The Chinese economy is considered by many to be the ultimate investment opportunity. Not only does it offer a market of up to 1300 million possible consumers, it also brings about annual growth rates that most countries would not even dare dreaming of.
This website concentrates on the move to set up a Buying Office in China. Here is a brief overview of the Three Main forms (arranged in the order of simplicity) that a business can establish a buying office in China to better control factories and their supply chains.
- Partnership (also known as Contractual Joint Venture), enables the parties involved to operate as separate legal entities and bear liabilities independently rather than as a single entity. A cooperative venture may also be registered as a limited liability entity resembling an equity joint venture in operation, structure, and status as a Chinese legal entity.
- Representative Office (RO) : a RO is not a separate legal entity but is considered to be part of its parent company. ODM has a RO in Zhuhai to monitor our factories in China. A Rep. office is not allowed to sell or invoice clients - this must be done by the HQ of this company.
- A Wholly Foreign-Owned Enterprise (WFOE), also known as Wholly Owned Foreign Enterprise, is a limited liability company established within the territory of China through foreign investment only. WFOEs are becoming increasingly more popular, mainly because of the fact that there is no involvement of any Chinese investor thus giving the foreign company complete control over the newly established business. A WFOE is an interesting option for companies looking to set up a completely new factory, but most buying offices even some for major retailers with a headcount of over 100 people will choose the simplified Rep office system.