RO vs. FICE: Determining Which Structure is Right for You
Published: April 2010In this issue of China Briefing we take a look at the difference between the representative office and the foreign-invested commercial enterprise.
No. of Pages: 12 pages
In this issue:
- ROs and FICEs compared
- RO tax obligations and deemed profit rates
- Establishing FICEs in China
- Regional Updates: Arbitration Rule Changes in Beijing and Shanghai's Hongqiao Business District
In this issue of China Briefing we take a look at the difference between the representative office and the foreign-invested commercial enterprise. The representative office has long been the vehicle that foreign investors have used to get their feet wet in China, acting as a bridge to a company in the home country. But with China increasingly regulating representative offices, it may now be time to turn to the foreign-invested commercial enterprise as a viable alternative, especially if the ultimate goal of investing in China involves trade. We explore the legal and tax issues at hand with ROs and FICEs, look at the recently released tax regulations for representative offices and examine the three steps to a FICE application.
We also take a look at some regional issues, investigating new arbitration rules that could affect foreign investors and exploring the new Hongqiao business zone in Shanghai, a commercial and transportation hub that aims to rival Pudong in the coming years.