From Zhejiang to the World: A Practical Three-Step Guide for Corporate Overseas Investment | Global Expansion Bootcamp

In recent years, the uncertainties in the global economic and trade landscape have continued to rise, and trade barriers, tariff fluctuations and changes in shipping costs have continuously impacted the traditional export model. Judging from the foreign trade data of the first quarter of 2026, Zhejiang's foreign trade presents differentiated characteristics: in February, exports to ASEAN, the European Union and countries along the Belt and Road showed strong resilience, with an increment of 1.77 billion yuan and a year-on-year increase of 4.3%, but the overall growth rate in March has been lower than the national average level, and the ceiling of traditional product exports has gradually emerged.

Facing an environment where opportunities and challenges coexist and uncertain factors are increasing, Zhejiang enterprises conforming to national strategies and making overseas investment arrangements is an inevitable choice to revitalize domestic surplus production capacity, leverage the resources, human resources and location advantages of countries along the routes to feed back R&D at domestic headquarters, form a domestic and international dual circulation, and achieve long-term and stable operation.

At present, Zhejiang enterprises' "going global" initiative has distinct characteristics: the invested industries are concentrated in the manufacturing sector, accounting for 69.65% of the total investment. Zhejiang's advantageous industries such as textiles, auto parts, new energy and electronics are the main force for overseas expansion. The investment structure of regions is undergoing adjustment, with investment in developed countries in Europe and the Americas dropping sharply, resources and production capacity are continuously tilting to emerging markets in Asia and North Africa; greenfield investment is the dominant investment method, 61.9% of the overseas enterprises choose to acquire land and build factories abroad to set up production systems from scratch, rather than acquiring existing local enterprises. This model has stronger controllability and is more compatible with Zhejiang's standardized manufacturing system, but it puts higher requirements on early-stage site selection and risk control capabilities.

This overseas practical operation camp sorts out a "three-step" practical guide for enterprises covering the whole process of overseas investment.

01

Country Selection:

The First Step of Country-Specific Risk Control

In addition to preferential trade policies for country selection, national security risks, religious and cultural risks are also important considerations.

At the national security level, political stability, public security environment and economic fluctuations are all rigid assessment indicators. In response to the differences in security conditions of different markets, enterprises need to formulate a complete set of security plans at the stage of business inspection. If a complete risk avoidance plan cannot be developed for physical investment, the layout should be abandoned directly.

Risks at the level of cultural customs cannot be ignored either. There was once a case where a Chinese-funded enterprise stored pork in the freezer of its Indonesian factory, which led to protests and vandalism by local employees and the shutdown of the factory. Conducting in-depth research on local religious taboos, work and rest habits and employment preferences before landing, and formulating localized systems such as canteen management and festival scheduling in advance, not only respects the local culture of the host country and promotes long-term cooperation, but also avoids irreversible operational losses caused by cultural conflicts.

02

Industrial Park Selection:

The Second Step of Park Matching    

After finalizing the target country, prioritizing the settlement in mature overseas industrial parks can greatly reduce the operational burden and enable enterprises to enjoy national-level policy dividends.

Tangier Tech City in Morocco has complete supporting facilities. The minimum registered capital for enterprises is only 10,000 Moroccan dirhams, the income tax ranges from 15% to 30%, and enterprises in the free trade zone can even enjoy the dividend of exemption from corporate income tax for the first five years, making it the optimal maritime springboard for auto parts, new energy and electronic industries to export to the European market.

The Rashakai Special Economic Zone in Pakistan allows 100% foreign ownership of manufacturing enterprises, with loose foreign exchange circulation. The corporate income tax for conventional enterprises is about 29%, and the tax reduction and exemption in the free trade zone is quite substantial, making it a highland for building materials, home appliances, logistics and mineral processing enterprises to explore the inland markets of Asia and Europe.

Bangladesh has also lifted the restriction on full foreign ownership. It is recommended that the registered capital be no less than 100,000 Bangladeshi taka, the minimum investment for production-oriented foreign-funded projects is 500,000 US dollars, and the conventional income tax is 30%. High-tech parks such as the China Economic Industrial Park in Chittagong can enjoy a 5-10 year tax exemption policy, making it a low-cost manufacturing hub for textile, light industry and consumer electronics enterprises to avoid trade barriers.

The Chinese Industrial Park in Serbia features high freedom of foreign ownership, simple company establishment procedures, a 15% corporate income tax rate coupled with the zero-tariff policy under the China-Serbia Free Trade Agreement, and direct access via the China-Europe Railway Express under the Belt and Road Initiative, making it a nearshore hotspot for in-depth expansion into the 27 EU member states' markets.

03

Investment Structure Selection:

The Third Step of Structure Establishment

Directly investing in overseas entities with a mainland Chinese entity is prone to problems such as restricted capital flow, high tax burden and risk implication. Registering an intermediate platform company in places such as Hong Kong, China and Singapore first to build a transit holding structure, and setting up independent entities for investment holding, overseas factories and cross-border trade respectively to split businesses and share risks, is the mainstream practice in the industry.

The Hong Kong structure is more suitable for scenarios of cross-border trade and capital transit. Hong Kong has a loose tax system and implements a two-tiered profits tax regime: the tax rate for profits under 2 million Hong Kong dollars is 8.25%, and the excess part is taxed at 16.5%. In addition, it follows the territorial taxation principle, and offshore income can apply for tax exemption after compliant declaration. Newly registered companies can start annual audit one and a half years after operation, and zero declaration is available if there is no capital flow. Backed by the smooth ODI approval channel in the mainland, it is suitable for receiving orders, retaining profits and allocating cross-border capital.

The Singapore structure is more suitable for scenarios of entity holding and regional headquarters layout. The conventional corporate income tax rate in Singapore is 17%, investment dividends are exempt from capital gains tax, and it has signed double taxation avoidance agreements with more than 100 countries around the world, with high international recognition and abundant overseas financing channels, making it suitable for holding overseas factories and connecting with international capital.

In addition to establishing new overseas factories with sole proprietorship, when enterprises carry out investment activities such as equity joint venture and equity merger and acquisition through the intermediate holding platform, they need to conduct due diligence on partners, verify equity ownership, and review cooperation agreements. It should be noted that all types of overseas investment need to go through ODI filing in accordance with regulations to achieve compliant landing.

From the Hongda Textile Factory in Egypt, the Bowei Alloy Morocco New Materials Base to the Hailiang Saudi Intelligent Manufacturing Factory, the core competitiveness of Zhejiang's manufacturing industry going global has never been the migration of low-cost production capacity, but the global resource integration realized by relying on the advantages of the complete local industrial chain and matching with scientific cross-border layout. Following the "three-step" process of overseas investment and integrating compliance and risk control into the whole process of pre-investment, in-investment and post-investment, is the key to success for Zhejiang enterprises to take root in overseas markets and build a long-term growth engine that can cross the foreign trade cycle.

* The information and opinions contained in this article do not constitute any investment advice and are for reference only.

This article is from the WeChat Official Account "Zhejiang Enterprises Overseas Integrated Service Port".