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Company formation

WFOE or representative office: which do you need?

Choose a WFOE if you want to earn revenue in China, invoice customers, hire directly or hold IP. A representative office can only do liaison and market research, can't invoice and still pays tax, so most companies that expect to sell in China within a year go straight to a WFOE.

Side by side

WFOE Representative office
Earn revenue and invoice Yes No
Hire staff directly Yes Through an agency
Legal status Chinese company Extension of the foreign company
Tax On actual profits Usually on a deemed basis from costs
Setup 8–14 weeks 6–10 weeks

Our usual advice

If you’ll sell in China within the next year or so, set up a WFOE now. Converting a representative office later means closing it and starting again.

Reviewed by Admin, Choi & Partners · 3 October 2026. This page is general information, not legal advice.
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