Company Formation In China
- The following flowchart illustrates the procedure for setting up a WFOE (Wholly Foreign-Owned Enterprise) in China:
It is an office established by a company to conduct non-profit practices, such as marketing and other non-transactional operations in a foreign country.
It is a business arrangement in which two or more parties agree to combine their resources for the purpose of accomplishing a specific task. A Chinese party and a foreign party merge their resources and expertise to reduce the exposure of risks from other businesses and to create new business projects or activities. Participants in a JV are responsible for their management, profits, losses, and all costs associated. However, the business is deemed as a separate entity, apart from the other participant’s benefits.
There are 2 types of joint ventures:
An EJV is an independent legal entity with limited liability. Profit and risk sharing in an EJV are proportionate to the equity of each partner in the EJV.
A CJV’s profits are allocated according to the terms of the co-operative venture contract rather than the proportion of their input in the registered capital, which offers greater structural flexibility over an EJV.