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Foreign direct investment - structuring a legal presence in China

We can advise you at every stage of establishing and operating a business presence in the PRC. In many cases, setting up a legal presence in the PRC will be a foreign business's first experience of Chinese law and regulation, and we are experienced in guiding clients through this process - which is much more highly regulated than a similar process would be in the UK or other western countries.

We can assist you in identifying what structure will best suit your business in China, whether by franchise, distribution, agency, licence agreement, entering into a joint venture with a Chinese partner, establishing a Wholly Foreign Owned Enterprise (WFOE) or other hybrid method.

We typically counsel on the most appropriate strategic options available before preparing model structures and later handling the roll-out. These deals also frequently require in-depth knowledge of China's anti-trust legislation which we can provide, and we also regularly handle deals which have a large corporate restructuring element.

Below are examples of our experience setting up joint ventures and otherwise establishing a legal presence in China for our clients.

For more information on our experience relating to other models of trading in the PRC please see our capability on franchising or international trade.

Our experience includes:

  • represented a NASDAQ listed specialty chemicals manufacturer on the establishment of a wholly foreign-owned specialty chemicals facility in Wuxi and a wholly-owned trading entity in Waigaoqiao Free Trade Zone in Shanghai,
  • acting for a multinational software company on a landmark acquisition and restructuring of operations in China,
  • acting as counsel for a multinational energy company in China, assisting with the establishment of their PRC holding company, establishment and restructuring of a series of industrial gas joint venture facilities in Tianjin, Wuhan, Ma'anshan, Shanghai and Nanjing, establishment of several bonded zone companies, sale of business in central China, purchase of a private company in Beijing, general advisory on regulatory, labour and tax issues, and drafter of their standard gas sales and purchase contracts,
  • advising a large US industrial packaging company on a series of acquisitions and JVs in the PRC,
  • advising a Japanese chemical company in the formation of a joint venture in Hong Kong with a major US chemical company, and on the establishment of a servicing network in China by way of the establishment of representative offices in North, South and Central China out of their existing premises,
  • represented China's second largest automobile group in its US$2 billion joint venture with a major Japanese-French automobile company,
  • represented a consortium of European automotive-component manufacturers in the negotiation and establishment of an equity joint venture with a major Chinese automobile group in Shanghai,
  • advising a UK educational institute on a cooperative programme with a university in Shanghai, which has involved advising on the cooperation/joint venture agreement, budgets, capitalisation and funding issues, PRC compliance issues, and related agreements, and assisting the client in negotiations as well,
  • advising an education group on its operations in China, including establishment issues, and the PRC regulatory requirements for provision of educational consulting services,
  • advising a leading international food manufacturing company on their acquisition of a 40% stake in a major manufacturer of salad products in China and their subsequent acquisition of the remaining 60%,
  • advising, documenting and negotiating on behalf of a FTSE 100 company on the proposed establishment of a joint venture wet mill in Anhui producing starch with a listed Chinese company,
  • advising a UK process and information software company on 13 projects, including the acquisition of a 100% interest in a major battery manufacturing joint venture in Shenzhen worth £23m, the establishment of its PRC holding company, establishment of two major joint ventures each worth US$30m for the power drives division wholly incorporating the productive assets of the Chinese parties, the disposal of three foreign invested enterprises as part of a global sale of a division, and the restructuring of an equity joint venture into a cooperative joint venture,
  • assisting a Japanese industrial multinational's logistics division in its establishment of a majority-owned logistics joint venture in Shanghai,
  • advising an international airline on several joint venture projects in the logistics sector,
  • advising a UK shipping company on the negotiation and documentation of a proposed inland waterway joint venture in central China and a ship husbandry venture in Shanghai,
  • advising several Canadian, British and Australian mining companies in the establishment and restructuring of seven gold, zinc-lead, talc and diamond mining joint ventures in the PRC (and associated successful AIM flotation in London).

In China Eversheds LLP is a foreign law firm registered with the Ministry of Justice of the People's Republic of China. Under current Chinese regulations, we are allowed to provide information concerning the impact of the Chinese legal environment, but, like all international law firms with offices in the PRC, we are not authorized to issue opinions, determinations, or certifications in respect of, the application of PRC law. We work in cooperation with a number of Chinese law firms. Should you require a legal opinion in respect of any Chinese law matter, we would be happy to assist you in obtaining an opinion from a Chinese firm.

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