Starting your business in China requires a lot of preparation and can be a tedious and complex process.
First of all, you need to make a choice of legal structure. Masson de Morfontaine helps with registration of two the most favored investment vehicles in China - Wholly Foreign-Owned Enterprises (WFOE) and Representative Offices (RO).
There are three types of WFOE:
- Manufacturing WFOE - allows to manufacture goods in China
- Consulting WFOE - allows to provide consulting & services
- Trading WFOE or FICE (Foreign-Invested Commercial Enterprise) - grants import and export licenses and allows to trade
WFOE is the most popular choice of foreign investors, because it’s 100% owned by the founder and established entirely with foreign capital. This gives investors a higher level of independence, control and security over its business activities.
A WFOE can engage in approved business activities and issue invoices. Representative Office, on the other hand, is not allowed to engage in any profit-making activities, including manufacturing, production and sales, and cannot issue invoices. However, a RO may perform market analysis and coordinate your marketing activities in China.
Regardless of your choice, the set-up procedure can be lengthy and will depend on the type of legal entity, the city where you choose to set it up and how quickly you can prepare all the necessary documents. All legal documents for company incorporation should be in Chinese and the registration process may take up to 6 months.
Our WFOE incorporation package