Beijing Company Formation

Update Date:2015-9-15 10:06:19 Source:Tannet (Malaysia) Sdn Bhd Views:559

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There are several types of business setup in Beijing; the following are common types for business formation: 1.Wholly foreign owned enterprise (WFOE); 2. Representative office (RO); 3.Cooperative joint venture (CJV); 4. Equity joint venture (EJV);  5. Foreign invested partnerships enterprise (FIPE).

Beijing Company Formation-WFOE

The Wholly Foreign Owned Enterprise, abbreviated WFOE, is a common investment vehicle for mainland Beijing -based business. The unique feature of a WFOE is that involvement of a mainland Chinese investor is not required, unlike most other investment vehicles. WFOEs are limited-liability corporations organized by foreign nationals and capitalized with foreign funds. This can give greater control over the business venture in mainland Beijing and avoid a multitude of problematic issues which can potentially result from dealing with a domestic joint venture partner.

Beijing Company Formation -RO

A Chinese representative office (RO) is an institute setup in Beijing, representing its parent corporate for liaison with Chinese counterparts. A RO is not considered to be a separate legal entity. It can not directly engage in business operation. However, through which its parent corporate can enter into contracts with its supplier/customers in Beijing in its own name, but not under the name of RO. A representative office is popular for those who are willing to enter Beijing at the test period of business and investment.

Beijing Company Formation-CJV

In most respects, CJVs are structurally similar to EJVs. Unlike EJVs, however, CJVs can be established either as a limited liability company as a non-legal person, in which the partners are subject to unlimited liability and thus entirely liable for any losses. The rights and obligations of the JV partners concerning issues such as distribution, investment, operation and sharing of profits/losses and risks are determined by the individual joint venture contract.

Beijing Company Formation-EJV

The corporate form of an EJV is the limited liability company, which possesses the status of a Chinese legal person. It involves joint investment and operation and the sharing of profits and losses, as well as risks in proportion to the partners’ respective shares in the registered capital.

Beijing Company Formation-FIPE

The Foreign Invested Partnership Enterprise (FIPE) is a unlimited liability business entity without minium requirements on registered capital.A partnership in the People's Republic of China is a business entity governed by the Partnership Enterprise Law passed by order of the President of the People's Republic of China to authorize and govern partnership enterprises. A partnership is a type of business entity in which partners share with each other the profits or losses of the business undertaking in which all have invested.

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