Chinese Buyers – The Two Reasons They Buy Businesses


Chinese Buyers – The Two Reasons They Buy Businesses

Key Points:

• There are more than 1.5 million millionaires in China
• Many Chinese want to get a visa so they can live in Australia
• Australia is seen as a safe place to invest money
• $200,000 to $10 million is the sweet spot they are looking to invest

The rise of economic China is one of the most influential events that will happen over the course of this century. It’s staggering to think that with a population of 1.3 billion people, there are more than 10 cities that have a population of more than 10 million each. Some of these city’s many Australians have never even heard of.

We are lucky in Australia because we’ve got such an amazing country. Plenty of space, freedom of speech, a strong economy, and first world infrastructure and facilities. All of this makes for a safe and happy way of life that leads to the two main factors that are having such a huge influence on the amount of Chinese that are investing into businesses here.

Firstly, they might be using that business investment to gain permanent residency status in Australia or in other words – get themselves a visa, where they can stay here for as long as they like and keep their citizenship in China. This gives them the freedom to be able to live and work in Australia or live and work in China. In those cases, generally most of the Chinese will look to invest the minimum amount that’s required to be able to tick the boxes Australian immigration require and there’s quite a few boxes to be ticked but one of them can be the investment requirement of at least $200,0000. We have a lot of people inquiring for businesses where the sale price is just over that amount.

The second driver is the safety and security of our financial system. When people invest money into Australia or conducting business here, the regulations are tight, well governed and in the end there’s very little chance that your money can go missing or that people can take your money from you. This means that the Chinese feel safe investing their money into Australia in particular into businesses. Chinese may already have permanent residency status or they’re not overly motivated to get it immediately, but they just want to move some of their money outside of China and into a safe and secure environment.

Those Chinese investors are looking for very solid businesses. This is where they’re looking for businesses often in the ranges between $200,000 and $10 million. In this range they’re often looking for a business that is in an industry that they are familiar with. For example, they might already own businesses in that certain sector in China. They are open to anything but businesses around manufacturing, distribution, import, export, logistics, warehousing, restaurants and hospitality.  And of course, industries that relate to Australia’s healthy fresh and natural environment such as milk production, vitamins, skin care, health and well-being products produced in Australia or related to Australian conditions are very sought after in China.

So, in the end what does this mean? If you’ve got a business that could sell for anywhere between $200,000 and $10 million, you’re probably right in the zone of a business that could meet the visa requirements for a Chinese investor. Or if you’ve got a really solid business that’s performing well financially and would probably sell in the range of between half a million dollars and ten million dollars your business could be right in the zone of what a Chinese investor is looking for to move some of their money out of China and into the safe Australian economy.

For more details contact Finn Business Sales info@thefinngroup.com.au