A limited liability company may set up a board of supervisors, which shall comprise at least 3 persons. A limited liability company, which has relatively less shareholders or is relatively small in scale, may have 1 or 2 supervisors, and does not have to establish a board of supervisors. The supervisor is also appointed by the investor.

Under China’s Company Law and Administration of Registration of the Scope of Business of Enterprises Provisions, a company’s business scope shall be specified in its Articles of Association and be registered with the registry office in accordance with the law. Unlike other countries, a company registered in China can only engage in operation within its business scope.

As China’s strength in the global economy continues to grow, businesses need to consider the prospect of establishing operations within its borders. This article provides general information on establishing a Foreign Invested Enterprise (subsidiary) by foreign investors, to help provide guidance and demystify the process.

To set up a Representative Office (hereinafter referred to as “RO”) in China used to be a common way for foreign investors that intend to enter into China. The main reason is that RO is easy to establish. However, China has imposed more registration restrictions and tougher tax rules on Representative Offices since 2010. The establishment and maintenance of representative offices have been restricted and discouraged.

WFOE is an independent legal entity registered with only foreign capital in China and under Chinese law. The managing director (if only one director is appointed) or Board of directors and legal representative are appointed by the foreign parent company. The WFOE abides by the Chinese company law and regulations like any other Chinese company.

To proceed the change of company name, you shall conduct a name availability search with the competent registry office first. An approval for the new company name shall be obtained before you apply for the change of company name with the competent registry office. Upon receipt of the approval for the new company name, you shall go through the following procedures:

On 1 January 2020, the Foreign Investment Law of the PRC came into effect and replaced the Law of the PRC on Chinese-Foreign Equity Joint Ventures, the Law of the PRC on Chinese-Foreign Contractual Joint Ventures and the Law of the PRC on Wholly Foreign Owned Enterprises. Since then, foreign invested enterprises in China are no longer divided into sino-foreign equity joint ventures, sino-foreign contractual joint ventures or wholly foreign owned enterprises