What are the different types of business entities available to operate in China?

In China, foreign businesses may choose from several types of business entities to operate. A wholly foreign-owned enterprise (WFOE) is a type of business entity that is wholly owned by foreign investors. WFOEs are generally used to engage in export and/or manufacturing activities in China. An additional type of business is a joint venture (JV). This entity is created through a contractual agreement between two or more parties, with at least one party being a Chinese entity. JVs are commonly used to access the Chinese market and for technology transfers. Another type of business entity is a foreign-invested commercial enterprise (FICE). FICEs are limited liability companies owned by foreign investors and are used in the sales and/or service sectors in China. They are similar to WFOEs, but are generally not used to engage in manufacturing. Finally, a representative office is a type of business entity that is used for market research and/or liaison activities. It is not a separate legal entity and cannot engage in sales activities. Representative offices are often used by foreign businesses to test the market before committing to setting up a more formal business entity. In sum, foreign businesses engaging in activities in China can generally choose between a WFOE, JV, FICE, or representative office. Depending on the nature of the business, any one of these business entities can be a good fit for engaging in activities in China.

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What are the different types of business entities available to operate in China?

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