A WFOE is a 100% wholly foreign-owned enterprise subsidiary doing business in China. The foreign company has sole responsibility for its profits and Losses. It is required to register as a legal person who is restricted to certain businesses. The enterprise is able to implement strategies that effectively conform to the interests of the parent company aboard. Moreover, technology and know-how are given better protection.
When the foreign investor considering about establishing operations in China. RO is undoubtedly an easiest way to enter Chinese market with comparatively lower threshold. Because there is no required investment capital for establish RO. many foreign investors choose to set up representative offices (ROs) to engage in market research and to learn more about the country.
What do you need to check out before you decide to start up a business in Shanghai?
Check the industry is on encourage list of China Government according to the Catalogue for the Guidance of Foreign Investment Industries.