Thanks HFCAMPO:
I think I got my business strategy pretty much figured out, but I agree with a lot of things you mentioned.
I just need to figure out the best deal for me, to legalize my company, btw. thanks for all of you above for the useful advise.

@HFCAMPO

Excellent post, I agree 100% and you have put some things in there that I would not have considered.

Hopefully you are least are a qualified ESL Teacher/ curriculum designer and Administrator, ie Tesol Diploma qualified at the very least.

Years of Tesol under your belt, would be something I would look for to.

Friend of mine tried to do this, except a martial arts school. He didn't want a Chinese partner. Basically what he discovered, late in the day, was that it is (or was?) impossible for a foreigner to wholly own an educational institute in China.

The lawyers, who were supposed to be representing his interests, figured out he didn't want to hear this, and instead took as much of his money as they could before revealing this.

Unless you can find a trustworthy Chinese partner (or can verify the regs have changed) forget about it...

TICexpats:
No I am not a qualified ESL teacher and meeting plenty of those teachers, tells me that it doesn't mean much in the real world, although I agree it's good to have it for getting a job but not neccessary to do a good job.
Nonetheless I am a teacher by trade, with almost 20 years experience.
I was running several schools before, including teaching, curriculum design, admin, HR etc. so I think I can handle it.
My school model is flawless it's really just to register, that I don't know much about. So far the WFOE sounds good and seems like everyone is pointing at.

About lawyers I never trusted them as well as banks, so I will avoid them as much as possible. I have 2 lawyer buddies and they were honest with me and said that the whole thing is a bit fuzzy, becasue of the officials I have to deal with.

The reason setting up an educational institute is problematic is that it has special tax status and needs to be run as a not for profit.
However, if you leave education out of your business scope a WFOE is do-able. Hence the consultancy angle that was alluded to, this is a popular avenue.

Thanks TigerTiger
You are right the tax stuff is a whole other Universe of crazy. :)

About registration
I think I will go with the Culture Exchange or Education/Language Consultancy as my business scope.
Since I stay far enough out of the education but not completely avoiding it in terms of legal status. My lawyer friend said in both it would be expected that teaching may happen.So officially it would be somewhere in the gray areas of the law.

Plus as much as Iknow depending on the officials and registry office a deposit account between 30,000 and 100,000 RMB is the standard and that is something I was planning to invest just for the registration.

"My lawyer friend said in both it would be expected that teaching may happen.So officially it would be somewhere in the gray areas of the law."

Being in a gray area makes you very vulnerable to ganbu on the take.

"Plus as much as Iknow depending on the officials and registry office a deposit account between 30,000 and 100,000 RMB is the standard "
My friend was unable to recover this.

Thanks guys I appreciate your concern but with my modest experience in China I noticed that if somebody wants to rip you off or get you in trouble, they will succeed.

It doesn't matter what it is about, Visa, rent, business license, business partners...you name it.

But this unfortunate chance I have to accept, as you have in other countries as well.
I put that in my business-plan as the factor/ formula named 'luck'. While all other aspects of the business are absolutely bulletproof.

My model is flawless, so the only thing that can go down is all the registration stuff an the financial investment.
That's why I want to keep it tiny, so that the damage stays as little as possible.

It's an investment, if I loose it, then it's bad luck, I don't care if it's by shitty business partners, an earthquake, a rotten lawyer or rotten officials.

I made the dicision to open it and I will open it, so it would be really helpful if I could get info about how to open a school and not to whom I could loose if shit hits the fan.

I appreciate your concern but I know it's possible that I will loose all my investment and all the bad people that are around. I will deal with it if it happens (which I hope it won't).
Besides that, there are many businesses that run well and have not been ripped off by the entire Asian world.

Wouldn't mind to hear their story. Sometimes it fels like everyone in Kunming is suffering from paranoia and depression.
As bad as Yunnan/China is pictured in all the forums and reports I wonder how people are still alive, healthy, well fed, not ripping people off, happy etc.

I understand there is bad business and bad people but I am aware there are some good ones, too.

I will try to work with those guys. :D

So here is some data:

-200000 Yuan is absolutely collateral if I loose it, "ce la vie"
-my physical investment, nobody can take from me.

My business partner? I trust him because we are in this, with the same risk, time/finance. except that he has no interest or demands financially (well off Chinese guy), and so will it be set up (accounts, branding, registration etc...).
My business plan is set, and it has some security measures as well, the specialty is "ME", so if someone takes over they have to clone me to run it the same style I do.
Plus 2 more little insurance traps.

So they are welcome to take over and rip me off as long as I keep the license and my stuff, becasue I can move whereever I want.

Remember the licence will also be in your partners name.
You say he is rich, that will not stop people stealing the brand from underneath you. It happens all the time.
The only real way round this is to try to brand it as "Fixitwithahammer training". But your name and picture could still be used after you have gone.
Again, rule #1 - trust no one.

Regards registered capital, I believe that this can be sunk into the business after a time. There will be sunk costs anyway, think about where you will finance this from.

Regards education consultancy. The only difference with an educational institute is that they can provide certificates and run formal exams. As a consultancy you could prepare students for these exams, and even bus them to the test centres (which may be Hong Kong, a nice tax paid jolly outing for you), but just not formally examine them.