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China market

WFOE, joint venture, rep office or distributor: which structure to start with

Most companies set up a structure too early, then pay to maintain it while nothing is happening. The right first structure is usually the smallest one that lets you learn.

France → China

A structure is a consequence of a commercial decision, not a substitute for one. Before comparing forms, answer this: who invoices the Chinese customer, and who holds the relationship?

The four options in plain terms

  • No entity. You export and a distributor imports. Fastest, cheapest, and the distributor owns the customer.
  • Representative office. A legal presence that cannot invoice. Useful for liaison and market work, limited by design.
  • WFOE. A wholly foreign-owned company. Full control, you can invoice and hire — and you carry real accounting, tax and reporting obligations from day one.
  • Joint venture. A local partner brings access; you share control and, eventually, disagreements. Sometimes mandatory by sector, rarely the right first move by choice.
StructureWhat it lets you doWho holds the customer
No entityExport; a distributor imports. Fastest and cheapest.The distributor
Representative officeLiaison and market work. Cannot invoice, by design.Whoever invoices
WFOEInvoice and hire, with full control — and accounting, tax and reporting obligations from day one.You
Joint ventureA local partner brings access; you share control and, eventually, disagreements.Shared

The recurring cost nobody mentions

Setting up a WFOE is a one-off project with a quotable price. Keeping it compliant — monthly filings, annual audit, a legal representative who carries personal responsibility — is an ongoing commitment. Companies that set one up « to be ready » often spend two years paying for readiness they never use.

A good rule: create the entity when an existing revenue stream requires it, not when a future one might. The paperwork is faster than the market.

Do I need a Chinese company to sell in China?

Not necessarily. You can sell through a distributor, or through cross-border e-commerce, without any local entity. An entity becomes necessary when you need to invoice locally, hire, or hold stock in China.

Is a joint venture still required in most sectors?

For most sectors it is not, and foreign ownership is permitted. Some sectors remain restricted, so it is worth verifying your specific category rather than relying on a general answer.

Keep reading on this.

China marketHong Kong or mainland China: where to bring your business inThey are not competing options. They do different jobs, and a lot of European companies end up using both — for reasons worth understanding before choosing.China marketWhat entering the Chinese market actually costs in the first yearNot a price list — nobody can give you one honestly. A map of where the money goes, so you can build your own number and spot the lines people forget.China marketThree light ways to test the Chinese market before committingThe choice is not between a full market entry and doing nothing. There is a middle, and it is where most of the useful learning happens.

If this raised a question about your own project, tell us where you are — the first conversation usually clarifies more than a proposal.

Talk about your China project →Read the full guide