As a company we have been planning how we step things up in China for several years and your comments have had a major influence on our thinking. I do have a question. I have heard about a corporate structure that you never seem to mention. FICE, Foreign Investment Corporate Entity I believe does not allow for manufacturing but does allow for multiple sites, whereas WOFEs are I believe single site operations. Does it truly exist? Why is it never mentioned as an option? Appreciate the info.

A FICE is a WFOE that is authorized to engage in wholesale and/or retail trade. The approval requirements for these sorts of entities tend to be much stricter than for a manufacturing or service WFOE. Additionally, approval of a FICE usually must come at the provincial level, not the local level. There are some provinces that do not even accept applications for a FICE. Shanghai and Beijing have the authority to approve the establishment of a FICE and most FICE operations are formed in those two cities for that reason.

Foreign Invested Enterprises (FIEs) mostly consist of Wholly Foreign Owned Entities (WFOEs) and Joint Ventures (JVs). All Foreign Invested Enterprises must set out the nature of their business during the licensing phase of the entity registration process. There are all sorts of possible categories, including Regional Headquarters, Service, Purchasing Center, Research and Development Center, Investment/Holding Company, Service Company, Manufacturing Company and Foreign Invested Commercial Enterprise (FICE).

In the end though, a FICE is nothing more or less than a type of WFOE or JV. 

By Dan Harris
Source: ChinaLawBlog

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