Part I: How to choose between a Representative Office, a Joint
Venture and a Wholly-owned Subsidiaries
In 2008 when the global financial crisis struck, European
companies put on hold most of their plans to develop the business
in China – preservation of cash was a greater priority. The
recent uncertainty in Europe and to a lesser extent in the United
States, however, is having the opposite effect. Many European and
American companies are starting to see China as a promising region
to expand, and are therefore devoting more resources to developing
their business in China.
This increased attention is leading to a lot of questions on how
to optimally structure an investment in China. Structuring has two
main components: ensuring that the right vehicle is used to carry
out the business in China, and building corporate governance that
enables the investor to control its investment. The first part of
this article will focus on investment structuring, while the
