Formation flagship · RO vs WFOE · First hire · Profit remittance · Liquidation · Negative list.
The default operating company is a WFOE if the sector is open: it can contract, issue fapiao and hire. A representative office is liaison only — it does not trade and does not hire PRC staff the way a company does. A JV is for when the Chinese partner’s licence or channel is the product, not a default “friendlier” form. A VIE is a listing / restricted-sector structure, not a fourth box on a market-entry form. Read the foreign-investment negative list first. Capital contribution is a Company Law clock (the five-year theme). People, dividends and exit each have their own guide.
At a glance
| Question | Short answer |
|---|---|
| Default if we sell and hire? | WFOE, if access is open. |
| Can an RO invoice? | No — that is the usual failure. |
| When a JV? | When you need the partner’s asset, not for politeness. |
| Is VIE “option D”? | No. |
| Setup time? | Bands of weeks to a few months after access is clear — not an SLA. |
Scope and legal framework
Foreign Investment Law + negative list. What foreigners may do is an access question first. Prohibited or restricted sectors rewrite the tree before you pick a form.
Company Law (capital contribution). Registered capital is a legal contribution clock, not a tourist deposit. See the five-year capital page for the current rule.
RO registration practice. A representative office may not engage in operational activities. Staffing PRC employees is typically via a qualified dispatcher — see the first-hire page.
Practical workflow (WFOE default)
- Negative list + whether you must collect RMB and hire.
- If WFOE: name, lease, FI information report, business licence.
- Chops, bank, tax — then you can operate.
- First employee: hire roadmap.
Common mistakes
- Opening an RO “to try selling.”
- JV with no deadlock or IP clause.
- Calling a VIE a WFOE alternative on a board slide.
Action checklist
- Sector access written down.
- Must we invoice and hire? If yes, not an RO.
- Partner indispensable? Only then JV.
- Capital and legal-rep named.
- First-hire and remittance pages booked as follow-ons.
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