China has grown to become one of the world's leading trading economies and a business hub for companies from all around the world. This trend has made doing business in China one of the most lucrative endeavors for companies looking to invest here. China offers both companies and businesses great investment opportunities which explains why every one of them wants to invest in the booming trading economy.
You will get a choice of three corporate structures to set-up a business in China:
● A Representative Office
This allows you to establish a presence in China relatively quickly and cost-effectively. It allows companies to engage in a number of activities through a legal entity with their company name registered in China. Their representative office can engage in marketing, research, business liaison activities and coordinating activities. Through a representative office, you can’t issue invoices in Renminbi, the local currency of China.
● Joint Venture
It can either be an equity joint venture or a contractual joint venture. A joint venture is a limited liability company formed by a Chinese company and a foreign company. With a joint venture, you can choose between an equity joint venture or a contractual joint venture.
● Wholly Foreign Owned Enterprises( WFOE)
Since 2004, companies have been able to set-up foreign invested commercial enterprises, which are either WFOE or joint enterprises in order to establish retailing, franchising or distribution operations in China. More and more companies are choosing to invest in China through mergers and acquisitions. With a WFOE Shanghai you have a hundred percent ownership of the business in China.
Here are a few steps to start a business in China:
● Do your homework and pick a location.
● Before you register with the government, you need to decide what type of business entity you need to register with.
● A detailed five-year business plan is essential as you will be able to operate within its guidelines.
● Find a liaison and organize the necessary documents.
● Provide proof of ownership and get Chinese government approval for the project. It usually takes two to five months for governmental approval, depending upon the location of the project and its size and scope.
There are only three paths for foreign investors to start doing business in China. The options are simple, you can open a representative office, a wholly owned foreign enterprise or you can run a joint venture with a local partner.
You will get a choice of three corporate structures to set-up a business in China:
● A Representative Office
This allows you to establish a presence in China relatively quickly and cost-effectively. It allows companies to engage in a number of activities through a legal entity with their company name registered in China. Their representative office can engage in marketing, research, business liaison activities and coordinating activities. Through a representative office, you can’t issue invoices in Renminbi, the local currency of China.
● Joint Venture
It can either be an equity joint venture or a contractual joint venture. A joint venture is a limited liability company formed by a Chinese company and a foreign company. With a joint venture, you can choose between an equity joint venture or a contractual joint venture.
● Wholly Foreign Owned Enterprises( WFOE)
Since 2004, companies have been able to set-up foreign invested commercial enterprises, which are either WFOE or joint enterprises in order to establish retailing, franchising or distribution operations in China. More and more companies are choosing to invest in China through mergers and acquisitions. With a WFOE Shanghai you have a hundred percent ownership of the business in China.
Here are a few steps to start a business in China:
● Do your homework and pick a location.
● Before you register with the government, you need to decide what type of business entity you need to register with.
● A detailed five-year business plan is essential as you will be able to operate within its guidelines.
● Find a liaison and organize the necessary documents.
● Provide proof of ownership and get Chinese government approval for the project. It usually takes two to five months for governmental approval, depending upon the location of the project and its size and scope.
There are only three paths for foreign investors to start doing business in China. The options are simple, you can open a representative office, a wholly owned foreign enterprise or you can run a joint venture with a local partner.
The following documents are normally needed from the investing business entity:
● Articles of Incorporation or equivalent
● Business license, both national and local (if any)
● Certificate of Status or a notarized copy of the Corporate Register for the investor or similar document
● Bank Letter attesting to the account status of the investor company
● Description of the investor's business activities, together with added materials such as an annual report, brochures and website.
● Articles of Incorporation or equivalent
● Business license, both national and local (if any)
● Certificate of Status or a notarized copy of the Corporate Register for the investor or similar document
● Bank Letter attesting to the account status of the investor company
● Description of the investor's business activities, together with added materials such as an annual report, brochures and website.
