Foreign investors commonly enter Mainland China through a Wholly Foreign-Owned Enterprise (WFOE) or a joint venture. The right structure depends on industry, licensing, capital planning and operational control.
Wholly Foreign-Owned Enterprise (WFOE)
A WFOE is a limited-liability legal entity in China owned by one or more foreign investors. It can conduct business within its approved scope and is widely used for consulting, technology, trading and other permitted activities.
Typical advantages
- Fuller operational control versus a representative office
- Ability to invoice and contract in its own name within scope
- Potential to convert and remit profits subject to regulations
- Clearer IP and management control versus many JV models
Joint ventures
Equity or cooperative joint ventures may be appropriate where a local partner, licence access or project collaboration is required. Capital requirements vary by industry and city practice; plan registered capital to cover initial operating costs.