoints a commercial agent, and they can sell direct.
• The appointment of a local partner/representative will only be the first step. Yemen is a market in
• Which family structures predominate in the business environment, and where personal relationships therefore are important.
• Regular visits to the market, especially during the early phase, are an important part of a successful
• Interaction with the agent / distributor.

Selling to the government

• Large government contracts may present opportunities
• Government purchases are made through a tendering system managed by the Supreme Tender Committee.
• Local agents can be a critically important factor in shepherding bids through the tender process.
• Tenders are announced in the local and foreign press.
• Tender conditions are based on standard international regulations used to evaluate tender offers.
• Price is usually the determining factor, although quality and nationality of the product also play a role.
• Efforts to reform and streamline the tendering system are ongoing.

Electronic commerce

• While Internet cafés are sprouting rapidly in most major cities in Yemen, the general population does not utilize the banking system needed to facilitate financial transactions over the Internet, such as checking account, credit card or debit card purchases.
• Only three percent of the population owns a checking account. Even fewer have a credit card.
• In February 2005, the International Bank of Yemen introduced Yemen’s first credit card.
• Cash transactions dominate most of the consumer market even for most durable goods purchases.
• In fact, the lack of a viable credit system stymies the durable
• Goods market so that any anticipated e-commerce growth must await technological and financial infrastructure advancements and acceptance.

Openness to foreign investment

• Yemen is an open economy that welcomes foreign direct investment in all sectors.
• Its stable political and economic environment, well-qualified workforce and strategic position in the south of the Arabian Peninsula make it an attractive place for investment.
• There are a number of investment opportunities that exist in Yemen, but one cannot begin to talk about them without highlighting first the role that Yemen has played in the ancient global economy.

Right to private ownership & establishment

Business customs

• Customs Duties are charged according to the value of the goods that are being imported.
• Import duties are generally levied at rates varying from 5% on essential goods to 25% on luxury items.
•  Medical and agricultural items are duty-free.
•  Tobacco is dutiable at 145%.
• The law offers the exemption from profit tax for 7 years.

Local time, business hours, & holidays

• Government Offices : 
• Saturday to Wednesday 
• Thursday and Friday is the weekly holiday

Public Holidays

• 10th January approx Eid Ul Adha (Feast of the Sacrifice) four days
• 31st January approx Islamic New Year (1st of Muharram)
• 10th April approx Moulid An Nabi (The Prophet’s Birthday)
• 1st May Labour Day
• 22nd May Unity Day
• 24th September approx Start of Ramadhan not a holiday
• 26th September Revolution Day
• 14th October National Day
• 23rd October approx Eid Ul Fitr (end of Ramadhan) five days
• 30th November Independence Day
• 31st December approx Eid Ul Adha (Feast of the Sacrifice) four days
• Banks are closed on Fridays

Fact Facts

Population	23,580,000
Capital	Sana’a city
Area	555,000 km2
Ethnic Groups	Arab 92.8% Somali 3.7% Black 1.1% Indo-Pakistani 1% Other 1.4%
Religions	Muslim 98.9% Hindu 0.7% Christian 0.2% Other 0.2%
Major Language	Arabic (official), English
Monetary Unit	1 U.S. dollars= 221.25 Yemeni riyal
Major Industries	Petroleum industry, natural gas, fishing,  agriculture, manufacturing
Major Export	Petroleum, textiles, hides and skins, and coffee
Major Imports	food, manufactured consumer goods, machinery, transportation equipment, and chemicals
GDP	US$ 25.131 billion
GDP per capita	US$ 1,061

References:

• http://www.abcc.org.uk/business_services/country_profiles.cfm?cit_id=1452&countryProfile=yes&FaArea1=customWidgets.countryprofile_show_2
• Arab Fund for Economic and Social Development Handbook, Ibp Usa, USA International Business Publications
• http://www.yemenembassy.org/economic/Investment.htm

TAIWAN

by Yu Shanshan

Country Background

• GDP (2010): $430 billion.
• Real annual growth rate (2010): 10.88%.
• Per capita GDP (2010): $18,588.
• Unemployment (April 2011): 4.29%.
• Natural resources: Small deposits of coal, natural gas, limestone, marble, and asbestos.
• Agriculture (1.6% of GDP): Major products--pork, rice, fruit and vegetables, flowers, sugarcane, poultry, shrimp, eel.
• Services: (67.1% of GDP).
• Industry (31.3% of GDP): Types--electronics and flat panel products, chemicals and petrochemicals, basic metals, machinery, textiles, transport equipment, plastics, machinery.
• Trade (2010): 
• Exports--$274.6 billion: electronics, optical and precision instruments, information and communications products, textile products, basic metals, plastic and rubber products. 
• Major markets--P.R.C. and Hong Kong $114.8 billion, U.S. $31.5 billion, Japan $14.5 billion. 
• Imports--$251.4 billion: electronics, optical and precision instruments, information and communications products, machinery and electrical products, chemicals, basic metals, transport equipment, crude oil. 
• Major suppliers--Japan $36.2 billion, P.R.C. and Hong Kong $37.6 billion, U.S. $25.4 billion.

Main Challenges

• Taiwan has already lost the comparative advantage of inexpensive labor. Henceforth, it will have to rely on the continuous improvement of technology, skills, and techniques in order to win the competition.
• The development of the agricultural sector has already encountered trouble from both within and without.
• The percentage of economically productive people in Taiwan is slowly decreasing, and eventually Taiwan will face a situation where a majority of dependent people rely on a minority of productive people. 

Major Opportunities

• There are a multitude of trade and investment opportunities for exporters in the Taiwan market. 
• Some of the major sectors currently experiencing rapid growth are: processed food and beverages, gambling, transport, IT and telecommunications, minerals and energy, environment protection, building construction products and services. 
• Three of the major growth industries though are the exporting of seafood, meet and wine products. 

Doing Business in Taiwan

• The basis for doing business in Taiwan is respect and trust. You need time to establish relations. Although the country is westernised, the traditional Asian spirit survives.
• Taiwanese executives have the greatest international experience in all Asia. The country’s insularity and political difficulties with China have forced them to look for markets for their products all over the world.
• For the Taiwanese, age and professional status are very important. Older executives are held in higher esteem. They believe that a foreign company that sends a senior executive to Taiwan has a real interest in doing business.

Using an agent/distributor

• Finding distributors, agents and local representation are an important part of an export strategy for Taiwan. 
• The business environment in Taiwan is very different from other Western markets. Therefore, foreign companies need strong in-market representation to enable them to understand the idiosyncrasies of the market, marketing and distribution channels, buyer identification, product support and relationships with key government agencies in the market.

Establishing an office

• Foreign investors usually establish the following forms of business entity for the purpose of carrying out business in Taiwan:
• A corporation, which may either be a company limited by shares or a limited Liability company; or
• A branch office. Such as trading, sales, agency, marketing and consulting services.

• The prohibited industries:
• may negatively affect national security, public order, good custom, or national health and 
• are prohibited by laws and regulations. 

Selling to the government

The Centers can help businesses:

• Acquire necessary registration with various government agencies.
• Develop a marketing plan that identifies government agencies that buy small business products and/or services.
• Identify sub-contracting opportunities that increase small business activity.
• Understand and utilize Electronic Data Interchange (EDI) and Value Added Networks (VANS) that access government contracting information.
• Understand contract and referral services, as well as basic contracting fundamentals.
• Utilize and better understand the benefits of electronic commerce procurement business practices.
• Utilize a variety of reference and resource materials.

Distribution & sales channels

• Herbal/traditional products are sold at chemists/pharmacies, parapharmacies/drugstores and through direct sellers.
• Direct selling is expected to decline unless agents stock new star products that will arouse consumer interest. 
• Retailers and manufacturers will invest more money in advertising in health magazines or on health-focused websites. 

Electronic commerce

• E-commerce has become a global trend, and its development has begun to correlate to a country’s competitiveness.
• Although, similar to most parts of the world, e-commerce in Taiwan had faced the following challenges at that time:
• Maintaining the e-commerce system (software, hardware and infrastructure).
• Staying up-to-date with constant evolution of Internet technologies.
• Integration with financial / payment services.
• Integration with other services such as logistics.

Openness to foreign investment

•  Strategically located in the center of the East Asian market, Taiwan continues to attract significant foreign direct investment. 

 

Right to private ownership & establishment

• Private investors have the right to establish and own business enterprises, except in a limited number of industries involving national security and environmental protection.
• Private entities can freely acquire and dispose of interests in business enterprises. 
• Private firms have the same access as state-owned companies to markets, credit, licenses, and supplies. 
• Taiwan authorities have eliminated most state-owned monopolies, with the exception of some companies in the health insurance, financial, and power and water utility sectors.

Business customs

• Business cards
• exchanging business cards is very important in Taiwan, so you should have a large supply at all times as several hundred may be required for a short trip.
• Correspondence
• answer enquiries, proposals, correspondence and invitations as soon as possible, and at the very least, send an acknowledgment stating that an answer will follow shortly.
• Punctuality
• while traffic conditions in Taipei can cause delays, Taiwanese place importance on punctuality and you should avoid arriving late at appointments.
• Gifts
• the exchange of gifts is widely practiced in business in Taiwan and gift-giving usually occurs at the end of a meeting or during a meal in honour of your guests. Usually only small gifts are necessary but sometimes gifts offered by the Chinese are quite lavish
• beware that a special favour may be expected in return.

Local time, business hours, & holidays

• Business hour: 

• Holiday:

Fact Facts

Population	23,061,689
Capital	Taipei City
Area	36,008 km2
Ethnic groups	98% Han 70% Hoklo 14% Hakka 14% Waishengren 2% Taiwanese aborigines
religious	93% ancient Chinese religion: Buddhism, Confucianism, and Taoism 4.5% are adherents of Christianity, which includes Protestants, Catholics, and other 2.5% are adherents of other religions, such as Islam
major language	Mandarin (official language) 70% Taiwanese (a variant of Min Nan) - mother tongue 15% Hakka language
monetary unit	new Taiwan dollar ( NT $)
major industries	electronics,  petroleum refining,  armaments,  chemicals,  textiles,  iron and steel,  machinery, cement,  food processing,  vehicles,  consumer products,  pharmaceuticals.
major export	Electronics,  flat panels,  machinery;  metals;  textiles,  plastics,  chemicals;  optical,  photographic,  measuring,  and medical instruments
major imports	Electronics,  machinery,  crude petroleum,  precision instruments,  organic chemicals,  metals
GDP	USD$423.0 billion
GDP per capita	USD$16.372

References:

• http://en.wikipedia.org/wiki/Taiwan#Languages 
• http://www.china-biz.org/asian_business_folder/business-opportunities-in-taiwan.html 
• http://www.bycpa.com/html/news/20106/1466.html http://www.state.gov/e/eeb/rls/othr/ics/2011/157367.htm 

CHINA

by YuShanshan

Country Background

• China encompasses diverse topographies, climates, cultures and people. Economic development has generally been more rapid in coastal provinces than inland and there are large disparities in per capita income, culture and lifestyle between regions.
• Foreign investment remains a strong element in China's remarkable expansion in world trade and has been an important factor in the growth of urban jobs.
• The main exports are manufactured goods, including textiles, garments and electronics.
• China is a rapidly rising global economic power. Overall growth has averaged a robust 7% to 8% for more than a decade, with some markets expanding much more rapidly: 
• China's auto market exploded in 2003, passenger car sales jumping 82% year-over-year. Yet China's auto industry is still in early stages with strong growth projected for years ahead.
• China is the world's largest telecommunications market with some 280 million mobile subscribers and 270 million wireline subscribers. 
• Chinese household appliance manufacturers are experiencing growth in excess of 35% per year. The demand for China's household electric appliances, both domestic and for export, pushed production levels overall for many small and major appliance product categories up 40 to 50 percent or more in 2003.
• At approximately 1.29 billion people, China is the world's most populous nation, yet Internet penetration and ecommerce are still in the developmental growth stages. 

Unique Challenges for Marketers in China

• Distribution of spending power is very uneven: most of China's affluent consumers can be found in the main cities such as Shanghai, Guangzhou and Beijing, or the more numerous secondary cities like Chongqing, Harbin, Wuhan, Nanjing, Chengdu and Tianjin.
• However, there are also millions of potential customers in the hundreds of smaller cities around the country.
• This urban population is expected to grow rapidly as one of the biggest mass migrations in history from the countryside to cities gathers pace.
• In the decade to 2010, the United Nations estimates that 200 million rural Chinese will become city dwellers. 
• For now, it is the smaller cities that are proving to be a special challenge for outsiders.
• The diversity of China's market doesn't mean creating multiple messages. Instead, campaigns need to be carefully devised and tested across a variety of markets to make sure they have a uniform effect. 

Major Opportunities

• There are a multitude of trade and investment opportunities for exporters in the China market.  
• Some of the major sectors currently experiencing rapid growth:
• processed food and beverages, 
• gambling, transport, 
• IT and telecommunications, 
• minerals and energy, 
• environment protection, 
• building construction products and services. 

• Three of the major growth industries:
• the exporting of education, 
• processed food 
• wine products.

Doing Business in China

• There are three different business incorporation vehicles which can be utilized to do business in China. These are:
• The utilization of a representative office
• Seeking a Chinese joint venture partner
• Establishing a Wholly Foreign Owned Enterprise (WFOE)

• Key Millward Brown Metrics of China:

Using an agent/distributor

• Selling your products through distributors or agents is the “easiest” way to penetrate the Chinese market. 
• It is not free of risks, though, as you may find yourself in the middle of a chaotic distribution network that is difficult to control.
• Tips on how to deal with agents/distributors in China：
• Tip #1. Licences: 
• Ensure your distributor/agent has the required licences to retail your products.
• Tip #2. Exclusivity: 
• Try to reduce the exclusivity territory (you may attach a map to the contract). Generally, exclusivity for all China is a BAD idea.
• Tip #3. Establish sales targets and regulate your rights in case they are not met (e.g. termination or end of exclusivity).
• Tip #4. Commissions: 
• describe clearly the calculation basis for commissions in the agency agreement.
• Tip #5. IP Rights: 
• Define the use of IP rights, promotion and publicity materials. Do not grant property on IP rights; grant instead a licence of use.
• Tip #6.  Termination: 
• Reasons for termination are a key issue in distribution/agency contracts. Do not forget to regulate the consequences of such termination (e.g establish sale of stock to third parties / to the foreign investor, destroy / return the promotion materials, etc.).
• Tip #7. It is quite common for entrepreneurs and SMEs to initially “test the waters” with a distributor or an agent, and once they understand the market better and how their product works, they take it to the next level.

Establishing an office

• Obtaining the License.
• Designation of a Chief Representative.
• In order to be able to start operating you MUST designate a Chief Representative for the R.O. This person will hold legal authority and will be legally liable. The Chief Representative will also pay taxes in China.
• Registering with the Tax Bureau.
• Accounting.
• As soon as you get your license you must start paying taxes. You pay the income tax monthly and the office taxes every three months.
• Recruitment.
• You may choose whom you hire but you cannot complete the recruitment process directly.  Instead you need to use an employment agency that has a license to provide this service.
• Opening a Bank Account.
• Looking for an Office.
• You cannot just set up a Representative Office anywhere you want. The location/building needs to have a certain type of classification. A Chinese company can set up in locations we are not allowed to.

Joint ventures/licensing

• In China, most joint ventures are equity joint ventures (EJVs), though some investors establish cooperative (or contractual) joint ventures (CJVs). 
• CJVs and EJVs are similar in many respects. 
• The PRC government approval process, approval authorities, format of agreements, tax breaks, legal standing, and the means, laws, and authorities for dispute resolution are identical. 
• The general management structure and governance procedures are also virtually the same. 

Electronic commerce

• Internet market develops rapidly in China
• The enterprises demand on E-Commence intensively in China
• Enterprises investment in E-Commence changes to maturity and application
• Market structure of E-Commence in China
• Mobile E-Commence market developes rapidly
• Basic conditions of E-Commerce have been built
• The Chinese government promote E-Commerce-market actively
• Byelaw of Internet and security of communication network comes on conjointly
• Constitute the laws of E-Commerce actively
• Commercial banks found bank-online and China Finance Center of Authentication (CFCA)
• Commerce dept. of government and large scale state-owned enterprise connect the Internet actively
• Little enterprise s local IT basic construction level raise quickly
• Appeared new mode of EC like eMarktplace etc.

•  The development tendency of the electronic commerce market in China
• Develop E-Commence internally and externally
• Lighthouses effect
• Success will come when conditions are ripe

Openness to foreign investment

• Since 1979, a multi-tiered, multi-channel and diversified management system has been established in China's foreign trade and economic relations.
• comprises specialized foreign trade firms at various levels and of various kinds; 
• productive enterprises that manage their own import and export;
• scientific research institutes;
• commercial and goods supply enterprises
• foreign-funded enterprises. 

Business customs 

• Relationship &Communication
• The Chinese don't like doing business with companies they don't know, so working through an intermediary is crucial. This could be an individual or an organization who can make a formal introduction and vouch for the reliability of your company.
• Before arriving in China send materials (written in Chinese) that describe your company, its history, and literature about your products and services. The Chinese often use intermediaries to ask questions that they would prefer not to make directly.
• Business relationships are built formally after the Chinese get to know you.
• The Chinese see foreigners as representatives of their company rather than as individuals.
• Gender bias is nonexistent in business.
• The Chinese prefer face-to-face meetings rather than written or telephonic communication.
• Meals and social events are not the place for business discussions. There is a demarcation between business and socializing in China, so try to be careful not to intertwine the two.
• Business Meeting Etiquette
• Appointments are necessary and, if possible, should be made between one-to-two months in advance, preferably in writing.
• You should arrive at meetings on time or slightly early. The Chinese view punctuality as a virtue. Arriving late is an insult and could negatively affect your relationship
• Send an agenda before the meeting so your Chinese colleagues have the chance to meet with any technical experts prior to the meeting. Discuss the agenda with your translator/intermediary prior to submission.
• Meetings require patience. Mobile phones ring frequently and conversations tend to be boisterous. Never ask the Chinese to turn off their mobile phones as this causes you both to lose face.
• It is imperative that you bring your own interpreter, especially if you plan to discuss legal or extremely technical concepts as you can brief the interpreter prior to the meeting.
• Visual aids are useful in large meetings and should only be done with black type on white background. Colours have special meanings and if you are not careful, your colour choice could work against you.
• Presentations should be detailed and factual and focus on long-term benefits. Be prepared for the presentation to be a challenge.
• Business Negotiation
• Only senior members of the negotiating team will speak. Designate the most senior person in your group as your spokesman for the introductory functions.
• Chinese are non-confrontational. They will not overtly say 'no', they will say 'they will think about it' or 'they will see'.
• Chinese negotiations are process oriented. They want to determine if relationships can develop to a stage where both parties are comfortable doing business with the other.
• Under no circumstances should you lose your temper or you will lose face and irrevocably damage your relationship.
• Business is hierarchical. Decisions are unlikely to be made during the meetings you attend.
• Attire
• Business attire is conservative and unpretentious.
• Men should wear dark coloured, conservative business suits.
• Women should wear conservative business suits or dresses with a high neckline. 
• Women should wear flat shoes or shoes with very low heels.
• Bright colours should be avoided.
• Business Card
• Business cards are exchanged after the initial introduction.
• Have one side of your business card translated into Chinese using simplified Chinese characters that are printed in gold ink since gold is an auspicious colour.
• Your business card should include your title. If your company is the oldest or largest in your country, that fact should be on your card as well.
• Hold the card in both hands when offering it, Chinese side facing the recipient. 
• Examine a business card before putting it on the table next to you or in a business card case. 
• Never write on someone's card unless so directed.

Local time, business hours, & holidays

• Local time
• No time difference compared with Malaysia
• Business hours
• The Chinese government stipulates a five-day workweek with no more than 8 hours a day and no more than 44 hours a week.
• The regular working time generally is from Monday to Friday, with Saturday and Sunday off. 
• The Chinese people usually work between 08:00 and 18:00 each day, with a lunch break from 12:00 to 14:00. However, local variations may occur due to the time difference or policy in different cities. For instance, the working day in Xinjiang usually starts from 09:00 or 10:00 due to its longitude.
• Holiday

Fact Facts

Population	1,339,724,852
Capital	Beijing
Area	9,640,821 km2
Ethnic groups	91.51% Han, 55 recognised minorities Han - 91.59% Zhuang - 1.28% Manchu - 0.84% Hui - 0.78% Miao - 0.71% Uyghur - 0.66% Tujia - 0.63% Other - 3.51%
religious	non-religious and atheist 50%;  Daoist (Taoist) 32%;  Buddhism 9%  Christianity 8%;  Islam 2%.
major language	Modern Standard Mandarin(Main) Cantonese; 55 minority peoples have their own languages; many local dialects in mainland of China
monetary unit	Renminbi (yuan) (¥) (CNY）
major industries	Typesmining and ore processing, iron, steel, aluminum,  and other metals, coal; machine building; armaments;  textiles and apparel; petroleum; cement; chemicals; fertilizers;  consumer products, including footwear, toys, and electronics;  food processing;  transportation equipment, including automobiles,  rail cars and locomotives, ships, and aircraft;  telecommunications equipment,  commercial space launch vehicles, satellites.
major export	Machinery, transport equipment, crude oil,  natural gas, minerals or agricultural products.
major imports	Machinery and electrical appliances; High-tech products; Crude oil; Primary plastic products; Rolled steel products; Refined oil products; Iron ore;
GDP	USD$11.316 trillion
GDP per capita	USD$8,394

Reference:

• http://en.wikipedia.org/wiki/China 
• http://www.china-window.com/china_business/doing_business_in_china/do-you-konw-what-kind-of-.shtml
• http://www.kwintessential.co.uk/resources/global-etiquette/china-country-profile.html
• http://www.foreignentrepreneursinchina.com/tag/agents-in-china/