Legal structure and Incorporation
A local presence enables the business to have ultimate control over their strategy and profit, but with a lot more aspects to consider.
In working out the most suitable type of corporate entity to be established in China, it is essential to examine the nature of the business activities in which the foreign investor wishes to engage. Among the types of legal entity that a FIE could adopt, each is unique with distinctive administrative requirements, incorporation processes, and capitalization requirements, while each has its own advantages and disadvantages.
Below are the most common legal structures available to foreign investors:
- Wholly Foreign Owned Enterprises (WFOE)
- Representative Offices (RO)
- Joint Ventures (JV)
- Hong Kong private Companc
With Hong Kong and Singapore seen as the gateway to enter China and other parts of Asia, it is an effective approach to adopt an intermediate holding company (a Hong Kong limited liability company or a Singaporean limited liability company) to the ultimate business in the destination country. Such corporate structure provides a set of benefits including:
- Flexibility in corporate restructuring
- Facilitating transactions with offshore counterparts
- Tax savings
- Mitigation of Risks
- Global presence and recognition
Setting up a presence requires careful planning, prudent analysis, time, experienced professional guidance, and team effort. Together with China incorporation, we advise and implement the most suitable corporate structure for international businesses.