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Shanghai Business Setup

Shanghai Company Setup

Shanghai Business Setup Service

Hotline: 86-21-68877368 Email: hkcfm-shanghai@163.com

Shanghai company incorporation includes four type of business entity setup: the joint venture (JV), the wholly foreign owned enterprise (WFOE), branch and representative, partnership.


Shanghai Company Incorporation-Joint Venture
A joint venture (JV) in Shanghai is a business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets. There are other types of companies such as JV limited by guarantee, joint ventures limited by guarantee with partners holding shares.

Advantages of Joint Venture (include, but not limited to)
1.The use of local partner’s existing workforce and facilities
2.Existing channels for sales and distribution
3.Use of a partner’s network to build good relationship; avoid red tape and other bureaucratic complexities
4.Entry into industrial sectors which exclude wholly foreign-owned investment

Shanghai Company Incorporation-Wholly Foreign Owned Enterprise
The registered capital of a Wholly Foreign Owned Enterprise (WFOE) should be subscribed and contributed solely by foreign investor(s). A WFOE does not include branches established in Shanghai by foreign enterprises and other foreign economic organizations.

Advantages of Wholly Foreign Owned Enterprise (include, but not limited to)
1.Independence and freedom to implement the worldwide strategies of its parent company without having to consider the involvement of the Chinese partner;
2.Ability to formally carry out business rather than just function as a representative office and being able to issue invoices to their customers in RMB and receive revenues in RMB;
3.Capability of converting RMB profits to US dollars for remittance to its parent company outside of China;
4.Protection of intellectual know-how and technology;
5.No requirement for Import / Export license for its own products;
6.Full control of human resources
7.Greater efficiency in operations, management and future development.

Shanghai Company Incorporation- Branch and Representative
Shanghai branch or representative are the limited business scope – it is generally forbidden from engaging in any profit-seeking activities, and can only legally engage in:
Market research, display and publicity activities that relate to company product or services;
Contact activities that relate to company product sales or service provision and domestic procurement and investment.
From 2010 on, companies that intend to register a RO must be at least two years old. The registration certificate for an RO is only valid for one year. Every year when an RO renews its license, a notarized and legalized incorporation certificate of the parent company will need to be provided. In addition to the incorporation certificate, a bank reference letter will also will need to be notarized and legalized.

Shanghai Company Incorporation-Partnership
Partnership is a type of business entity in which partners share with each other the profits or losses of the business undertaking in which all have invested, and partners shall pay tax on their respective share of the partnership income. And there are three types of partnership, General partnership, Limited partnership and Special general partnership
1.A general partnership may be formed by general partners who bear unlimited joint and several liabilities for the debts of the partnership. the general partners share unlimited liabilities for the debt of the partnership.
2.A limited partnership is formed by a combination of general partners and limited partners where the limited partners bear the liabilities for the partnership’s debts to the extent of their capital contributions.
3.A special general partnership resembles a general partnership except that it must be a professional service institution offering services requiring professional knowledge and special skills. The structure shields co-partners from liabilities due to the willful misconduct or gross negligence of one partner or a group of partners. It is intended as the preferred form of organization for law and accounting firms.

Advantages of Partnership (include, but not limited to)
1.No requirements on minimum registered capital;
2.Less procedures comparing with Wholly Foreign Owned Enterprise or Joint Venture
3.Capability of converting RMB profits to US dollars for remittance to its parent company outside of China;
4.Foreign Enterprise or Individual is allowed to establish a Partnership Enterprise with Chinese individual (While Chinese individual is not allowed to have Joint Venture company with foreign investor)
5.The profit distribution of a FIPE could follow an informal negotiated agreement or abide by scheme adopted in the partnership agreement (While for LLC, profit distributions is according the portage of investment of shareholders)

Contact Us
If you have further queries in Shanghai Company Incorporation, don’t hesitate to contact Tannet anytime, anywhere by simply visiting Tannet’s website www.tannet-group.net or www.companies-registry.net or emailing to tannet-solution@hotmail.com,or calling Hong Kong hotline at 852-27826888 or Shanghai hotline at 86-21-68877368   21-31397142   21-58822399, or emailing to hkcfm-shanghai@163.com.




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