Zhejiang company formation also known as Zhejiang company registration, Zhejiang business setup, Zhejiang company incorporation, etc. When entering in to a new market, choosing the right corporate structure is paramount and can mitigate unnecessary business constraints, costs, and regulatory scrutiny. Many investors establish a local presence through a foreign invested enterprise (FIE), which helps limit the cost and increase the ease of doing business in Zhejiang or other parts of mainland China. The following the common types of FIEs.
1. Representative Office
A Representative Office (RO) serves as an extension of a parent foreign enterprise. It is an effective way to improve the efficiency of communication lines with Chinese partners or suppliers. However, the RO is limited in its commercial capacity, and cannot engage in profit-generating activities and can only hire local staff through a qualified labor dispatch agency. Its main function is to facilitate the activities of a foreign company in China.
2. Wholly Foreign Owned Enterprise
A Wholly Foreign Owned Enterprise (WFOE) is an enterprise owned by one or more foreign investors. It assumes its own separate legal personality status, which means it has rights and obligations under the law, such as the capacity to own property and the ability to enter into legally binding contracts. Broadly speaking, there are three main categories of WFOE setups: consulting WFOE, trading WFOE, or manufacturing WFOE.
Investors often set up WFOEs as a limited liability company, with the liability of each investor limited to the amount of capital contributed. In comparison to ROs, WFOEs provide greater freedom in business activities and offer foreign investors 100 percent ownership and management control.
3. Sino-Foreign Joint Venture
A Sino-Foreign Joint Venture (JV) is a commercial enterprise entered into by at least one foreign investor and one domestic Chinese party. A JV is not merely a merger of two companies: it forms a new legal entity (except in some rare cases discussed below). A JV may take many shapes and forms, and can be tailored to the specific needs of a business.
A CJV is a JV structure that offers more flexibility for investors. It can operate as a limited liability company or as a non-legal entity. Further, unlike the EJV structure, profit, risk and control are not divided in proportion to their equity interests - they can be negotiated within the contract agreement.
Investors commonly opt for a JV in one of two situations. Foreign companies that want to invest in a restricted industry sector develop JVs with a Chinese partner to meet investment requirements. Otherwise, foreign companies form JVs when they want to make use of the sales channels and distribution networks of a Chinese partner.
4. Foreign Invested Partnership
A Foreign Invested Partnership (FIP) is an unlimited liability business entity that can be set up without any minimum capital. Similar to JVs, it consists of two or more investors coming together for commercial purposes. FIPs are a less common structure for foreign investors, however, because investors need to assume more liability under this model.
The Partnership Enterprise Law regulates the set-up and operation of partnership arrangements. However, on terms relating to its operation, the law often awards discretion to the FIP and provides that where the partnership agreement specifies otherwise, the agreement will prevail.
Tannet’s Services
Feasibility study/market entry research;
Company Formation (WFOE/RO/JV/FIPE);
Bank account opening (Hong Kong/offshore);
Accounting, tax filing, and auditing;
Corporate secretarial service;
Payroll management;
Barcodes application;
Intellectual property service (trademark, patent, copyright);
Chinese Visa application (work permit/residence permit).
Company transfer/deregistration.
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 86-755-82143512, 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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