China company registration forms refers to the types of company that can be incorporated in China. If you are one of those who want to doing business in China, you may think about which kind of business entity you would like to choose before registration. The more you educate yourself about Chinese laws and business procedures, the more success you will have conducting business in the country. The following is the common types of legal forms in China for your reference.
1. Wholly Foreign-Owned Enterprise (WFOE or WOFE)
A WFOE is a common investment vehicle for mainland China-based business wherein foreign parties (individuals or corporate entities) can incorporate a foreign-owned limited liability company. The unique feature of a WFOE is that involvement of a mainland Chinese investor is not required, unlike most other investment vehicles (most notably, a sino-foreign joint venture).
WFOEs are among the most popular corporate models for non-PRC investors due to their versatility and structural advantages of a Representative Office or Joint Venture.
2. Representative Office (RO)
A RO is the most basic extension of its parent foreign invested enterprises (FIE) in both form and function. However, it isn’t actually a legal entity in China, which exists solely for the purpose of representing a foreign-registered company within China. Opening a RO is a reasonably simple way for a foreign company to have a limited presence in China, but there are heavy restrictions on what they can do. For instance, it is fairly limited in terms of operational scope since they cannot actually issue invoices (i.e., fapiao, the basis for obtaining tax deductions in China) or sign contracts.
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3. Joint Venture (JV)
Joint Venture is a special form of company registration in China where there is both a mainland Chinese party and a foreign party. When China started opening up to foreign investment JV was the main method for foreign companies to get into the Chinese market and they did this by partnering up with a local Chinese company to create a joint venture.
Foreign companies often enter into JVs for a number of reasons. The most common reason is to gain access to the domestic market. Without forming a JV, foreign firms find it all but impossible to gain market access. As long as the business is profitable and sales in China are incremental, JVs can be an excellent choice.
4. State-owned Enterprise (SOE)
A state-owned enterprise (SOE) is a business enterprise where the state has significant control through full, majority, or significant minority ownership. The defining characteristics of SOEs are that they have a distinct legal form and are established to operate in commercial affairs and commercial activities. While they may also have public policy objectives (e.g., a state railway company may aim to make transportation more accessible), SOEs should be differentiated from other forms of government agencies or state entities established to pursue purely nonfinancial objectives. State-owned enterprises can be used to improve efficiency of public service delivery or as a step towards (partial) privatization or hybridization.
5. Private Enterprise
A private enterprise is a company registered by an individual, group of individuals or even other companies without any government ownership. The most popular form of company registration in China, the rise of private enterprise has been largely responsible for transforming China from the bleak past of inefficient state controlled monopolies and government handouts to a high-growth, vibrant modern economy.
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For more information about business setup in China, 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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