Doing business in China: Special rules on setting up trading companies in China

Abstract

In general, an overseas company may set up a company in China as a wholly foreign-owned enterprise, an equity joint venture, or a contractual joint venture. The three basic statutes on foreign-invested enterprises, namely, the Law on Wholly Foreign-invested Enterprises 1986, the Law on Sino-Foreign Equity Joint Ventures 1979, and the Sino-Foreign Contractual Joint Ventures Law (1988), provide for the general requirements and set-up procedures. However, if the company is to be set up for trading (rather than processing or manufacturing) activities, its setting up must also comply with some special rules.