Market Entry

Are you planning to extend your business to China?

If you are based abroad and are in need of somebody who could function as the bridge between your company and the Chinese market, TCBC can help. From carrying out market research to corporate relations with potential clients or suppliers, TCBC might just be what you are looking for.

We has the right solution for you: we'll take care of your needs and we'll offer you all the knowledge and the assistance of our team to fulfill your requests.

When you start a partnership with TCBC, you will have the access to all the services listed below:

• Market-entry research and analysis
• Established connections with potential clients or suppliers
• Maintaining relations with clients or suppliers
• Setting up market distribution channels
• Promotion of products and services

Cooperating with TCBC will guarantee you privileged access to the Chinese market and professional assistance to help you satisfy all your needs..

Tommy China Business Consulting can assist you in identifying the business vehicle that is most suitable for you in order to accomplish your goals in China. The preferable option for you depends on your business sector, intended financial commitment, your overall company strategy and goals, your time-frame and other determinants.
Common investment vehicles for foreign investors are the establishment of a Wholly Foreign Owned Enterprise (WFOE), Joint Venture (JV), Representative Office (RO), Holding Company, Regional Headquarter or a R&D Center.

Wholly Foreign Owned Enterprise (WFOE)

Foreign investors who want to keep full management control, can opt for the establishment of a Wholly Foreign Owned Enterprise (WFOE). As the name suggests, a WFOE is fully funded by foreign capital. A WFOE is normally a limited liability entity, which can obtain import and export rights as well as distribution rights within China. The amount of minimum required registered capital depends on the location of the registered address, the company's industry sector (manufacturing, trading, service) and others. Different kinds of tax incentive policies apply to WFOEs depending on industry, geographic location and other factors. A WFOE is generally subject to Corporate Income Tax on quarterly basis as well as Business Tax and/or Value Added Tax on monthly basis.

Joint Venture (JV)

The term Joint Venture (JV) describes a business entity owned by two or more parties. The allocation of work and capital as well as the distribution of profits or losses in the concerned business project or enterprise is regulated either through shares in equity (Equity Joint Venture) or an agreement between the JV-partners (Contractual or Cooperative Joint Venture). The investment can be made in a variety of forms, including cash, buildings, machinery and other equipment, industrial property, and diverse types of intangible assets. The typical corporate form of a Joint Venture is a limited liability company (however, a Cooperative Joint Venture can also be a partnership without legal person status). Joint Ventures can be re-structured into WFOEs.

Representative Office (RO)

The establishment of a Representative Office is usually the first step for foreign investors. The RO does not have legal person status and can thus not enter into legal contracts. Most ROs are set up for market research activities, product introduction, quality control purposes or the provision of liaison services on behalf of the head office. In contrast to the establishment of a WFOE or JV, there is no minimum registered capital requirement for Representative Offices. Therefore, a RO can be set up with relatively little financial commitment. Although ROs do normally not generate income in China, this form of FIE is liable to Corporate Income Tax and Business Tax, to be paid on quarterly basis. Different kinds of tax payment methodologies are available for ROs, whereby the decision is made by the local tax authorities. Tax exemption is available subject to the tax authorities in charge upon fulfilment of certain requirements. ROs can not be re-structured into WFOEs.

Offshore Holding Company

In order to limit the risks of your China operations, optimize tax strategies or simply to provide for a straightforward way of changing the shareholder structure, the entities located in China could be grouped under an offshore holding company in Hong Kong, Macao or another jurisdiction.