Types of Business Presence in China:
Before starting up a business in China, you have to know what the options are. Foreign Investors generally establish a business presence in China in one of five ways:
1. Wholly Foreign Owned Enterprise (WFOE);
2. Partnership Enterprise (PE)
3. Representative Office;
4 . Joint Venture
5. Hong Kong company.
The differences between each of these are summarized here: 5 modes of business presences in China.
Although there's no min. registered capital required for most WFOEs, it's still advisable to pick up a registered capital within RMB 100,000~ RMB 500,000 (approx. 11,500 ~ 57,000 EURO) for Consulting, Service, Trading or Hi-Tech WFOE registration in cities like Guangzhou, Shanghai, Beijing, Shenzhen, Hangzhou, Ningbo, Tianjin, Chengdu etc. Please contact a Path To China office at the bottom of the page for practical advice if you are planning to incorporate a WFOE in China.
A Foreign Invested Partnership Enterprise (FIPE) may worth a try if investors don't want to put much capital to establish a business in China.
After China’s entry to the WTO, most industries in China welcome foreign investment. WFOE establishment in China became the first option for foreign investors (instead of Rep. Office) in China. At the mean time, for tax purpose, an effective licensing system, and other reasons more and more investors use Hong Kong as the holding company to invest in mainland China, using this offshore company to hold their operations in China.
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