PRC Entity Formation

Doing Business in China

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PRC Entity Formation and Corporate Services

Foreign investors can establish a business in China through certain types of investment vehicles.  The common forms of Chinese establishments include companies, joint ventures, representative offices and other types of entities.

The set-up process can be complex and challenging as it involves application and registration procedures with multiple governmental authorities, preparation of documents in specific formats, negotiation with relevant officer in-charge, and coping with the rapid changes in compliance and practical requirements.

Our professional team has in-depth knowledge of the Chinese corporate and tax laws, foreign investment policies, local regulations, and solid experience in dealing with the governmental authorities and tax bureaus in China.  We provide comprehensive advisory and implementation services no matter you are going to invest into China, handling local and cross-border matters, or planning to dispose of your China business.

Our one-stop Chinese company set-up services include:

  • Market entry advisory
  • Business name search and reservation
  • Prepare incorporation documents and assist in the notarization process
  • Apply for the Business License and company chops
  • Register with relevant authorities such as the Tax Bureau, Customs, etc.
  • Apply for import/ export licenses and other specific licenses such as the Food Permit, Internet Content Provider (“ICP”) License and etc., where applicable.
  • Open bank account and assist in the capital injection
  • Complete the tax registration/ authentication and apply for the tax machine and invoices
  • Apply for the Value Added Tax (“VAT”) general taxpayer status, if applicable
  • Provide guidance for the bank clearance for inbound or outbound payments
  • Advice on the China tax compliance requirements and handle relevant work


Apart from entity set-up and liquidation services, our full-fledge China corporate services also include:

  • Outbound money remittance tax filings and bank handling
  • Handling cross-border transactions
  • Opening bank account and handling banking matters
  • Transfer of equities
  • Changing company particulars
  • Providing office address
  • M&A and due diligence
  • Bookkeeping and accounting
  • Payroll services and tax reporting
  • Preparing employment contracts and termination agreements
  • Handling social securities
  • Visa application  

*We offer a full range of China bookkeeping and tax services. For details, please refer to our PRC Tax Services.

Forms of Entity in PRC


Wholly Foreign Owned Enterprise (WFOE)

A WFOE is a limited liability company established and owned by foreign investors, without the participation of any Chinese shareholders. A WFOE is an independent legal entity which can enter into contracts under its own name and carry out certain profit generating activities.  It has its own registered capital and management structure, and is taxed based on its actual incomes and expenses.

Key Features of a WFOE:

Suitable for full-fledged businesses in China

  • Allow foreign investors to fully maintain the
  • Allow foreign companies to conduct all range of business activities within the approved business scope in China.
  • Can repatriate profits to the foreign investors.
  • Can employ both local and overseas employees.
  • May be eligible for certain preferential policies.


Representative Office (RO)

An RO is an office established by a foreign company in China to engage in a limited range of activities. Strictly speaking, a RO may only conduct non-profit activities, such as marketing, liaison and other auxiliary activities. An RO can allow the foreign company to develop China connections and is a good stepping stone for foreign companies which would like to explore the China market without investing or maintaining a large sum of capital in China. It does not have registered capital and is usually taxed on a deemed basis.

Key Features of an RO:

Suitable for carrying out supportive functions in China – which may be expanded to certain extent to support your buy/sell activities 

  • Does not have an independent legal person status.
  • May only engage in supportive activities in China.
  • Does not need any registered capital
  • Is not allowed to employ Chinese employees locally. Such local employees must be hired through a qualified labour service agency.


Joint Venture (JV)

There are two types of JV for foreign investors and Chinese partners to do business together in China:

Sino-Foreign Equity Joint Venture (EJV)

An EJV is a limited liability company jointly owned and operated by foreign and Chinese entities, who share the risk, profit and loss according to the proportion of the capital they contribute.

Cooperative Joint Venture (CJV)

A CJV is established based on a business arrangement entered into between foreign and Chinese entities. A CJV can be a separate legal entity or a formation without legal person status. The joint venture partners may have separate rights and responsibilities according to the cooperation agreement, which provides flexibility in contributing capital into and extracting profits from such CJV.   

Key Features of a JV:

Suitable for investing into special industries which are not yet fully open for foreign investors

  • JV enables foreign investors to do business in sectors which exclude wholly foreign-owned investment.
  • The joint venture partners may adopt a profit sharing ratio that does not based on the proportion of their capital contributions.



Only a limited range of foreign entities, such as banks, insurance companies and legal practices may establish branches in China, subject to the approval of relevant governmental authorities.

Key Features of a branch office:

Suitable for certain specific foreign investors

  • Does not have an independent legal person status.
  • The foreign investor itself assumes liability for the operational activities of its branches in China.
  • Not suitable for generic investors to establish their businesses in China
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