Corporate Establishment

Dezan Shira & Associates maintains one of the largest operations in Asia for registering foreign owned firms in China, Hong Kong, India and Vietnam. However our emphasis is on quality and speed not on volume.  We are a value added provider of registration services.  Before undertaking a registration we seek to understand what the company will be used for so that we can determine if the type of entity being requested is the most appropriate type for our client's needs.  We also advise our clients on the best way to hold entities so that they can best meet their goals and so that tax efficiency can be maximized.

Once the type of entity and its holding structure has been determined, we move quickly and efficiently to register that entity and to insure that all registration formalities are observed.  While there is no way to avoid all the formalities involved, there are often many legal ways to shorten the amount of time it takes before a company can begin operations.

Structures we are typically asked to form include Representative and Branch Offices, Wholly Foreign Owned Enterprises, Joint Ventures and Holding Companies. We also advise on national and international restructuring issues, corporate legal relocation matters, the cross border transfer of assets and machinery, and domestic and cross border mergers and acquisitions.

• Incorporation
• Representative Office
• Foreign-Invested Commercial Enterprises (FICE)
• Wholly Foreign-Owned Enterprises (WFOE)
• Joint Ventures (JV)
• Hong Kong and other offshore incorporations
• Foreign-Invested Partnership Company
• Fund Management Company

 

Representative Office

The representative office is the least dynamic of the entities for establishing a foreign presence in China. The RO can facilitate market entry and coordinate sourcing activities and marketing, but is a toothless version of the possible foreign entities that has little control over the movement and sale of goods and services. They are the extended arm of overseas parent companies and can only interact with Chinese businesses indirectly. However, less tangibly, they can offer a sense of the domestic market and help determine whether China’s 1.3 billion people and its complex business and legal structure are profitably navigable for your company.

Do you need to control the process of invoicing locally for services or products? If not, and you simply need a local presence capable only of the following permissible activities, then perhaps the RO is the most useful and inexpensive entity for your purposes.

 

Foreign-Invested Commercial Enterprises (FICE)

As part of its World Trade Organization accession process, China ratified regulations that permit foreign companies to establish fully operational wholly foreign-owned enterprises that can distribute, act as an agent, retail and wholesale domestically, source domestically, and import and export, and as of 2005, do so all over China. These companies, known as foreign-invested commercial enterprises (FICE), also enjoy the 100 percent foreign ownership by which WFOEs are defined. If you and your company are interested in exploring the possibility of establishing a trading enterprise in China, it is important to know what barriers, advantages and incentives await your organization.

 

Wholly Foreign-Owned Enterprises (WFOE)

The wholly foreign-owned enterprise has become the investment vehicle of choice for the international investor wanting to manufacture service or trade in China. In addition to the WFOE’s expansive business scope, its unrivaled popularity arises from multiple other factors, including:

• 100 percent foreign ownership and control
• Security of technology and intellectual property rights
• Self-developed internal structure
• Insertion of existing company culture
• Profit repatriation
• Domestic sales

 

Joint Ventures (JV)

Forming a joint venture in China can be a successful endeavor as long as each side’s goals, contributions and responsibilities are mutual and understood. Unfortunately, this is not always the case, and as a result the percent of total foreign investment allocated to JV establishment fell from 32.2 percent in 2004 to 22.8 percent in 2007.

This does not mean the JV is a deadweight entity. It has its purposes, though it is crucial the foreign investor understand what these purposes are and whether their Chinese partner is capable of providing them as claimed. The popular Chinese idiom “same bed, different dreams” has become the failed joint venture’s mantra.

 

Hong Kong and other offshore incorporations

 

Foreign-Invested Partnership Company

 

Fund Management Company

For more information about corporate establishment in China, please contact Dezan Shira & Associates.