Foreign investors all over the world have the opportunity to
enter the Chinese market, one of the most important in the world, and have
access to a market of 1.3 billion consumers. China is the second largest
economy in the world and offers the possibility for foreigners to open a
special type of company - the wholly
foreign owned enterprise (WFOE). The share capital of this
company must be provided by the foreign citizen(s)/ legal entity(s) that are
founders of the Chinese WFOE.
The foreigners are allowed to take the profits
out of China, in their resident countries. They don’t have access to all the
economic fields in China, there are some restrictions, but other sectors of the
economy are largely opened to foreign investments, such as new technology and equipment,
the development of new products or energy preservation etc.
WFOE is a sort of
limited liability company and it is a legal entity that can be used for
different business purposes. There is a law that regulates the activities of
WFOEs in China and, if you need more information about that, you may contact
our local
lawyers. The minimum share
capital for this type of company is different according to field of activity
chosen by the investor.
Other types of
entities that can be set up by foreign entrepreneurs in China are:
partnerships, representative offices, Hong-Kong or Shanghai free-trade zone
companies. The companies opened by foreigners in China must be registered with the State
Administration for Industry and Commerce and obtain an approval for operation from the Ministry of
Commerce.
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