China FICE:
Advantages VS dis-advantages

This China FICE Advantages page was last updated on May 16, 2012

Advantages and dis-advantages of a China FICE

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Advantages of a China FICE

Advantages of establishing a FICE, compared with other types of enterprises

FICE or WFOE or both and what makes FICE stand out from the rest?

A general FICE advantage highlight

FICE are among the most popular corporate models for non-PRC investors due to their considerable versatility and unique advantage of being allowed to sell product in China. Amid such unique advantage, there are but also some points that are less favorable or more of a dis-advantage.

Let’s take a closer logo at both to find out whether or not the advantages can outweigh the disadvantages and thus, the FICE being the right business model for your business venture into China.

Most likely less beloved, the disadvantages first:

Some of the main FICE dis-advantages

  • Similar to a common WFOE, the FICE, too, requires a minimum 20% of the paid up capital injected into a corporate bank account within the first month of incorporation.
  • The minimum registered capital required for trading rights is still at a RMB 1 million.
  • A manufacturing FICE require the consultation and approval by many official Chinese departments, which in turn means - more time.
  • Wholesale China FICE must obtain approval from both the Ministry of Commerce, as well as the authorities in the province in which the FICE is to be set up.
  • The bureaucratic red tape digs out numerous challenges, filling the FICE registration with piles of paperwork.

Highlights of FICE Advantages

Unlike a China WFOE, a China FICE can open and operate branch offices anywhere within China.

Though a China FICE allows trading in Mainland China, the FICE can be 100% foreign owned.

China FICE formation allows the company to carry out a wide range of activities, including wholesale, retail and franchising trade activities in China.

This is thanks to the updated policy of trading and distribution rights made in 2004, as these sectors were previously closed or restricted for foreign companies.

Previous regulations which required an annual average turnover of at least US$2.5 million in the three years prior to an application and a minimum asset value of USD $300 million in the year prior to the application were amended to allow for easier setup of a FICE.

Investors planning to further their business scope in China can upgrade their current business model to a China FICE.

More Advantages to spice up the Foreign Invested Commercial Enterprise

Following we quoted some facts which certainly highlight:

Low labour costs coupled with immeasurable business opportunities in China are certainly another key advantage and thus continue to attract numerous overseas investors.

Furthermore, the Chinese Government is determined to work on and implement additional preferential investment polices to keep China on a high interest level for foreign investors.

The formation of a FICE will not only enable investors to sell product within China, but also increase control of marketing strategy and response speeds. It also provides greater security for the stakeholders to protect their scientific research confidentiality, maintain control of their intellectual property rights, and maintain global corporate strategy.

To sum-up on the FICE Advantages.

  • A FICE, or Foreign Invested Commercial Enterprise is the perfect and best means of creating a solid sales platform from which to sell directly to the China Mainland consumers. It allows your marketing team to focus on commodity wholesale, retail directly to the Chinese consumer, or even develop and operate your own franchise.
  • Contact Chinabiz21, we will be glad to assist you in every aspect of establishing your very own FICE in China

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