When foreign investors desire to set up company in China it is appropriate for them to check their investment plans as well as ideas to make sure that the business entity they select has to be in accordance with the China assets regulations and World Trade Organization marketplace access regulations. This could be easily achieved with the backing of Chinese consultancy firms that are pretty familiar with the local market. All these firms will break the language obstacles and make you recognize the business culture, the government controls, and it helps in maintaining a good relationship with the government.
There are numerous business entities that could be applied to so as to start up a company in China namely:
Wholly Foreign Owned Enterprise (WFOE) - This is a restricted liability company wholly owned by the overseas investors. Wholly foreign owned enterprises were primarily meant for manufacturing movements that were either export oriented or for progressive technology. However, with China's entrance into the WTO, these points were gradually abolished and the WFOE was increasingly being utilized for service providers such as a number of consulting and management services, software development & trading as well.
Equity Joint Ventures- They are generally established to exploit the marketplace knowledge, preferential market treatment as well as manufacturing capability of the Chinese side alongside the technology, manufacturing know how together with marketing experience of the overseas partner. In a joint venture share holdings are non negotiable plus cannot be transferred without the permission of the Chinese government.
Co-operative Joint Ventures- The parties involved may operate as separate legal entities and bear liabilities independently rather than as a single entity. There is no minimum foreign contribution required to initiate this venture.
China Resident Representative Offices - A Representative Office is an place of work for a foreign enterprise that is set up in China to connect with Chinese businesses as well as customers on behalf of the Representative Office's home company. Its formation is subject to approval by the suitable authorities under the Chinese law.
There are numerous business entities that could be applied to so as to start up a company in China namely:
Wholly Foreign Owned Enterprise (WFOE) - This is a restricted liability company wholly owned by the overseas investors. Wholly foreign owned enterprises were primarily meant for manufacturing movements that were either export oriented or for progressive technology. However, with China's entrance into the WTO, these points were gradually abolished and the WFOE was increasingly being utilized for service providers such as a number of consulting and management services, software development & trading as well.
Equity Joint Ventures- They are generally established to exploit the marketplace knowledge, preferential market treatment as well as manufacturing capability of the Chinese side alongside the technology, manufacturing know how together with marketing experience of the overseas partner. In a joint venture share holdings are non negotiable plus cannot be transferred without the permission of the Chinese government.
Co-operative Joint Ventures- The parties involved may operate as separate legal entities and bear liabilities independently rather than as a single entity. There is no minimum foreign contribution required to initiate this venture.
China Resident Representative Offices - A Representative Office is an place of work for a foreign enterprise that is set up in China to connect with Chinese businesses as well as customers on behalf of the Representative Office's home company. Its formation is subject to approval by the suitable authorities under the Chinese law.
