Services
Fortitude provides secure and comprehensive corporate services together with strategic business consultation, access to key decision makers, particularly guidance on tailor-made business structuring in terms of an appropriate business modal, investment project operations, corporate solutions, including:
CHINA CORPORATE SERVICES
Why invest in China?
Since 1978, when the Chinese government decided to amend its economic policies and move towards a more market-orientated system, the national GDP has quadrupled. China’s GDP is now ranked as fourth globally and is showing now signs of weakening. Considering the innumerous business and investment opportunities that China has to offer in comparison to other developing nations and a further relaxation of business and registration regulations, it is no surprise that more and more foreign investors are confidently setting up their businesses here. China has been determinedly improving itself to match the expectations of the world market. As a result, China’s reputation is certainly being viewed in a more positive light.
Although China provides great opportunities for businesses wishing to export goods, it is becoming more evident that the domestic market offers huge potential for foreign investors also. The media, consultancy, retail and franchising industries in particular are finding that doing business in China is indeed profitable.
Where in China?
Once the decision has been made to set up your business in China a further decision needs to be made with regards to where in China you wish to be located. One of the most popular choices for foreign companies to position themselves is of course Shanghai. In particular, the service industries, such as banking and international finance, as well as consultancy, logistics and trading find their needs are more than catered for.
Shanghai is also very attractive to the manufacturing industry, although this is primarily due to its suitability as a central base. The increasing cost of land in and around this setting is encouraging more factories to move further a field. Other popular locations for the manufacturing and trading industries within China include the Zhejiang, Jiangsu, Guangdong and Sichuan provinces to name but a few.
How to set up in China?
Although the prospect of setting-up or investing in a business in China can seem very challenging to most foreigners, in the right hands the process can be carried out with the minimum of negative interference and delay.
There are three ways for foreign investors to legally register their business in China:
Wholly Foreign-Owned Enterprise (WFOE)
For some foreign investors, domestic collaboration in order to form a JV is either not feasible or not appropriate for their needs. Simply not being able to find a suitable partner or not wishing to divulge business strategies may be cause enough for another form of enterprise to be sought.
A WFOE is a business entity with a total foreign capital and total foreign control; there is no formal Chinese ownership participation. In order for a foreign company to be able to export goods from China and issue invoices, it must legally register itself as a local company, which is how the WFOE serves its purpose. It is a limited liability entity with a taxation system that is governed by the local authorities. Many foreign investors find this type of company attractive because of the full control and 100% ownership.
Joint Venture (JV)
The Joint Venture business arrangement allows foreign investors to collaborate with local partners to create an official contractual relationship. This allows the foreign investor to share operation costs, management responsibility as well as profits and losses.
The Chinese government has been encouraging this form of foreign investment primarily as a means to gain exposure to advanced technologies and new management skills. In return, foreign investors can enjoy low labor costs, low production costs and a potentially large Chinese market share. For certain industries, JVs are sometimes the only way to register in China, as certain forms of business activity are still controlled by the government, e.g. insurances, education provision and hospitality services etc.
Representative Office (RO)
The formation of a Representative Office is the most simple and cost-effective method of establishing a business presence in China. Typically, the most convenient location for ROs in China would be Shanghai, Beijing, Guangzhou due to the high level of business activity to be found there. Please note that more than one RO can be established in China at any one time.
The RO is quite different to the WFOE and JV in that it is not directly involved in the formation of profits for the parent company. As the RO is not recognized as a legal entity, it is not allowed to operate as a partnership or sole proprietorships in China. It is encouraged, however, that they indirectly participate in ‘operational activities’ such as promotion of products and a technological exchange from its parent company. In other words, the activities should be viewed as preparatory and supplementary activities. Many multinational groups moved their Asia pacific headquarters from Singapore and Hong Kong to Shanghai.
WFOE/JV Categories It is worth noting that the Chinese Government does have a preference with regards to certain industries wishing to invest in the country. The principle ones are as follows, among others:
• High-technologies
• Environmental protection
• Manufacturing
• Trading
• Retail
• Logistics
• Franchising
• Consulting (business, technology etc.)
In addition, Fortitude is able to assist Chinese companies to establish business enterprises in Europe and the U.S. especially to list on the NYSE and The London Stock Exchange.
OFFSHORE CORPORATE SERVICES
Consultation on offshore investment and operations, including:
• Tailor-made business structuring
• Tax planning
• Selecting a jurisdiction
• Offshore company formation in major financial centers
Relative Supporting Services, including:
• Opening of bank accounts
• Virtual office services
• Assistance in accounting and bookkeeping
• L/C handling
• Processing patent and trademark applications in the U.S., the U.K. and France
BUSINESS MEDIATION
Fortitude is in a very strong position and experiences to help its overseas clients in handling business disputes in order to avoid, or minimize any loss, or overcome difficulties.
