We don’t deny from
the fact that China is the most potential market or platform for many business
traders. Many people would easily get attract from its market but they are not
familiar with this fact that if this is the most potential market then this is also
true that establishing a business in this market is also a toughest task in
this market. Many people plan to establish their business in the Shanghai but
it is not possible that everyone would get successful.
There are many reasons due to which people would get afraid to do business in Shanghai. If you are also one of them who are planning to start business in Shanghai then you have to be very clear with this fact that you have to bear strict regulations and too much government involvement in their industry. China government does not allow much freedom to foreign investors and even use them as a medium through which they can transfer capital and technology. WFOE Shanghai knows who to manage foreign investors and how to control them so that they would not much interfered in the china’s government policies.
Under WFOE you can simply established your company and you are the only person who can take major decisions, plan strategy, location, management, operations etc. Even the risk of the intellectual property rights has been reduced with a joint venture. If there are some good reasons then there are some disadvantages as well with joint venture such as investor has to bear lots of financial or investment burden and no Chinese partner is allow sharing it. Even local partner is not allowed to give any assistance so that investor would get any direction for running its business; investor has to do all the things as their own.
