This is the second in my series detailing the presentations made at the China Real Estate Seminar in SFO last week. This post is on the first day presentation given by Marshall Horowitz, an the head of Dreier, Stein & Kahan’s Asia Pacific Practice Group. Marshall began his career with Coudert Brothers in Hong Kong (he left well before its demise) and his practice today focuses "on advising both U.S. and international clients on a broad range of transactional matters, including mergers and acquisitions, business formations, venture capital and private equity transactions, private placements, licensing of intellectual property, and investment fund formation."
Marshall set out the various possible entities a non-Chinese company can form in China that would allow it to invest in Chinese real estate and then concluded that the only two that are really ever used are the wholly foreign owned entity (WFOE) and the joint venture (JV). The bottom line is that WFOEs are have become by far the most common investment vehicle for purchasing or developing real estate in China. Marshall also touched briefly on the forming of an offshore holding company to own the WFOE, which in turn buys the Chinese real estate.
