What are the different legal set-up options available for starting a business in China?

Wednesday, 25 July 2012 12:46

 1.     Representative Office

 2.    Wholly Foreign Owned Enterprise (WFOE)

 3.     Equity Joint Venture (EJV) or Cooperative Joint Venture (CJV)

 4.     Foreign invested partnership enterprise

Each of these four options caters to different business needs and has its own set of requirements and restrictions. For example, Rep. Offices do not require minimum investment but are not allowed to conduct certain activities such as directly hire local employees and handle business transactions. Industry should be also considered by foreign investors. Referring to Catalogue of Industries for Guiding Foreign Investment some industries can be restricted to JV, which means that the only way for foreign investor to enter Chinese market in particular industry would be JV.

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