My supplier is missing licenses and I can't export! What to do?

Global SourcesUpdated on 2024/05/21

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Full Question I’m trying to help a venture-backed company whose supplier’s factory is missing some licenses that are imperative, given that the product contains batteries.

These guys are 100% committed to doing everything above board - do you have any ideas about who could help them? Might need to set up a WFOE but I'm not an expert by any stretch.

Answer Thanks for the email. Setting up a WFOE (wholly foreign owned entity) is certainly possible (I own 3 of them in China) but it takes time and investment to get all the licensing in place, as you have discovered. The headache is that you can’t use the WFOE to import/export until all the registration is complete. It’s a bit of a Catch 22 in that if you want to do things in accordance with the law you have to set up a WFOE, and that takes money; you even need to have staff trained up and on payroll to pass the audits to get the license to import-export, but that can take months to years (in some cases) and most investors don’t want to hire a team and set up a factory to have people sitting around on their hands for months at a time waiting for the right to legally produce a product.

Long story short…to solve this dilemma, 3rd parties offer a service where production can take place (from day 1) under their existing infrastructure then move over to the client’s WFOE if they want, when the time is right.

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My supplier is missing licenses and I can't export! What to do?

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