Twice in the last couple of months while working on registering WFOEs for clients, clients have come to us and asked our thoughts about switching their WFOE formation cities. In both cases, their basis for questioning came from having heard that some nearby city was easier for a China WFOE formation and had better labor… Continue Reading
Tag Archives: China WFOE
How To Start A Business In China. The Minimum Capital Requirements For A WFOE, Part II — The Goldilocks Rule
Posted in Basics of China Business Law, Legal NewsCompanies seeking to form a WFOE in China are often confused about Chinese law regarding the minimum registered capital requirements for forming a WFOE. Part of the confusion stems from disreputable entity formation companies that encourage their hiring by claiming they know exactly how much will be required and that they have the ability to… Continue Reading
FICE — A China WFOE Or Joint Venture By Any Other Name.
Posted in Legal NewsA couple of years ago, we did a post on FICEs, entitled, The China FICE — Foreign Invested Commercial Enterprise. The reason we did that post then (and the reason we are doing this post now) was to clear up common confusions regarding FICEs, which really are nothing more than a subset of Wholly Foreign Owned… Continue Reading
Buying And Selling China WFOE Shell Companies. Not In My Lifetime?
Posted in Legal NewsEvery few months or so (including this morning) I get an email or a call from someone who wants to know if my law firm has any clients that might be interested in buying a shell China WFOE. And every few months or so (including this morning), I say “no.” Let me explain. The people… Continue Reading
How To Form A China Company (WFOE or JV). Hong Kong Entities. They’re Baaaaack. Part II.
Posted in UncategorizedLess than a month ago, we wrote a post, entitled, How To Form A China Company (WFOE or JV). Hong Kong Entities. They’re Baaaaack. The gist of that post was that my law firm was now favoring the forming of Special Purpose Entities in Hong Kong to hold the soon to be formed Mainland China Wholly Foreign… Continue Reading
Suing A China WFOE’s Parent In A U.S. Court, Part II.
Posted in Legal NewsI Suing A China WFOE’s Parent In A U.S. Court. That’s A Tough One, we recently wrote on the ConocoPhillips case, in which a group of Shandong fisherman are suing ConocoPhillips in the Southern District Court of Texas for compensation arising from a couple of oil spills in Bohai Bay. We wrote of how we… Continue Reading
Suing A China WFOE’s Parent In A U.S. Court. That’s A Tough One.
Posted in Legal NewsJust read a China Daily article on how a group of Shandong fisherman are suing ConocoPhillips in the Southern District Court of Texas for compensation arising from a couple of oil spills in Bohai Bay. Three U.S. law firms are handling the case: Bilek Law Firm LLP in Houston, Smith Stag LLC in New Orleans,… Continue Reading
China Employee Contracts And Employee Manuals. Not Optional.
Posted in Legal NewsCo-blogger Steve Dickinson wrote an email to a client the other day that nicely sets forth much of what is involved with China employment agreements and with China employee manuals. Steve sent this email after having completed the first draft of the client’s employment contracts and its employee manual, both of which documents are absolutely… Continue Reading
China Taxes And Illegal Landlords. Because It’s YOUR Money.
Posted in China Business, Legal NewsHow to form a China WFOE.
Are You Selling In Or To China? If Not, Why Not?
Posted in China BusinessAround two years ago, the China business at my law firm underwent a major shift. Around that time, the bulk of our clients were companies seeking to profit from China, as opposed to save money from China. In other words, we started getting more work from companies selling into or in China as opposed to… Continue Reading
It’s Your Business. Not Your Chinese Partner’s.
Posted in China Business, Legal NewsIf you are a foreign business, it will not be easy or cheap for you to set up a business to operate legally in China. The following is just the most basic of lists of what you need to do to set up and operate legally in China: Register your legal entity in China. This… Continue Reading
How To Form a China WFOE. Scope Really Really Matters.
Posted in China Business, Legal NewsPretty much every week my law firm gets contacted by an American or European company with big plans for China. Almost invariably (and this is a good thing), this company has spent tens of thousands of dollars in researching China for their business and in travelling back and forth to China to scope things out…. Continue Reading
Doing Business In Or With China. Ask Yourself These Questions.
Posted in Basics of China Business Law, Legal NewsA consultant friend of mine is leading a very large group of American businesses to China for a big exhibition. He is putting together a short manual for these businesses and he asked me to help put the bug into the ear of these businesses that they should not be ignoring China legal issues. … Continue Reading
China Law. Do Not Try This At Home. Please.
Posted in Basics of China Business Law, Legal NewsA reader sent me an email today with a link to a discussion on a LinkedIn group regarding the cost of setting up and doing business in China. The discussion began with someone seeking information regarding the best way to set up a business in China and information about what that will cost. I am… Continue Reading
Minimum Capital Requirements. Good News For Small Companies Looking At Shanghai.
Posted in Legal NewsBy: Steve Dickinson Shanghai has recently loosened its minimum capital requirements for WFOEs (Wholly Foreign Owned Enterprises), making location of service businesses in Shanghai far more attractive. Chinese company law mandates all one shareholder corporations have a minimum registered capital of at least RMB100,000. The WFOE formation regulations provide for no specific amount for registered… Continue Reading
China Business. China Jails. China Hostages.
Posted in Legal NewsNearly every time I write on this topic, I get at least one email from someone accusing me of fear mongering. I used to dispute that accusation, now I heartily embrace it. I embrace it because the overwhelming majority of foreign companies doing business in China make no allowance even for the possibility of one… Continue Reading
Forming A Chinese Company. Do It Right Or Do It ALL Wrong, But Don’t Do A Rep Office.
Posted in Basics of China Business LawEvery couple of weeks my firm gets an email or a phone call from a small business that is seeking to justify forming a Rep Office in China instead of a Wholly Foreign Owned Enterprise (WFOE). These small businesses typically go into advocacy mode explaining why their business can and should be a Rep Office… Continue Reading
Eight Big Mistakes To Avoid In China.
Posted in China Business, Legal NewsOne of the favorite topics among China lawyers is the big mistakes they have seen their clients, rejected clients, and others make when trying to navigate China. The discussion usually transpires with one attorney telling the facts, with the others then giving a knowing laugh and nod and then trying to top it. Had this… Continue Reading
On Leasing A China Factory. Get WFOE.
Posted in Basics of China Business Law, Legal NewsWe received an email today from a China consultant with whom we have worked in the past. This consultant has a client who wants to lease a factory in China: We have a client whose business is exporting ___________ materials from China mostly to Eastern Europe. His clients are big __________ plants who always have… Continue Reading
How We Really Feel About China, Part II: Joint Ventures. We Love Them AND We Hate Them.
Posted in Legal NewsThis is part II of our relatively new series setting forth how we “really feel” about the issues that have generated controversy on our blog over the years. Part I dealt with guanxi and the comments to that post alone have made it a great read. We started this series because “we have taken many… Continue Reading
How To Start A China Business — Representative Office
Posted in Basics of China Business LawI am always saying that for every 100 China WFOEs and Joint Ventures my law firm helps set up in China, it does one representative office. Why so few, when it is generally agreed that representative offices are the easiest type of offices for foreign firms to set up in China? Because the inherent limitations… Continue Reading
Hiring A Chinese Employee Without A Chinese Entity. Good Luck With That.
Posted in Legal NewsAmerican companies are constantly asking us to draft employment contracts between their American company and their Chinese “employee.” One big problem. Such contracts violate Chinese law. Under Chinese law, only Chinese entities are allowed to have employees based in China. in addition, China does not generally allow for the hiring of independent contractors. If a… Continue Reading
Operating Illegally In China. Half-Assing It Does Not Help.
Posted in Legal NewsFairly regularly, we get an email from a foreigner living in China who wants to go into business in China with their girlfriend/fiancé/wife’s family (yes it is always a male). This person wants to know how they can do this and we tell them that there are really only two ways. One is as a… Continue Reading
Shutting Down A China WFOE. The Potential Repercussions.
Posted in Legal NewsNot sure why, but my firm has done more business shutting down WFOEs (a/k/a WOFEs) over the last three months than in any other 12 month (not three month) period. We also have been getting a whole slew of questions regarding the logistics in shutting down China operations. I know the recession has something to… Continue Reading
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