China partnership company registration is one way to set up a business in China. Foreign invested partnership enterprise (FIPE) is a relatively new form of commercial entity. It is popular among new start-ups in China, because it does not require registered capital, but can still hire people, collect payments, issue invoices, and apply for jobs and residence in China. The following is a brief introduction.
Advantages of Foreign Invested Partnership Enterprise
1. No requirements on minimum registered capital.
2. Less procedures than foreign-owned enterprises or joint ventures.
3. If the partner is an individual, no corporate income tax is required. Individual partners should pay the partnership income separately. If the partner is a company, corporate income tax is applicable.
4. Ability to convert RMB profits into US dollar remittances to parent companies outside China.
5. Allow foreign companies or individuals to establish partnerships with Chinese individuals (Chinese individuals may not establish joint ventures with foreign investors).
6. Unlike a limited liability company that shares profits based on the proportion of shares held by shareholders, the distribution of profits or losses in FIPE can be negotiated between partners through a partnership agreement, regardless of the amount of capital contribution.
Features of Foreign Invested Partnership Enterprise
1. It is an entity that endows unlimited liability on the partners.
There is no minimum capital required for setting up this entity.
2. A partnership can be established between two or more natural persons or legal persons that includes both privately owned enterprises and state-owned enterprises.
3. There are no restrictions on the nationality of the partners; foreigners or Chinese can become partners in a FIPE.
4. Terms of 15 to 30 years are typical for a FIPE. It is also possible to obtain extensions of the FIPE’s duration.
Types of Foreign Invested Partnership Enterprise
Generally, there are three types of FIPEs:
1. General Partnership
The partners share unlimited joint and several liability for the debts and liabilities of the partnership.
2. Limited Liability Partnership
This is formed between general partners and limited partners whereby the limited partners’ liability is limited to the extent of their capital contribution.
3. Special General Partnership
For this form of partnership, the partners are protected from the debts or liabilities arising out of willful negligence of the other partners. Special General Partnerships are usually adopted by professional service providers such as lawyers , certified public accountants, and doctors. Other than this immunity, the entity resembles a general partnership.
Documents Required for Registration
1. For a company partner: company registration certificate, the company's articles of association certified by Chinese embassy or Chinese consulate overseas.
2. For a personal partner: passport copy, proof of address certified by Chinese embassy or Chinese consulate overseas.
3. Cooperation agreement signed by all partners.
4. Proof of good reputation of bank for the partner, certified by Chinese embassy or consulate (Managing partner only).
5. Company's Chinese name approval certificate.
6. China office address and lease agreement.
7. Other documents (case by case).
FIPE enjoys many benefits when it comes to the application for establishment, operation mechanisms or tax collections. In addition to this, Tannet can also help you establish a WFOE (wholly foreign owned enterprise), RO (representative office) or JV (joint venture) according to your actual conditions.
Contact Us
If you have further queries, don’t hesitate to contact Tannet 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 86-755-82143181 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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