During the first 25 years of China’s opening up process, joint ventures were the favored vehicle for FDI in China. In 2005, the favored form of investment shifted away from JVs to direct investment through WOFEs (Wholly Foreign Owned Entities). During the last year, however, foreign SMEs have been shifting away from WFOEs and back… Continue Reading
Tag Archives: JV
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
When In China …. China Labor Law Controls
Posted in Legal NewsJust received an email from a friend stating/asking the following (note that I have changed some elements of the email to strip it of any even potentially identifying information): I am heading off again to work for a few years at our China Rep Office. My new employment contract with the head office says that… 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
How To Form A China Company (WFOE or JV). Hong Kong Entities. They’re Baaaaack.
Posted in Legal NewsBy: Steve Dickinson When making a WFOE (Wholly Foreign Owned Enterprise) or JV (Joint Venture) investment in China, the investor must consider: who will be the shareholder in the PRC entity? Will the investor invest directly, or will the investor create a special purpose subsidiary company (an SPV or Special Purpose Vehicle/a/k/a SPE or Special… Continue Reading
China Joint Ventures That Make Sense
Posted in China BusinessBeen writing a lot about China Joint Ventures of late, for many reasons. First, I am going to be speaking in Hong Kong in mid-October on this very topic. Second, there has been of late a sort of mini-resurgence in China JVs. Third, others, including Rich Brubaker over at All Roads Lead to China, have… Continue Reading
Top Ten China Mistakes
Posted in China BusinessCame across a really good list of mistakes businesspeople make in China. The list, entitled, “Top Ten Mistakes Businessmen Make in China,” was compiled by Stanley Chao, of All In Consulting. It really is a nice collection of tips and I present them below, with my comments in italics. Take the trust factor out. All actions… Continue Reading
China Joint Ventures And WFOEs. Don’t Jump The Gun On Your Capital Contribution.
Posted in Legal NewsNot sure why (the bad economy?) but we have been getting a rash of China joint venture deals and possible deals over the last six months or so, many of which involve a United States company wanting to enter into a Joint Venture with their China manufacturer so as to work jointly on manufacturing and… Continue Reading
Doing Business In China By Starting A Business In China. The Legal Basics.
Posted in Basics of China Business Law, Legal NewsOne of the most common calls my law firm receives is the one from someone saying that they want to “start a business in China.” The first thing we do with that sort of caller is to seek to ascertain whether a China business is actually necessary. Forming and then operating a business entity in… Continue Reading
How To Survive A China Joint Venture. Or Not.
Posted in Legal NewsEarlier this week, I was talking with a client regarding a potential China Joint Venture (JV). In our initial conversation, I told him of how difficult and yet important it is to do joint ventures correctly from a legal perspective and of how negotiating joint venture deals can be so time consuming and then had… Continue Reading
China Joint Ventures Tips. You Have Been Warned.
Posted in China BusinessThe Foreign Entrepreneurs in China blog is in the midst of a very worthwhile three part series, entitled, “A China Joint Venture Survival Guide. 22 Facts and 22 Practical Tips.” The series is now at tips 9 through 15 and I like all of them. Not only are they good tips for those contemplating doing… Continue Reading
The Most Common China Law Issues.
Posted in Basics of China Business Law, China Business, Legal NewsClients, potential clients and the press are always asking me what foreign companies that do business in China need to know to stay out of legal trouble. Next time I get such a question, I will refer them to the list below as it sets out the most common legal issues foreign companies face when… 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
China Joint Ventures. Who’s Your Partner?
Posted in Legal NewsBy Steve Dickinson The Chinese Supreme Court recently issued a set of regulations to be used in court cases involving disputes within foreign invested enterprises (最高人民法院关于审理外商投资企业纠纷案件若干问题的规定). These regulations came into effect on August 16, 2010. The official Chinese version can be found on the Supreme Court website here. Though the Regulations are technically concerned with… Continue Reading
The China Joint Venture. It’s BACK!!!
Posted in Legal NewsAmCham China just posted an interview here [mp3] of me regarding the return of joint ventures to China. Josh Gartner conducted the interview and he did a great job. Though joint ventures obviously never left China, there has definitely been a post-recession resurgence. Whereas in the past, most American companies that did joint ventures in… Continue Reading
Your Chinese-American VP Don’t Know Diddley ‘Bout China Law And I Have Friggin Had It.
Posted in Legal NewsBefore my law firm hires anyone, we make sure they do not have a problem with swearing. Because I do. I know I shouldn’t, but darn, certain swear words are absolutely critical for communication. But when I started this blog, I swore (pun intended) I would strive never to write anything I would not want… Continue Reading
Beware The China Joint Venture
Posted in Legal NewsRegular readers of this blog know I am not a big fan of Chinese joint ventures. Though they are sometimes required under Chinese law for entry into China and they are also sometimes a near necessity for business reasons, they should generally be avoided if possible. Some incidents over the last few months have really… Continue Reading
When In China Trust Everyone
Posted in Legal NewsEarlier this year, I got a call from someone who wanted “a little help” with their Chinese joint venture (JV). Seems this normally sane American company entered into a joint venture with a Chinese company they knew they could trust because some other company they knew had conducted successful business with them. So the American… Continue Reading
Guaranteed China Savings — With Fine Print And Caveats
Posted in China BusinessThe All Roads Lead to China Blog did an excellent post the other day, entitled, “Save Money in China GUARANTEED!“ Though I wholeheartedly concur with the advice, I must, as a China lawyer add some fine print. All Roads sets forth a nine fold path for guaranteed cost savings in China outsourcing, of which I… Continue Reading
China — Damn The Joint Venture
Posted in Legal NewsChina Business Services Blog just did a short post on joint ventures (JV), entitled, “Don’t Quote Me (on Joint Ventures).” Regular readers know we are generally not fans of joint ventures. Yes, they are sometimes necessary for doing business in China, but when they are not, they are usually to be avoided. What you can… Continue Reading
China’s Middle Class Now Shopping For Western Brand Clothes
Posted in China BusinessMany clothing companies that have for years been producing clothes in China for export elsewhere, are now realizing there is money to be made by selling their clothes in China as well. As I noted in a previous post, entitled, “China’s Middle Class Rising And Is Not To Be Ignored,” China’s middle class is rising… Continue Reading
Chinese Company Formation — Forming A Wholly Foreign Owned Entity (WFOE) In China
Posted in Basics of China Business Law, Legal NewsBy: Steve Dickinson This post focuses on how to form a Wholly Foreign Owned Entity (WFOE) in China. I am starting with this type of entity because it is the one we do most often. Subsequent posts will detail the steps required to register other forms of entities in China, such as a representative office… Continue Reading
Doing Everything Right in China — A Danfoss Primer
Posted in China BusinessThis article from McKinsey Quarterly details the China operations of Danfoss, a Danish manufacturer of mechanical and electrical products and controls. Danfoss appears to have done just about everything right in its China business and their tactics there are quite instructive. I am particularly impressed by Danfoss’s doing the following: Going into China as a… Continue Reading
China WFOE v. JV
Posted in Legal NewsOne of my best friends from childhood, who is now a senior executive at Miniature Precision Components, Inc (an auto parts supplier) sent me an Automotive News article today, entitled China’s Easy-Money Era is Over. This article details the advice given by the Executive Director of Magna International’s China operations, Keith Lomason, during his speech… Continue Reading
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