Until recently, only the largest foreign corporations fulfilled the criteria required to set up a foreign-invested venture in China to distribute goods and services in the growing Chinese market. However, the situation has changed with the introduction of the China FICE fromation (Foreign-Invested Commercial Enterprise), opening the potentially lucrative Chinese market to a much wider range of foreign investors. The following information will help you determine whether a China FICE formation is the optimum structure for your business.

Advantages of a China FICE Formation

A China FICE formation can be 100% foreign owned.

A China FICE formation can carry out a wide range of activities, including wholesale, retail and franchising trade activities in China. These sectors were once closed or restricted for foreign companies in the past.

Foreign investors planning on setting up a China FICE formation should note that there are no annual turnover or minimum asset requirements. Previous regulations required an annual average turnover of at least US$2.5 billion in the three years prior to the application and a minimum asset value of US$300 million in the year prior to the application.

Investors planning on setting up a China FICE formation should note that a China FICE formation is not permitted to carry out any manufacturing activities.

A wholesale China FICE formation must acquire approval from both the Ministry of Commerce in Beijing, as well as the authorities in the province in which it intends to set up.

A retail China FICE formation must acquire approval from provincial authorities to open a retail store in China.

Setting up a China FICE formation takes approximately 4 months.

A substantial initial capital is required with China company formation. A China WOFE and FICE must inject a minimum 20% of the paid up capital of RMB30,000 (US$4,175) into a corporate bank account prior to incorporation. The 80% balance is injected into the account in installments within two years of incorporation.