Separate legal entity |
No |
No |
Yes |
Liability |
Extension of parent company |
Extension of parent company |
Limited Liability |
Entity Name |
Must be same as parent company |
Must be same as parent company |
Can be the same or different from parent company |
Allowed Activities |
Can only conduct market research or coordinating activities. Not allowed to conduct business activities that yield profit. |
Commercial activity within parent company's scope |
Can be the same or different from the parent company |
Set up time |
6 to 8 weeks |
12 weeks |
8 to 16 weeks |
Annual tax return required? |
No, but responsible for declaring employees' personal income tax |
Yes |
Yes |
Audit required? |
Yes |
Yes |
Yes |
Pros |
Easy registration procedure |
Can remit profits abroad |
- Limited liability to capital contribution
- Freely engage in any registered business lines that are not banned by local laws
|
Cons |
- Cannot conduct revenue generating activities
- Parent company bears liability
|
- Limited to certain industry sectors
- Parent company bears liability
|
- Cannot issue shares
- Maximum of 50 shareholders
|