I have to admit one of my favorite things is forming a China WFOE for foreign companies. I love them because co-blogger Steve Dickinson and our Chinese affiliated lawyers do all the work. I also love them because it is the rare WFOE that does not also need real estate, labor 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.
Which is why I have to admit to loving China's 60th Birthday celebrations and Shanghai's upcoming Expo.
Please allow me to explain.
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 very own China WFOE is the ability to secure a coveted work 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 6-10 months. Both companies are service companies that were hired by large American multinationals to provide the multinationals with services in China that they are providing in the United States. Both companies are uncertain if these China projects will last 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 not getting back increases. I also told them that I have been hearing more and more of people getting shorter visas than they would have liked. 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 even beyond the surefire visa led both companies to go forward with their WFOES.
Thank you China.
What are you seeing out there?