WHICH OPTION IS BEST FOR YOU
Choosing the right business structure is essential to starting a successful business in China. China Manufacturing Consultants can help you choose the right business entity to suit your needs, and make the necessary business applications to ensure the business set up runs smoothly.
Several different corporate structures are available to western companies in China. Each has advantages and disadvantages.
The structures include;
Wholly Foreign Owned Enterprise
A WFOE has become the most popular way to enter the Chinese market. It gives you complete control over your China operations without the risk of a dishonest partner. It also enables you to export to other countries and sell your products to the local Chinese market.
China is on the way to becoming the largest economy in the world and the WFOE is the easiest way to enter the market.
Having a representative office in China will allow you to conduct research and give you a creditable presents however there are limitations on what you can do.
A joint venture partnership offers a lower entry cost and you can benefit from a local partners experience and connections. In this case it is important to conduct a due diligence into any possible partners to ensure no encumbered debt and no partner dishonesty. It is recommended that any joint venture partner be legally restrained to prevent any copyright and IP infringements.
Virtual Joint Venture
The virtual joint venture is like having a factory within a factory. It is best suited for companies who don’t want to go it alone. It establishes a formal relationship with a trusted Chinese company and uses their factory and experience to manufacture your goods without risking copyright or the IP of your products.