This China company section was last updated on May 13, 2012
This section is built with an editorial notion rather than being just a plain China Company Types information bank. We decided on this method to remove some mirrors from the China Business maze and to assist, especially the less bureaucracy savvy, in better understand the types of company available in China, as well as the overall business types and business structural environment in China.
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Company Structures In China
Following you will find some very common terms of available business structures (company formation options) in China. Below is a list on common Chinese Company Variations
At this point, if you already know what company you need, just use the left column menu to navigate directly to the company type you have in mind to register in China, or just simply click the relevant china business formation icon below
For everyone else, simply follow our China Company Formation Tutorial, which we believe, will not only provide much needed information on how to set-up your business in China, but also contribute to better understand the Chinese business environment.
Okay, so after you picked your favorite dish, all that’s left for you is to follow us into the kitchen and...
Agreed. This may sound a little harsh, but - don’t be misguided and take it too easy, thinking it will be alight. Chances for you to be not alright are much greater if you make a misinformed decision.
Remember on the previous page, here, we distinguished 3 China business formation venture groups. This was for a good reason since the very same applies to the China Company Types. This will allow to group the entire pile of companies from above into 3 (now but 4) major company model groups (groups), namely; WFOE | Representative Office | Joint Venture | Partnership Enterprise
While it has come into fashion meanwhile and some may count more than 4, because they add Hong Kong to China? This is simply "not" the case. If it was, then we would need to add even more, like Macau, Taiwan and other special authoritative regions. This is simply a mislead. The Hong Kong Company Governance complete different compared to the China Corporate Law, so is HK’s banking and the entire legislative system. Do not get pulled into a gully and tangled up with politics.
Let’s take a closer look at the 4 China Company Model Groups
This type of company is a limited liability company and wholly (100%) owned by it’s foreign investor. The WFOE requires a registered capital to be paid up. The liability of a WFOE company is limited to its equity. Privileges and obligations are, e.g.; The WFOE can generate income, can repatriate profits back to the investor’s home country, pays tax in China and registration requires an existing, foreign parent company already operation for a specific period of time. Find out more about this company type here.
This company type is to act as a liaison office in China of its foreign parent company. This type requires no registered capital. Its activities are restricted to carry out, e.g.; product or service promotion, market research, quality control (QC) liaison with suppliers/partners in China. An RO is not allowed to generate revenue or to enter into contract(s) with in China established businesses. Find out more about this company type here.
The JV company is again a limited liability company. It was the first available corporate business structure to allow foreign investment into China after China announced its "Open-Doors" strategy. The Joint Venture is formed between Chinese and foreign company investors. It is the preferred business model to gain fast access to the China business Markets and to profit from existing local business knowledge.Find out more about this company type here.
The newcomer in the world of Chinese corporate structure environment and relatively unexplored. This new type of business, also with many new features, was introduced to make entry to the Chinese market a lot more affordable (no registered capital necessary) thus but, also riskier for the parties involved since Directors are personally liable for the business. The FIPE can be registered either as a partnership between to foreign Nationals or one foreign and one Chinese national. Find out more about this company type here.
At Chinabiz21 we tried to build a China Company Formation info center, that will allow you to follow a clear path and guide in your China Business set-up endeavors. We attempted to load it with common sense and logic to allow you easy navigate through all aspects involving all types of company formation and business conduct rules in China. So let’s get started. Relax, you needn’t to be an executive chef, we will pick the ingredients for you.
depends on what your needs for doing business in/with China, are! Below is a short check-list that allows you to determine, or short-list the type right to fit your purpose.
If the above reflects your needs (at least close to), then perhaps the best solution for you would be to register a local representative office in China. As the name already suggests, with this type of company you will conduct your business activities in China on the basis of representing your parent company (overseas company headquarter).
If you have much greater needs then simply check out all the other types of companies listed in our company formation section, otherwise to find out more about theRepresentative Office type of company, simple click the next page button to continue.