China Company Setup Services

We support the setup, handling and management of business structures in China.
Representative Offices (RO), Joint Ventures (JV), Wholly Foreign-Owned Enterprises (WFOE)

Operational throughout China, our mission is to guide foreign companies through China’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region.

With more than 15 years of experience working with foreign companies, our professional teams are close to the local authorities, banks, and business consultants, ensuring clients are able to leverage our resources locally.

We are the one-stop service provider and your trustworthy partner for growth in Greater China.

We provide advice on the setup, handling and management of business structures in China. These include:

  • Application of Company Name
  • Application of Business License
  • Application of Company Chops

Our services cover all aspects of the registration process:

  • Application of Company Name
  • Application of Business License
  • Application of Company Chops
  • Bank Accounts Opening –Capital Account (SAFE) and RMB Operational Account
  • Registration with Customs Bureau and Tax Bureau
  • Social Benefits Accounts Setup
  • Industry Related Special Licenses and Registrations

Our team also helps you to make necessary changes to the China structure including:

  • Restructuring, reconstruction, de-registration and liquidation
  • Register Capital Increase
  • Change of director, legal representative, register address, company name…etc

Corporate Establishment

Foreign investors have a number of options available when deciding which type of FIE to use when establishing a presence in China. Different types of FIEs offer varying levels of flexibility. Acadia advises businesses on the most appropriate investment vehicle to use based on each client’s industry sector and intended commercial objectives.

The more commonly used types of FIEs available in China and their relevant capabilities and restrictions are outlined as follows:

  • Representative Offices (RO)
  • Joint Venture (JV)
  • Wholly Foreign-Owned Enterprises (WFOE)

REPRESENTATIVE OFFICE (RO)

Representative offices are relatively easy to establish compared with other FIEs. ROs can provide foreign companies with a presence in China but are not separate legal entities from their parent company.

The activities that ROs are permitted to carry out are limited to liaison work, relationship building and other related activities. ROs are restricted from direct trading or distribution activities in China, and are not allowed to issue invoices or receive payments.

Acadia is up to date with the latest regulations for Ros and will advise and guide your company through the decision-making and setup process.

JOINT VENTURE (JV)

In a JV business arrangement, participants (Chinese investors and foreign investors) create a new entity or official contractual relationship. The investment, operational expenses, management responsibilities, profits and losses are shared between the parties.

JV’s remain the only way to register in China if the business activity in which it will operate remains controlled by the government such as buildings and construction and car manufacturing.

Arcadia collectively has decades of experience managing JV partnerships in restricted sectors of the Chinese market.

WHOLLY FOREIGN-OWNED ENTERPRISE (WFOE)

WFOEs are legal entities in China that are 100% funded by foreign investors. The most effective approach for a foreign company wishing to do business in China is to first incorporate in Hong Kong and then establish a WFOE in Mainland China. A WFOE can provide foreign investors with complete autonomy as well as increased protection of their intellectual property in accordance with international law.

By providing investors with complete domestic retail and wholesale distribution rights, WFOEs remove the operational risk that arise from having a Chinese partner in many industry sectors. As a consequence, WFOEs are the most popular type of FIE currently used by international investors.

In addition to conducting sales, marketing, consulting, trading, warehousing, manufacturing and delivery services in China, a WFOE can also issue official invoices and sign commercial contracts.

A WFOE is only allowed to operate within the business scope specified in its business license. If a WFOE decides to pursue activities other than the ones included in its scope of business, it must first gain approval from the relevant authorities, a process which is neither automatic nor simple. Acadia has years of experience handling the procedures for such approvals.

REPRESENTATIVE OFFICE (RO)

Average Set-up time 1 – 2 months

Employment Restriction

  • Not allowed to hire employees directly.
  • May hire employees through third party HR service providers.
  • A maximum number of 4 foreign representatives.

Mandatory Named Position

  • Only the Chinese name will be legally binding, the English name is not legally relevant for Chinese authorities.
  • Normally the composition of the company name will be “Overseas Headquarters” name + City + Representative office.

Registered Capital
None Required

Corporate Governance
1 Chief Representative to be the liaison point between RO and the P.R.C. authorities

JOINT VENTURE (JV)

Average Set-up time 3 – 4 months

Employment Restriction
May enter into employment contracts with employees directly or through third party HR service providers

Mandatory Named Position

  • Only the Chinese name will be legally binding; the English name is not legally relevant for Chinese authorities
  • The word “China” may not be freely included in the Chinese name
  • Normally the composition of the company name will be “Name + Business Nature (i.e. Trading) + City + Limited Company”

Registered Capital

  • Company must be deemed to have a good reputation
  • No past record of violations of China law and regulations
  • General period of operation of JV shall not exceed 30 years, and for those located in the middle and western regions, shall not exceed 40 years

Corporate Governance

  • Board of Directors (at least 3) or 1 Executive Director
  • 1 General Manager
  • 1 Legal Representative acting as liaison between the JV and the P.R.C. authorities (may undertake other roles concurrently except that of supervisor)
  • 1 Supervisor to ensure legal compliance (may not undertake other roles)

WHOLLY FOREIGN-OWNED ENTERPRISE (WFOE)

Average Set-up time 2 – 3 months

Employment Restriction
May enter employment contracts with employees directly or through third party HR service providers

Mandatory Named Position

  • Only the Chinese name will be legally binding; the English name is not legally relevant for Chinese authorities
  • The word “China” may not be freely included in the Chinese name
  • Normally the composition of the company name will be “Name + Business Nature (i.e. Trading) + City + Limited Company”

Registered Capital

  • No minimum registered capital required and it will not be shown on business license
  • No minimum cash required for capital injection but capital registered should still be injected accordingly
  • Contribution of registered capital can be in four forms: capitals, cash, IP rights and land use rights
  • No deadline on capital injection, but it should be injected within a maximum of 30 years, in practice, we recommend within 10 years
  • Note that the capital to be registered should still be reasonable and indicative of the WFOE’s nature

Corporate Governance

  • Board of Directors (at least 3) or 1 Executive Director
  • 1 General Manager
  • 1 Legal Representative acting as liaison between the WFOE and the P.R.C. authorities (may undertake other roles concurrently except that of Supervisor)
  • 1 Supervisor to ensure legal compliance (may not undertake other roles)

Schedule a China Company Setup Consultation

Schedule a Consultation with Acadia Advisory to discuss our China company setup & market entry services and learn more about how we can assist your company in China.