China company formation is becoming more and more popular with the rapid advancement of China’s economy. Due to political, cultural background and other factors, China is a country full of opportunities and challenges in the views of most investors. With ctinuously deepening of opening up, China provides several forms of company incorporation for foreign investment in China.
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I. Wholly Foreign Owned Enterprise (WFOE)
This type of company is a limited liability company and wholly owned by it’s foreign investor. The WFOE requires a registered capital to be paid up. The liability of a WFOE company is limited to its equity. It is the investment vehicle of choice for the international investor wishing to manufacture, process, or assemble in China. It negates the need for a Chinese partner and does not require large amounts of registered capital to fund.
II. Representative Office (RO)
This company type is to act as a liaison office in China of its foreign parent company. This type requires no registered capital. Its activities are restricted to carry out product or service promotion, market research, quality control liaison with suppliers/partners in China. An RO is not allowed to generate revenue or to enter into contract with in China established businesses.
III. Joint Venture (JV)
The JV company is again a limited liability company. It was the first available corporate business structure to allow foreign investment into China after China announced its "Open-Doors" strategy. The Joint Venture is formed between Chinese and foreign company investors. It is the preferred business model to gain fast access to the China business Markets and to profit from existing local business knowledge.
IV. Foreign Invested Partnership Enterprise (FIPE)
The newcomer in the world of Chinese corporate structure environment and relatively unexplored. This new type of business is introduced to make entry to the Chinese market, which is a lot more affordable (no registered capital necessary), but riskier for the parties involved since Directors are personally liable for the business. The FIPE can be registered either as a partnership between to foreign Nationals or one foreign and one Chinese national.
V. Hong Kong Company
It's often be used as a Special Purpose vehicle (SPV) to invest in Mainland China. Hong Kong is one of the quickest locations to Incorporate a business. Although a HK company is not a legal entity in mainland China (see Wiki 1 country, 2 systems), many foreign investors, especially investors from Europe and North America choose to form a Hong Kong company as a SPV to invest in China.
VI. Free Trade Zone Company
Like Shanghai FTZ and Shenzhen Qianhai FTZ, customs formalities within zone is more simple and convenient that the entry of goods will only require registration of the variety and value of the goods without any inspection and intervention, there will be no declaration process for goods coming in and out of the zone.
Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020,Dongmen Rd South, Luohu , Shenzhen, China.
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