Commercial Law

Establishing Operations

The Corporate department in China acts on behalf of companies and corporations establishing operations in China. There are three different legal structures through which foreign companies can operate in China:

 

Representative Office (RO)
Serves as a representative of a foreign company in China without having its own legal personality. The scope of the RO’s activity is relatively limited and includes research and marketing, contact with suppliers and examination of investments. ROs are not entitled to issue tax invoices and therefore are prohibited from directly employing workers (employment is through agencies). Our China office has established ROs across China for several prominent companies, including in Beijing, Shanghai and Guangzhou.

 

Wholly Foreign Owned Enterprise (WFOE)
A limited liability company held entirely by foreign investors. WFOEs are local companies entitled to perform any legal activity in accordance with their business licenses. ZAG-S&W’s China office has extensive experience establishing WFOEs across China, including in the free trade areas, and we also advise foreign companies on obtaining necessary licenses to operate.

 

Joint Venture (JV)
A limited liability company held by both foreign and local investors. The managing organ of the JV is the board of directors that is comprised of at least 3 directors. ZAG-S&W’s China office has extensive experience in drafting, negotiating and acting on JV agreements, as well as establishing the JVs. Our China Desk has previously established JVs in the areas of biomed, internet, software, transportation, telecom, agriculture and more.

 
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