A wholly foreign-owned enterprise or a representative office, usually held through Hong Kong — structured for tax, currency control and exit from the start.
Most foreign businesses enter mainland China through a wholly foreign-owned enterprise (WFOE) held by a Hong Kong company. The Hong Kong layer simplifies banking, dividend flows and any future sale, while the WFOE carries the licences, staff and invoicing inside China.
China is a substance jurisdiction: a real office address, a resident legal representative and registered capital paid in on schedule are not optional. We set the structure up so those obligations are planned rather than discovered.
China is one of the largest economies in the world, and after years of testing the market through agents and distributors, many foreign companies now establish their own presence there. Foreign investment is welcome in most sectors; the exceptions are set out in the government’s Negative List — media, broadcasting, certain internet and telecom activities and a number of other restricted or prohibited industries. Everything outside the list is open, most of it to 100% foreign ownership.
A company formed in China by a foreign investor is a Foreign-Invested Enterprise (FIE). Since the Foreign Investment Law took effect in 2020, the old equity and cooperative joint-venture categories have been folded into the general Company Law, so in practice there are three ways to establish a presence.
A Chinese limited liability company owned entirely by one or more foreign investors — usually through a Hong Kong holding company. Full control, the ability to invoice, hire and hold licences in China. The standard choice for most of our clients.
A limited liability company owned jointly with a Chinese partner. Used where a sector requires a local shareholder, or where the partner brings licences, distribution or relationships that a WFOE could not build alone. Rights and obligations are set in the shareholders’ agreement.
Not a separate legal entity and not permitted to trade, invoice or earn revenue in China. It may only conduct liaison, market research and coordination for its foreign parent. Where that is all the China activity requires, an RO is the simpler and faster route.
Shanghai, Shenzhen and Guangzhou are the usual bases; the holding and treasury sit in Hong Kong.
Choosing between WFOE and representative office, and the Hong Kong holding layer above it.
Name reservation, business licence, tax and customs registration with local partners.
Planning the amount and the paid-in schedule under the 2024 Company Law.
Onshore RMB accounts, capital account and the Hong Kong treasury account.
Monthly tax filings, annual audit and the Hong Kong holding company’s own compliance.
Manufacturers and traders with China operations, service companies with Chinese clients, groups needing an onshore presence.
A short call to recommend the structure, jurisdiction and bank for your case — fees quoted per case.
