Foreign business which seeks to enter into China market may have various options to do so, and the following tips are a general description on the method to enter into China market.

Option 1：Sell the goods to China companies or customers

a. Directly selling the goods to Chinese companies. This usually applies to point to point transaction such as large equipment, bulk goods etc.

b. Find a Chinese partner and distribute the goods to consumers. For goods consumed by mess population, the foreign may find a local partner to distribute the goods to mess populations. The foreign supplier and the local distributor usually enter into a distribution agreement or agency agreement.

Option 2: Invest in China
a. Representative Office (Rep Office) usually conducts market survey, develop partners and business channels. It can not conduct business transaction under its own and all the business shall be referred to its parent company. In addition, a rep office can not directly employ local staff. The staff shall be employed through local authorized agent.

b. Wholly Foreign Owned Enterprise (WFOE) is a limited liability company fully invested by foreign investors. From a legal point, it is a Chinese legal entity and can conduct business transactions. 

c. Equity Joint Venture (EJV) is a company jointly invested by local and foreign investors. In some specially regulated industries which is not allowed for WOFE, EJV is the common choice for foreign investors.

d. Cooperative Joint Venture (CJV) is also an entity jointly invested by local and foreign company. However, unlike a EJV, the profit and risk shared by the investors is not according to the percentage of shares of each party in the JV, instead, it is usually decided by a agreement made at the beginning of the partnership.

For detailed advice, you may contact David Gao, Attorney at Law by Email: bjlawyer.gao@gmail.com