Establishing A Business Presence chinese writing class Invest In ChinaAuthor : ginfo plusSubmitted Word Count Popularity Tags: Internet Marketing, Joint venture, website promotions, online business, marketing Author RSS FeedThree primary investment forms are commonly used by foreign companies to establish a permanent presence in China the Sinoforeign Joint Venture, the Wholly Foreign Owned Enterprise, and the Representative Office. SinoForeign Joint Ventures This investment form requires the foreign company to team up with a Chinese partner. As Chinese companies are typically short chinese writing classon moneyparticularly hard currency, the foreign partner usually provides the bulk of the funding while the Chinese partner supplies land use rights, deals with the Chinese bureaucracy, and helps recruit employees for the venture. Sinoforeign Joint Ventures can be divided into two types 1Equity Joint Ventures, and2Cooperative Joint Venturesalso known as Contractual Joint Ventures. In an Equity Joint Venture, the parties are obligated to divide their respective contributions to the joint venturewhether in cash or in kindinto discrete ratios, which ratios must be strictly adhered to when apportioning profits both during the ventures operationchinese writing class and after liquidation. In a Cooperative Joint Venture the parties need not calculate a contribution ratio for each partner and thus may freely apportion profits according to the terms of a negotiated Joint Venture Agreement. Cooperative Joint Ventures are often used for BuildOperateTransferBOTprojects. Wholly Foreign Owned Enterprises Known affectionately among old China hchinese writing classands as the WFOEpronouncedwoofie, this investment form allows 100% foreign ownership. It is attractive to the increasing number of foreign investors who already have business experience in China and thus dont need to rely on a local partner to hold their hand as they make their way through the byzantine corridors of the local market. It is also popular among less experienced investors who want to avoid the hassles of dealing with a Chinese partner. Some industries are offlimits to 100% foreign ownershipthere are even a few sensitive industries in which participation by Sinoforeign joint ventures is prohibited, but WFOE regulations have recently been relaxed in compliance with Chinas WTO obligations certain restrictions have been eliminated concerning WFOE export volume and technological capabilities that once forced many investors to choose between either working with a Chinese partner or substantially modifying their business plans to conform to WFOE regulations. Representative Offices Although the establishment of a Representative OfficeROis by far the most popular first step for foreign companies seeking a presence in China, it is not an investment vehicle per se. Strictly speaking, it is not even a company. It is barred from carrying out direct business activities it may not receive fees for its services, and its staff may not even sign contractsalthough unfortunatelychinese writing class, under certain circumstances it can still be taxed by the Chinese authorities. It is normally used for purposes such as market research, product sourcing, and liaison. The RO is popular among foreign investors as a way of establishing a company presence in China, and as a preliminary step aimed at learning enough about the Chinese market to minimize reliance on local partners in future ventures. The main advantage of an RO is that it is relatively quick, easy, and inexpensive to establish. The foregoing investment forms are not the only options. Somechinese writing class companies prefer investment in or acquisition of existing Chinese companies, and various cooperative arrangements with Chinese companiessuch as compensatory trade, processing and assembling, etc.are gaining increasing acceptance because they can spare a wouldbe investor from the risks of establishing a Chinese company from scratch.Author’s Resource BoxFor more useful tips & hints, please browse for more information at our website:Article Source:www.1ArticleWorld.com . http://ci.ntu.edu.sg/eng/Programme/Pages/Detail.aspx?event=d15fa75b-c201-4169-a617-e98da490c73b