Office Set Up for Branch or Representative
Several possibilities exist for establishing a business presence in China, which each requiring different legal set-ups and providing differing access to the Chinese market. These include a Representative Office, a Joint Venture or a Wholly Owned Foreign Enterprise. There are fairly rigorous and rigid procedures which must be adhered to in order to correctly register the RO, which can lead to refusal of your licence if you are unfamiliar with Chinese laws and bureaucracy.
An RO is perhaps the most basic form of investment in China which is essentially a derivative of a parent company. It enables a business to acquire office space and open bank accounts but cannot engage in direct business activities. A JV is different to an RO in a crucial way. It is a limited liability company and is able, therefore, to buy land, construct buildings and hire local labour independently. A WOFE is yet another method of investing in China which gives the foreign investor complete control over the investment plans of the firm, without any Chinese intervention. There are drawbacks to this such as the lack of established Chinese contacts and a minimum capital requirement, but there is total control over company policy.
When preparing the request for establishing any of the above types of venture a veritable mountain of documents is required. These must be completed and registered in the correct order, all with different registration bureaux, with different the various departments each requiring different documentation. Only after this potentially drawn out procedure can you be given a licence to conduct business, which still may be refused, if the documentation fails to satisfy the authorities.
To those unaccustomed to Chinese law and bureaucracy, setting up any kind of venture is a complex process which can present you with one of your biggest hurdles in China. This is why we offer you our business advice and registration service. Our highly qualified staff are able to help you with all the procedures from start to finish, from defining the aim of your business to preparing and advising on all the necessary documentation.
If you are at all unsure about which type of venture is most suitable for your business, we can give you comprehensive advice on which is best for your individual circumstances. We will examine your business plan and make the appropriate choice for your business to succeed. Because of our extensive experience in China we are able to streamline the necessary processes with our network of local authority and government contacts. This will ensure that your representative office will be set up as soon as possible and without any hassle.
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