As always, the first step is to consider your business plan. What are your goals and how would you like to achieve them? With this in mind, and with the help of our experts, you will decide which entity supplies you with the most opportunity and least amount of risk.
Below are the three types of foreign entities you can register for in China. Click on each to go more in-depth about their specific requirements and our corresponding services.
Note that each jurisdiction in China has different rules and regulations.It is impossible to know them all unless you have daily contact with local government officials. We do.Our team continues to build and maintain long term relationships with Chinese officials, allowing us to be your boots on the ground.
Joint Venture
What is it?
A Joint Venture (JV) is a partnership with a local Chinese company. Certain entities are limited to this structure in order to do business in China.
Why do it?
Many companies use this structure where local knowledge is required or where e partner has critical contacts and can assist market penetration.
Representative Office
What is it?
A Representative Office (RO) allows for liaison work only. This kind of entity is not allowed to conduct buy-sell transactions.
Why do it?
Many companies use this structure for the marketing and promotion of products and services offered in their home countries. Some use an RO to acquire staff and explore opportunities before making an initial investment. Others establish one for quality control, sourcing activities, or for monitoring production.
Wholly Foreign Owned Enterprise
What is it?
A Wholly Foreign Owned Enterprise (WFOE or WOFE) allows companies to do local business. This entity is more suitable for new ventures as it allows for long-term licensing.
Why do it?
A WOFE is registered directly with China customs and is allowed to direct trade. This particular entity has control over hiring, firing, investments, and strategy. Invoices are able to be issued in RMB, and there is no need for Chinese Party approval. Furthermore, it can repatriate profits and protect intellectual property.
Types of WFOEs include the following:
Manufacturing, consulting, technology, food and beverage, import/export, trade, and wholesale/retail outlets.
Use this document as a guide on your process, but if you need more information or have questions, don't hesitate to contact our representatives. Besides entity registration, we provide additional services that you may want to look at.