Foreign Investments in China: Are Foreigners Allowed to Open a Company in China?

Are you considering setting up a business in China? It pays to note that this is a decision you should make after careful thought. There is such a raft of laws and regulations around the establishment of foreign investments in China. Liaison with companies that offer accounting services in China will be a good move for any foreign investor entering the Chinese market.

A highlight of the Basics Foreigners Setting Up Companies in China Should Know 

There are several things that any foreign investor looking at the Chinese market as a base for setting up should take into consideration and ensure that they get right. One of these decisions that will have such a strong influence on the success of any foreign venture in China is the company structure with which one will be starting operations in China. 

And talking of the company structure with which to begin your operations here, you should consider this decision after considering many factors. Key amongst these are the questions of the industry within which the foreign investor will be operating and the particular business activities in which they will be involved. Please look at some of the company structures foreigners can consider as they seek to establish a legal presence in China.

What are Some of the Company Structures Open to Foreigners Setting Up in China? 

Looking at the legislative provisions in China, we have three main ways that foreign investors can opt for as they look forward to establishing a presence in this country, China. You can choose to set up a; Wholly Foreign-Owned Enterprise, a Joint Venture, or Representative Office 

Having said this, we should note that there are other modes of establishment foreign investors can use to enter the Chinese market, but these are not as utilized. For the sake of this article, we will narrow on the most common and widely used vehicles a foreigner can use to establish their operations in China 

Wholly Foreign-Owned Entity, WFOE

Of the options mentioned above for entry into the Chinese market, the one that has been most commonly used is the Wholly Foreign-Owned Entity route. When you set up as a WFOE in China, this essentially means that the entity is being set up exclusively on the foreign investor’s capital. Setting up as a WFOE gives you, as an investor, absolute control of the enterprise. And it is in this we see why it remains the alternative preferred by many foreign investors going to China. 

Joint Venture Foreign Investment 

Setting up a joint venture is another entry vehicle you can use as a foreign investor getting into the Chinese market 

Conclusion 

You will need a specialized team to help with your accounting in China. Consider a company with vast experience in the Chinese market and one that can advise you appropriately on what is required for you to register a foreign company in China. Remember to get it right from the ideal company structure to enter the Chinese market, proper legal advice, tax advice, and accounting services in China.