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> foreigners cannot own the majority of ANY company. This is incorrect, and has not been the case for a very long time, please don't spread FUD. Wholly Owned

> foreigners cannot own the majority of ANY company. This is incorrect, and has not been the case for a very long time, please don't spread FUD. Wholly Owned Foreign Enterprise https://en.wikipedia.org/wiki/Wholly_Foreign-Owned_Enterprise https://en.wikipedia.org/wiki/Wholly_Foreign-Owned_Enterpris...

hangonhn 7y ago
Except you left out the really important restriction that they cannot directly sell to domestic Chinese market. So they're still subject to import tariffs. In fact there's a whole industry of consultants who specializes in helping these companies "export and import" their goods back to China. I guess they may save on the shipping costs and employ cheaper Chinese labor. But the whole point of companies opening factories in China is to be able to sell to the huge Chinese consumer market without being hit by tariffs.
- zhte415 7y ago
  WFOEs can sell to Chinese businesses, consumers, government (and they can sell overseas, and overseas companies can sell to WFOEs or domestically). There's a lot of circularity in your comment. A company can be wholly foreign owned. A foreign owned company can sell in China, it can declare tax and issue receipts, employ people, rent office or factory space, build a building, the whole hog. I'm not sure where what niche you are in regarding import/export taxes, opening factories, and employing cheap labour all in one gulp of air. Wholly foreign owned companies in China are legal entities and have been for a long time, your comment "foreigners cannot own the majority of ANY company" is factually wrong and is FUD. Do you have an agenda with these comments? Please don't make HN political.
  - hangonhn 7y ago
    My comment wasn't as precise/nuanced as it should have been but was meant as an add-on of the parent's comment. What I meant is that the ownership restriction doesn't just apply to car companies but other industries as well -- although I do see now how that could have been read differently. WFOE cannot sell directly to Chinese consumers. The way WFOE sell to the Chinese domestic is essentially by "exporting" and "importing" its own products again, thus subject to taxes on such activities ( https://www.set-up-company.com/joint-venture-vs.-wfoe:-which-is-a-better-option-for-establishing-a-business-in-china.html https://www.set-up-company.com/joint-venture-vs.-wfoe:-which... -- "Scope of Business" Wish I could find a better source on this). A friend of mine interned at one of these firms that basically specializes in these creative "re-import" businesses but I don't know what these firms are called. Not sure why my comments generates such a reaction from you that you accuse me of FUD or being political. It's certainly not intended as such. I study Chinese history as a hobby, especially modern history. I have friends and family who do business in China (and own businesses in China). My comments were intended to add more information and background to the original comment by combining what I've read and what I've heard. But sometimes intentions and outcomes don't match up. Apologies if my comments injected too much of my own perspective on the subject.
    - zhte415 7y ago
      > WFOE cannot sell directly to Chinese consumers. Well, I can open up a sandwich shop. A foreign owned entity will indeed probably get scrutiny. A couple of friends have shops selling sandwiches (one toasted, one pizza type). They are WFOEs! I don't sell sandwiches. I mainly work in tech, finance and HR (generalist, I suppose). Some industries are controlled, even in another reply someone mentioned Tesla's plant is 100% owned. If waving fans, I have been in China (mainland) for two decades. What you type about ownership rules is utterly incorrect. You don't seem able to drop the ball. Edit: I'm going to drop the ball here and discontinue this. I wish you a good day.
NicoJuicy 7y ago
And you can't win government contracts with that, because they favor Chinese companies only ( so not published anywhere) And you aren't going to realistically sell anything, because Chinese companies always win. And after partnering, you can't easily get your money outside of China, that was why BTC was extremely popular there, untill it got regulated. Even for an individual, the limit is 50.000$/year for exchanging money. Give me an example of something that launched there that was not a luxury clothing good ( eg. D&G) Even something as steam needs a local partner to launch there. So the "wholly owned" thing is not a solution. It just "exists" for the sake of an argument. My parent company sells in the entire world except China because of that ( and some very small other countries). So I'm not exactly an outsider, it was my question to the "top guys", sort of speak :) It was also what I thought before I asked it. So yeah, it is a thing without a doubt.

hangonhn 7y ago

Except you left out the really important restriction that they cannot directly sell to domestic Chinese market. So they're still subject to import tariffs. In fact there's a whole industry of consultants who specializes in helping these companies "export and import" their goods back to China. I guess they may save on the shipping costs and employ cheaper Chinese labor. But the whole point of companies opening factories in China is to be able to sell to the huge Chinese consumer market without being hit by tariffs.

zhte415 7y ago
WFOEs can sell to Chinese businesses, consumers, government (and they can sell overseas, and overseas companies can sell to WFOEs or domestically). There's a lot of circularity in your comment. A company can be wholly foreign owned. A foreign owned company can sell in China, it can declare tax and issue receipts, employ people, rent office or factory space, build a building, the whole hog. I'm not sure where what niche you are in regarding import/export taxes, opening factories, and employing cheap labour all in one gulp of air. Wholly foreign owned companies in China are legal entities and have been for a long time, your comment "foreigners cannot own the majority of ANY company" is factually wrong and is FUD. Do you have an agenda with these comments? Please don't make HN political.
- hangonhn 7y ago
  My comment wasn't as precise/nuanced as it should have been but was meant as an add-on of the parent's comment. What I meant is that the ownership restriction doesn't just apply to car companies but other industries as well -- although I do see now how that could have been read differently. WFOE cannot sell directly to Chinese consumers. The way WFOE sell to the Chinese domestic is essentially by "exporting" and "importing" its own products again, thus subject to taxes on such activities ( https://www.set-up-company.com/joint-venture-vs.-wfoe:-which-is-a-better-option-for-establishing-a-business-in-china.html https://www.set-up-company.com/joint-venture-vs.-wfoe:-which... -- "Scope of Business" Wish I could find a better source on this). A friend of mine interned at one of these firms that basically specializes in these creative "re-import" businesses but I don't know what these firms are called. Not sure why my comments generates such a reaction from you that you accuse me of FUD or being political. It's certainly not intended as such. I study Chinese history as a hobby, especially modern history. I have friends and family who do business in China (and own businesses in China). My comments were intended to add more information and background to the original comment by combining what I've read and what I've heard. But sometimes intentions and outcomes don't match up. Apologies if my comments injected too much of my own perspective on the subject.
  - zhte415 7y ago
    > WFOE cannot sell directly to Chinese consumers. Well, I can open up a sandwich shop. A foreign owned entity will indeed probably get scrutiny. A couple of friends have shops selling sandwiches (one toasted, one pizza type). They are WFOEs! I don't sell sandwiches. I mainly work in tech, finance and HR (generalist, I suppose). Some industries are controlled, even in another reply someone mentioned Tesla's plant is 100% owned. If waving fans, I have been in China (mainland) for two decades. What you type about ownership rules is utterly incorrect. You don't seem able to drop the ball. Edit: I'm going to drop the ball here and discontinue this. I wish you a good day.

NicoJuicy 7y ago

And you can't win government contracts with that, because they favor Chinese companies only ( so not published anywhere) And you aren't going to realistically sell anything, because Chinese companies always win. And after partnering, you can't easily get your money outside of China, that was why BTC was extremely popular there, untill it got regulated. Even for an individual, the limit is 50.000$/year for exchanging money. Give me an example of something that launched there that was not a luxury clothing good ( eg. D&G) Even something as steam needs a local partner to launch there. So the "wholly owned" thing is not a solution. It just "exists" for the sake of an argument. My parent company sells in the entire world except China because of that ( and some very small other countries). So I'm not exactly an outsider, it was my question to the "top guys", sort of speak :) It was also what I thought before I asked it. So yeah, it is a thing without a doubt.