WFOE vs Representative Office in China
Which structure fits your activity, invoicing and hiring needs.
WFOE: a real operating company
A WFOE can conduct for-profit business: sign contracts, issue official invoices (fapiao), hire employees directly, import and export, and repatriate profits to shareholders after tax. It is the default choice for anyone selling, servicing or manufacturing in China.
Representative office: a liaison presence
A representative office (RO) may conduct market research, liaison and promotion on behalf of its parent. It cannot sign sales contracts or earn revenue in China, and staff are engaged through a labour dispatch agency. It is faster and cheaper to open, but its scope is narrow.
Quick comparison
- 100% foreign ownership: both allow it
- Earn revenue and invoice customers: WFOE yes, RO no
- Hire employees directly: WFOE yes, RO via dispatch
- Import/export rights: WFOE yes, RO no
- Setup speed and cost: RO faster and lower
Which should you choose?
If you plan to sell, invoice or hire in China, register a WFOE. If you only need a local presence to research the market and coordinate with suppliers, an RO is a legitimate low-cost start — and many companies convert to a WFOE once revenue begins.
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