Establishment and Operation of a Service Limited Company in China
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Welcome to ChinaInvest.biz Magazine - August 2010 Issue

ChinaInvest.biz Media is a division of Klako Group and will be providing monthly insight into investment, tax and operational issues for foreign companies entering and operating in China.

With the issuance of the new regulations by the Administrative Bureau for Industry and Commerce for Representative Offices, in this issue we aim to outline an alternative and perhaps in the long-term more advantageous solution to operating in China under a legal umbrella. It is important to provide companies looking for the most effective solution to enter the market with the necessary establishment and operational details. In addition Representative Offices already established in China, who are looking to find other options, should be aware that establishing a Limited Company is a viable decision to operate more successfully in China.

We hope this information can be an informative tool for all companies looking to establish or are already operating Limited Service Companies in China.

 


Establishment and Operation of a Service Limited Company in China

By Klaus Koehler, Managing Director, Klako Group

The chill from the world financial crisis has begun to take its toll on China’s own still robust growth, with the worst damage seen in export-oriented industries most vulnerable to decreasing demand overseas. However, one area in which China is thriving in, is the new attraction of tertiary-oriented industries, such as consulting companies and design companies, for example, that are looking to come to the tier-one cities of Beijing, Shanghai, Shenzhen and Guangzhou to establish their presence. Many companies have the strategy to come straight in, attacking the market and establishing a Limited Liability Company wholly-owned by the foreign investor (short-form = WFOE).

A Wholly Foreign Owned Enterprise (WFOE) is a limited liability company wholly owned by the foreign investor(s). WFOEs allow foreign investors to deliver services in China, without joining together with a Chinese partner. Limited liability is recognized by the amount of registered capital injected into the business. Although this may in fact be a combination of two assets, cash and equipment, the total value of these also represents the extent of the WFOE’s liability. For service companies it will generally only be in the form of cash, which will then be used to pay for any type of software or other form of equipment needed.

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All information in this report is verified to the best of our ability and is assumed to be correct at time of release; however, Klako Group does not accept responsibility for any losses arising from reliance on the information provided within.


Interview with Mr. Gred MacCormack, Vice President of Intricate Metal forming (Huizhou) Company Limited

About Intricate Metal Forming:

 

Established in 1988, Intricate Metal Forming Company (IMF) started as a specialized stamper providing milled

end contact pins (Radius, burr free tips) to automotive suppliers like Delphi Packard and similar customers.

Over the past two decades IMF has accumulated experience supplying a diverse array of connectors and

contacts to some of the most notable connector companies in the industry.

In 2006, Intricate Metal Forming Company became an International Manufacturer by ‘Starting Up’ a manufacturing

facility in Guangdong Province, China named Intricate Metal Forming (Huizhou) Company Limited.

 


What Can IMF Offer:

A place IMF’s customers can explore their most progressive concepts and requirements. With IMF’s 3D CAD

modeling and well-appointed tool room, they can design and build a tool capable to produce the client’s most

demanding part. Additionally, with their high speed Bruderer presses, they can run the client’s production

requirements from millions to billions (manufactured either in the US or China), and since they are TS 16949

and ISO 9001:2000 certified the client can be assured that their parts will meet their quality, delivery, and

pricing demands.


For many years now, IMF’s components have been installed into products sold by World-Renowned Organizations:

Ford, GM, Motorola, Cisco Systems, Northern Telecom, Lucent Technologies and many others...

About Intricate Metal Forming:
Established in 1988, Intricate Metal Forming Company (IMF) started as a specialized stamper providing milled
end contact pins (Radius, burr free tips) to automotive suppliers like Delphi Packard and similar customers.
Over the past two decades IMF has accumulated experience supplying a diverse array of connectors and
contacts to some of the most notable connector companies in the industry.
In 2006, Intricate Metal Forming Company became an International Manufacturer by ‘Starting Up’ a manufacturing
facility in Guangdong Province, China named Intricate Metal Forming (Huizhou) Company Limited.
What Can IMF Offer:
A place IMF’s customers can explore their most progressive concepts and requirements. With IMF’s 3D CAD
modeling and well-appointed tool room, they can design and build a tool capable to produce the client’s most
demanding part. Additionally, with their high speed Bruderer presses, they can run the client’s production
requirements from millions to billions (manufactured either in the US or China), and since they are TS 16949
and ISO 9001:2000 certified the client can be assured that their parts will meet their quality, delivery, and
pricing demands.
For many years now, IMF’s components have been installed into products sold by World-Renowned Organizations:
Ford, GM, Motorola, Cisco Systems, Northern Telecom, Lucent Technologies and many others..
To read full article, please click here to view magazine (PDF file)