Shanghai Company

There are three types of foreign-invested in Shanghai:

1) Wholly-Owned Foreign Enterprise:

2) Representative Office of Foreign company

3) Sino-Foreign Joint Venture

 

Selecting the appropriate company structure when setting up shop in Shenzhen is important, as there is no possibility to migrate from one structure to the other. Such choice will be made by taking into account multiple factors including location of customers (China vs international), source of revenues (China vs overseas), industry etc.

 

Wholly-Owned Foreign Enterprises offer the most flexibility and freedom of operations. WFOEs can earn revenues from China, issue invoices (fapiaos), hire staff directly etc. In the post-WTO era, WFOES are bound to enjoy the same rights as local Chinese companies. They however have a registered capital requirement.

 

Representative offices are a more affordable to get a foot into Shenzhen or China. By definition, representative offices are just authorized to set up as liaison office or marketing arm of their parent company into China. They cannot conduct business activities, sign business contracts, earn revenues etc. Hiring staff must be done through government-authorized third-parties, and there is a fixed tax based on the monthly total expenses of the company. Due to abuse over the last few years through the use of representative offices to conduct business in China, in combination of the use of offshore bank accounts, especially in trading and commerce, the government has been cracking down on this, and there are new requirements for the parent company (parent company must be at least two years old and demonstrate business activities before it is authorized to set up a representative office in China).

 

Joint ventures were primarily used at the beginning of the opening of China, when full foreign ownership was not allowed. It is still the way to go in some restricted industries. Even when there is an option to set up a WFOE, joint ventures are very interesting in some manufacturing industries for instance when there is a need to tie up with a local partner to help open up markets.

 

Foreign Invested Partnership Enterprises are a new form of company structure available in Shenzhen and China. We will provide more details on this in the near future through this website.

Our Services

- Shanghai WFOE Company Registration
- Shanghai Representative Office Setup
- Shanghai Joint Venture
- Hong Kong Company Registration
- Offshore Company Registration
- China & Offshore Bank Account Setup
- Accounting, Audit services
- International Tax Advisory & Planning

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