This allows you to form a valuable partnership with an existing business in China. Learn more about FIEs at What is a Foreign-Invested Enterprise (FIE)? Joint VentureĪ joint venture is a common enterprise between a local and foreign entity. This covers both partially and wholly-foreign owned companies in China. Note that as of 1 January 2021, the WFOE has been replaced by the broader category of a Foreign-Invested Enterprise (FIE) for new companies in China. WFOEs in China are required to pay tax and social insurance payments like most Chinese businesses.
Wholly foreign-owned enterprises realize many advantages over other business structures. While Chinese legal authorities allow some deviation from this primary scope of work, a company would need to reapply for their WFOE if they change the focus of their company.įor companies that want to have a significant impact in China, the wholly foreign-owned enterprise is a popular option. You must establish which type of business activity will be your primary business source. There are generally three categories of foreign companies in China: Additionally, this type of entity must have a registered company address and you must establish the business scope. This business type requires various involved individuals, including an investor, director, supervisor and legal representative.
This business structure is further divided into different categories including consulting, trading and manufacturing. This type of entity is allowed to engage in profit-generating activities and hire local and foreign employees. We consider the key forms below: Wholly Foreign-Owned EnterpriseĪ wholly foreign-owned enterprise, or WFOE, or WOFE, is a limited liability company. In China, there are several different types of business structure which may be appropriate, depending on the specific needs of the expanding enteprise. In this guide we break down step by step the process for opening a company in China, and answer the question ‘how much does it cost to open a company in China?’.
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However, many businesses are unsure how to open a company in China and deal with the associated bureaucracy and costs. International investors are buoyed by moves such as the decision to further open up financial markets to global investment. With low manufacturing costs, developed infrastructure, a motivated workforce and billions of potential customers in the area, China is a popular destination for international expansion.
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