China Company Set Up – Business Types

China is one of the world’s fastest-growing economies, offering vast opportunities for foreign investors. Shenzhen, as a leading business hub, provides advanced infrastructure, innovation-driven growth, and favorable policies, making it an ideal city for establishing a company and expanding your business in China.

For international entrepreneurs, understanding the available business structures is the first step toward entering the Chinese market. Below are the most common types of company setup in China:

1. Wholly Foreign-Owned Enterprise (WFOE)

A WFOE is a limited liability company established entirely with foreign capital. Unlike joint ventures, no local Chinese partner is required. This structure gives foreign investors full control over operations, strategy, and profit distribution, while avoiding potential conflicts with domestic partners. WFOEs are widely chosen for long-term, independent business development in China.

2. Representative Office (RO)

An RO serves as a liaison office for foreign companies seeking to explore the Chinese market. While it cannot directly engage in profit-making activities or issue invoices, it allows the parent company to conduct market research, build partnerships, and sign contracts in its own name. ROs are popular for investors wishing to test the market before committing larger resources.

3. Cooperative Joint Venture (CJV)

A CJV can be structured as a limited liability company or as a non-legal person entity. The rights, obligations, and profit-sharing arrangements are flexible and based on the joint venture agreement. This model is suited for projects where both foreign and Chinese partners bring unique resources and expertise.

4. Equity Joint Venture (EJV)

An EJV is a limited liability company with Chinese legal person status. Both foreign and Chinese partners contribute capital, share risks, and distribute profits in proportion to their investment. This structure is often used in industries where cooperation with a local partner provides strategic advantages.

5. Foreign-Invested Partnership Enterprise (FIPE)

A FIPE is a flexible structure without minimum capital requirements. It can be established either as a general partnership, where partners bear unlimited liability, or as a limited partnership, where at least one partner assumes unlimited liability. This model provides flexibility and shared responsibility among investors.

Why Choose Tannet

Entering the Chinese market requires careful planning, compliance, and local expertise. Tannet provides one-stop professional services for global investors, including:

• Company registration and structuring advice
• Government liaison and compliance support
• Tax planning and financial management
• Trademark and patent registration
• Office location assistance, HR and payroll solutions
• Business advisory and ongoing operational support

Contact Tannet

For investors seeking to establish a business in China, Tannet provides comprehensive, end-to-end support. Our team of experienced professionals delivers tailored solutions to navigate regulatory requirements, optimize business structures, and safeguard your investment, ensuring a seamless and successful market entry.