China Legal Guides · Entity decision

Representative Office vs WFOE in China

The operating fork is simple: if the China presence must sell, invoice or directly employ, the discussion is usually a WFOE in an open sector—not a representative office with an expanded description.

Decision guide

Operational orientation · Qualified PRC counsel required for fact-specific decisions

Open the workflow Open escalation

Decision principle

Choose the vehicle by the activity it must lawfully perform.

A representative office supports liaison and limited non-operational activity. A WFOE is a China company that can contract, invoice and employ within its permitted scope. There is no conversion button: a business outgrowing an RO forms the company and closes the office.

Two-way operating fork

Test the China presence against two legal jobs.

If a JV, VIE or restricted-sector structure is actually in issue, return to the four-way entity decision page.

Time on site

An RO is not a China legal person that trades. It generally does not issue operating invoices or employ PRC staff as a company would; local staff commonly sit through a qualified dispatch arrangement.

Activity line

Do not use an RO to collect customer money or disguise operating revenue as a headquarters service fee. If the business must trade, revisit market access and form the appropriate operating vehicle.

Before choosing

Complete the operating test.

Selections remain in this browser.

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Invoice need

Record whether China customers require local contracts and invoices.

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Hiring need

Confirm direct employment versus dispatch.

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Access checked

Review the current negative list and sector licences.

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Full cost compared

Include dispatch, premises, tax, formation and closure.

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Transition owned

If an RO exists, assign company formation and RO closure owners.

Frequently asked questions

Common RO/WFOE questions.

The correct route depends on actual activity.

Can an RO be upgraded into a WFOE?

No. The business incorporates a company and separately deregisters the representative office; people, lease, banking and other arrangements must be migrated.

Is an RO always cheaper?

Not necessarily. Liaison can be less complex, but dispatch, premises, filings and the inability to invoice can make it unsuitable or uneconomic for an operating business.

Source station

Use current foreign-investment, company and representative-office rules.

Ministry of Commerce Entity-choice decision Company formation guide First-hire roadmap

Entity library

Continue into the selected route.

The operating choice opens distinct formation and people workstreams.

01 · Four-way route

Entity escalation

Escalate before the vehicle is used beyond its permitted function.

Market access, operating scope and an existing RO transition require current advice.

Revenue activity is plannedContracts, invoicing or sales exceed liaison.

The sector is restrictedForeign participation or licences may rewrite the structure.

An RO already operatesPeople, lease, records and deregistration need a transition plan.

Browse formation counselCompare relevant profiles.

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Prepare an entity enquirySummarise sector, revenue, hiring and existing presence.

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Educational information only — not legal advice. Laws, procedure and enforcement practice can change; obtain current fact-specific advice.