Dispatches From China

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The smart way to incorporate in China

And now for something entirely practical. Wholly owned foreign entities (WOFEs) are the vehicle of choice for most people and companies doing business in China. It is less complex than a joint venture (JV) and allows you to concentrate on what your employees are up to as opposed to your partners.

This post is informational in nature. It is strongly suggested that if you intend to open a WOFE in China that you get a good lawyer who is in China, knows the laws and preferably, is licensed to practice in China. U.S. lawyers are fine if you need guidance on issues like U.S. tax and structuring, but more than likely they will farm out the incorporation work and charge you a fee for reviewing it.

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As always, check and recheck any referrals you get, China’s corporate laws are 30 years new and local government officials struggle to keep up, so interpretation can be variable.

A knowledgeable local lawyer is the best choice. Do not fall into the trap of assuming that a big city lawyer, for instance from Beijing or Shanghai, understands the conditions outside their respective city’s. Finding the right lawyer is another subject.

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