Finding space to expand in a new world order

Decentralization

The Chinese economy is experiencing its lowest expansion rate in years, but Leijten views the slowdown as a result of less infrastructure investment and construction. However, domestic consumption and the service sector are on the rise, therefore business expansion is still on the cards for many companies.

Regus currently operates in 1,500 locations in 600 cities worldwide, but has a presence in just 60 locations in 17 cities in China.

"That's not a lot for the world's second largest economy. We need to grow," Leijten said.

Regus' expansion will be in line with the decentralization strategy adopted by domestic and foreign companies.

"In first-tier cities, multinational companies are retreating from the CBD to areas further out where there is an increasing supply and more reasonable prices. This will become a bigger trend in the years to come," he said.

In Shanghai, where Regus set up its first business center in the 420-meter landmark Jinmao Plaza, the company is distributing more services across wider areas of the city, such as in Yangpu, Putuo, Minghang and Hongqiao districts, where Leijten said he sees an increasing demand.

Tier two and tier three cities are also the focus for future expansion, as startup companies grow fast and foreign companies also send more of their people around the country, he said, adding that he was in Ningbo recently to cut the ribbon for the opening of his company's latest branch.

"The domestic market is developing quickly and Chinese companies are also expanding to more cities to stay close to their customers," Leijten said. "There are 132 cities in China with a population of more than 1 million so the potential is huge."

Challenges

Although it is a popular choice for more and more businesses, the flexible working environment provided by Regus business centers is sometimes misused.

In 2012, an organization called World Luxury Association was exposed by the Chinese media as being involved in fraudulent activities, using sham publicity to make illicit profits.

Registered with a Regus business center in Beijing, the group claimed on its websites its Regus' business address as its own address to impress clients, Southern Weekly reported.

"We do not check the criminal records of our clients. That is not our job. But we comply with the legal requirements of any landlord. We keep a copy of our tenants' business registration' or identification documents," Leijten said.

"Regus has a specific clause in the service agreement with the client that states that our clients must comply with the law or Regus can terminate the agreement immediately."

In his six years of working with Regus in China, Leijten said he had seen thousands of companies but only encountered one or two cases where a client was involved in unlawful practices.

"The concept of flexibility and being able to start up your business more quickly is key for 99.9 percent of our clients. They have a sincere intention to grow their company and create a successful business," he said.

Wang Wen contributed to this story.