Wednesday, July 5, 2017

Starting a Business in... China

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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