This paper is an attempt to share the global strategy and the best practices and methods in developing an overseas R & D center that a Chinese company would encounter.The author has been responsible to lead and advise SANY’s board members in this effort from the initial concept.There have been many challenges and learning experiences along the way of this capacity building endeavor.The challenges facing Chinese companies including the cultural and regulatory requirements such as obtaining permits,brand recognition,staff recruitment and training,and proper operational model and metrics along with the potential technical and technology gains,the progress made and some recommendations will all be discussed.