• Representative office. Setting up a representative office is inexpensive and quick. However, a representative office is not itself a company and is not permitted to directly engage in business activities. As the name implies, the office is set up to represent foreign companies in the PRC.
• Wholly foreign-owned enterprise. A limited liability company with 100 percent foreign ownership is one of the more popular FIEs because it allows the foreign investor to retain full ownership of, and total control over, its PRC entity.
• Joint venture. An entity with both foreign and Chinese investors, this type of enterprise can take the form of an equity joint venture, a limited liability company with both foreign and Chinese ownership, or a cooperative joint venture, which can take the form of either a limited liability company or exist as an unincorporated venture. Although these options usually are preferred by investors who want a local partner who knows the market well, negotiations can be fraught with difficulties and differences in business cultures can become an issue.
• Foreign investment company limited by shares. This type of enterprise is a share-issuing company limited in which both foreign and Chinese shareholders will own the shares, with at least 25 percent of the shares held by foreign shareholders. However, negotiations and approvals can take some time and effort.
• Patents, trademarks and copyrights. The PRC government has implemented various pieces of legislation to improve the registration and protection of patents, trademarks, and copyrights. Foreign investors should consult with an attorney and take steps to register such patents, trademarks, and copyrights in the PRC as appropriate. While registration of a copyright is not a precondition to enforcement, it might be helpful as evidence of ownership in enforcement status and will assist in determining the compensation awarded in the event of infringement.
• Software protection. Specific rules in the PRC protect computer software copyright, and software can be registered with the National Copyright Administration to provide prima facie evidence of ownership. Note that local software requires registration prior to enforcement, but foreign software copyrights can be enforced without registration.
• prohibited, which cannot be imported or exported;
• restricted, transfer of which is subject to approval (with different approval processes for technology import and export contracts); and
• freely tradeable, which only requires filing and registration.