China Foreign Invested Partnership Enterprise Registration (FIPE)
Hotline: 86-755-82143348, Email:amyhuang@citilinkia.com
China foreign invested partnership enterprise registration is one of the choices for business setup in China. Most foreign investors in China are familiar with the two main vehicles of investing in the country: the joint venture (JV) and the wholly foreign-owned enterprise (WFOE). While the third option - foreign invested partnership enterprise (FIPE) - is often overlooked. Literally speaking, this entity requires two or more investors to conduct business together.
FIPE becomes more and more popular among young entrepreneurs with their new startups in China as it requires no registered capital but can still hire people, collect payments, issue invoices, apply for work & residence in China freely.
Advantages of FIPEs
(1) Chinese individuals are allowed to participate directly as the individual investor, which is different from the Joint Venture (JV);
(2) No need to apply for the further approved by commercial authorities for establishment;
(3)No capital injection required and no minimum capital stipulated;
(4) The enterprise can keep a simple management mechanism structure, low management cost, higher decision-making efficiency;
(5) No Corporate Income Tax;
(6) It reduces the operating cost of the enterprise.
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Types of FIPEs
1. General Partnership:
The partners share unlimited joint and several liability for the debts and liabilities of the partnership.
2. Limited Liability Partnership
This is formed between general partners and limited partners whereby the limited partners’ liability is limited to the extent of their capital contribution.
3. Special General Partnership
For this type, the partners are protected from the debts or liabilities arising out of willful negligence of the other partners. Special General Partnerships are usually adopted by professional service providers such as lawyers, certified public accountants, and doctors. Other than this immunity, the entity resembles a general partnership.
Basic Conditions of a FIPE
A partnership enterprise must meet the following requirements:
(1) At least 2 or more partners.
(2) A written partnership agreement.
(3) Capital contribution subscribed to or actually paid by the partners.
(4) A business name and an office in an office building for the partnership enterprise.
How to Set Up a FIPE in China
The procedure for setting up a partnership is faster than that of the WFOE or JV, and allows a foreign business to become active in China without locking in too many resources. It does not require approval from the Ministry of Commerce. The minimum number of partners should be two. There's no requirements on the nationality of a partner, thus it can be all foreign investors to form a FIPE or foreign and Chinese partners mixed FIPE. Once a FIPE is officially registered, it's required to maintain proper accounting records in accordance with accounting standards in China and report taxes in monthly basis.
Contact Us
If you have further queries, don’t hesitate to contact ATAHK anytime, anywhere by simply visiting ATAHK’s website www.3737580.net, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143512 or 86-755-82143181 or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.