China Law Blog provides a full range of professional services for foreign investors targeting to enter or operate in China. Our services include, among others, offshore incorporation (Hong Kong, BVI, Seychelles, Marshall Islands etc.), China company formation (WFOEs, representative offices, Joint Ventures) and investment consulting services (China investment project management, due diligence, M&A, corporate restructuring, auditing, accounting services etc.) Different Company Types in China

We have a clear focus on small and medium size businesses, including family-owned businesses and entrepreneurs, and strive to provide them the full range of services as they enter the Chinese market. No other advisory firm truly understands the needs of this market segment better than us. Furthermore, our qualified and multi-cultural staff, with years of experience in company formation, China market entry advisory, tax, accounting and audits, investment project management and more, are well prepared to guide entrepreneurs and SMEs in entering and succeeding in China.

Equity Joint Venture (EJY)

l The foreign investors will have a holding of at least 25% in the Chinese company.

l The registered share capital must cover a specific percentage of the total investment in the company. This percentage varies between 33% (an investment of over $ 36 million) and 70% (an investment of under $ 3 million).

A Joint Cooperative Venture (CJV)

l A Joint Cooperative Venture is usually set up for a specific project or partnership for a period of time that is defined in advance.

Wholly Foreign Owned Venture (WFO)

l There are no minimum or maximum limits regarding the amount of the foreign investment.

l In recent years over 65% of foreign investments in China have been in the form of a WFO, mainly because of the absence of a minimum investment requirement.

Chinese Holding Company (CHC)

l This is intended for a company that is interested in consolidating a number of investments in China to one body.

l There are legal requirements in China regarding the credit rating of a foreign investment in a CHC. The total value of the investor's assets and his investments in a company in China must be in excess of the legally defined minimum.

Joint Stock Company

l The minimum registered share capital is CNY 30 million. The minimum for a company traded on the Stock Exchange is CNY 50 million.

l The foreign investors' share must be at least 25% of the registered capital.

Branch

l At present, only foreign companies in the financial and services sector, subject to the restrictions specified in Chinese law, may set up a branch in China.

Representative Office (RO)

l A representative office is a type of operation with low financial expenses.

l The aim of the RO is the creation of a presence in China and promotion of contacts/supervision/management investigations in China.

l The RO may not issue accounts to the Chinese market for sales and services in China.

Advantages and disadvantages of setting up company in China