One of my favorite things is forming a China WFOE for foreign companies. I love them because it is the rare WFOE that does not also need real estate, employment law, and IP assistance to go with the new company. They often require additional work as well, such as contracts, environmental compliance, government approvals, etc. In other words, the forming of one WFOE is almost always the forming of a long term and fruitful legal relationship.
Every time China has a big event, (see the Olympic games for past proof), it starts tightening up on visas. Over the last few weeks, we are hearing more and more about foreigners getting stopped on the street or in their apartment lobby!
So why is this a good thing for my law firm? Because one of the best things about having your own China WFOE is the ability to secure a coveted employment visa, a/k/a the Z Visa. In the last month, we started WFOE applications for two companies who almost certainly would not have gone forward with the process had they not been at such great risk of having some of their people kept out of China over the next 6 to 10 months. Both companies are service companies that were hired by large American multinationals to provide the multinationals with services in China similar to what they provide in the United States. Both companies believe their China projects will last a little more than a year.
I talked with both about how their US employees could work in China for around 90 days and then leave the country and return, but I also told them that every time they leave the risk of China not letting them return increases. I also told them of how we keep hearing more and more about people getting shorter visas than they would have liked and of visa checks happening throughout China. In the end, the risk of not being able to service their good clients without interruption and their belief that gaining a toehold in China has benefits beyond the surefire visa led both companies to go forward with having our China corporate team form their China WFOEs.
Thank you China.
What are you seeing out there?