China Business Services
About China China Market Entry
About Hong Kong
Hong Kong Market Entry
We will examine your proposed business activities in China and advise you of the options available to you under Chinese investment regulations and WTO market access commitments made by China. Other than financial institutions, a foreign company cannot set up a branch office in China. We can also advise on the tax-effectiveness of your shareholding structure and your funding arrangements.
We can assist you with the establishment of a representative office or a wholly foreign owned enterprise ("WFOE") in China. The documentation may differ depending on local requirements. Not all situations will qualify for the establishment of a wholly foreign owned enterprise, but this may change gradually under China's commitments to join the WTO. After a business license is issued for the representative office or wholly foreign owned enterprise, we can assist you to register with the local tax bureaus and confirm its taxation basis or tax preferences. We can also help you to register domain names in China.
For some foreign investors, the prospect of having to partner with a Chinese investor presents too great a hurdle to investing in a China enterprise. Others hesitate to share technology or business strategies. Still others simply lack the necessary contacts.
The Wholly Owned Enterprise (WFOE) Law of the People's Republic of China was adopted at the Fourth Session of the Sixth National People's Congress, effective April 12, 1986. Rules regulating the WFOE were not implemented until December 12, 1990. The WFOE rules require businesses to satisfy certain requirements before being allowed to operate a 100% foreign owned enterprise in China. These original regulations required that the WFOE:
On 12th April 2001, in order to eliminate legal barriers that would impede China's joining the WTO, China announced significant changes to the WFOE regulations, including the repeal of the restrictions to WFOEs described above. As a result, the WFOE has become even more popular. Additional changes allowing the establishment of WFOEs for sales or trading companies located in special economic zones, such as certain trade zones around Shanghai, have further enhanced the standing of the WFOE among foreign investors.
The WFOE limited liability company is a separate legal person and offers limited liability protection to the investor. Requirements include:
The process of applying for approval of a WFOE can be complicated. Preparing the WFOE application, leasing space in one of the free trade zones and laying other groundwork can take several months. Once the WFOE application and the Articles of Association of the WFOE are filed with the appropriate Chinese authorities, the authorities will respond to the WFOE application with an approval, denial or a request for additional information.
A foreign assignee in China is required to apply for a Z visa and a residence permit. If the assignee is attached to a representative office, a resident representative card is also required. We can assist your assignees to obtain these documents. Since the top rates of Chinese income taxes are rather high, planning an assignee's remuneration package is very important. Representative offices are required to hire their local staff through a government agency. We can arrange for the recruitment of local staff and payroll administration.
Your wholly foreign owned enterprise or joint venture can normally apply to set up a branch in another locality in China after it has fully paid up its registered capital. The prerequisites for a branch may be different in different locations. Under current policies, foreign investment enterprises in certain industries or locations will not be approved to establish branches outside of its location. We can assist you in assessing the viability of a branch and applying for the registration of a branch.
Yes. Historically, the establishment of a Joint Venture has been the most common form of foreign investment in China. We are able to assist our clients in finding their local joint venture partners through our network of contacts.
Bespoke services relating to the identification of suitable tax advisers, lawyers, local partners, premises, factories, management, staff and expatriate housing.
Professional corporate administration. We have the capacity to deliver a turn-key back office function for an operation in China. This service encompasses communication services, accounting and handling a broad range of commercial work including documentary credit services and managing an import or export operation.