Questions

Every WFOE and joint venture has a legal representative: the individual named to the authorities as the company's official signatory. Banks treat the role as central — when your account is opened, the bank will want to meet the legal representative in person or by video. TODO(review): content.md does not set out what the legal representative is personally exposed to, or who should hold the role. This needs input from our Shanghai partner before publication; the absence of detail here should not be read as meaning there is no personal exposure.

A chop (印章, yìnzhāng) binds the company in China more firmly than a signature does: whoever holds the company chop can sign contracts in the company's name, so custody is a control question, not an admin one. Four chops are in ordinary use: the company chop (公章), usually held by the general manager under a written chop policy; the financial chop (财务章), held by the finance manager or accountant; the legal representative chop (法人章), held by the legal representative or head office; and the invoice chop (发票专用章), held by finance. Bank payments need the financial chop and the legal representative chop together, which is why those two are kept by different people. Keep a log of every use. We will not hold your chops for you; we will help you write the policy that says who does. TODO(review): content.md does not cover what to do if a chop is lost or used without authority; confirm the recovery procedure with the Shanghai partner.

A representative office (RO, 代表处) has no separate legal personality, so the parent company is liable for it. It cannot invoice customers in China, sign sales contracts there or employ staff directly — staff are hired through a licensed agency — and it needs no registered capital. It is taxed on its costs at a deemed profit margin, whether or not it earns anything. A WFOE (外商独资企业) is a limited liability company wholly owned by the foreign investor. It can invoice, issue fapiao, hire directly, and import and export within its business scope. Registered capital is set by the investor, and under the 2024 Company Law subscribed capital must be paid in within five years of incorporation. Standard corporate income tax is 25%. In short: an RO suits testing the market or keeping a liaison presence; a WFOE suits selling, hiring and operating independently. An RO typically takes 6–10 weeks to open, indicative; a WFOE typically takes 8–12 weeks for service or consulting work.

Most sectors are open to a wholly foreign-owned enterprise, but the 2024 foreign investment negative list (29 items) sets out where a joint venture or Chinese control is required. Examples: medical institutions require a joint venture; pre-school, general high school and higher education need Sino-foreign cooperation, Chinese-led (compulsory education is prohibited outright); value-added telecoms are capped at 50% foreign ownership, with e-commerce and other exceptions and 100% pilots in Beijing, Shanghai, Hainan and Shenzhen; market research needs a joint venture, and radio and TV audience research must be Chinese-controlled; nuclear power, domestic water transport, public air transport, civil airports and basic telecoms are Chinese-controlled. A further group of sectors — including news, publishing, broadcasting, film production, rare earth mining, tobacco wholesale, postal services, GM seeds and social surveys — is prohibited to foreign investors outright. Manufacturing has no restrictions left in the 2024 list. Outside these sectors, a joint venture is optional, not required. TODO(review): confirm this is still the current negative list edition before publication.

For a WFOE, registered capital is a figure you set yourself when you incorporate. Under the 2024 Company Law, the capital you subscribe must be paid in within five years of incorporation — a legal limit, not a target you can quietly miss. A representative office needs no registered capital at all, since it has no separate legal personality. For a joint venture, the capital amount is agreed with the Chinese partner, and it must also be paid in within five years.

content.md does not currently describe how a company is closed in mainland China. design/blueprint.md refers to a simplified route and a general route, but content.md gives no detail on either: not the eligibility criteria, the sequence of tax and market-regulator deregistration, or how long it typically takes. TODO(review): this answer needs drafting from scratch with the Shanghai partner before publication; do not publish this page without it.

We own the relationship and the advice; the work in China — filings, registrations and day-to-day compliance — is carried out by our licensed partner firm in Shanghai. Your adviser is a senior, London-based, qualified lawyer with corporate work in London, Milan, Rome and Shanghai. Every message gets a considered reply within 48 hours, on working days in London — not an automated acknowledgement. We work in English, Italiano and 中文. No individual is named or pictured on the site; advice is given as we, from the Arvela team.