China has a separate classification for business entities that are entirely owned by a foreign investor, and these are typically organized as a Limited Liability Company (LLC). However, it may comprise any business entity that has independent operation, finances, and accountability, even those that lack separate legal personality. Business entities that lack separate legal personalities and are classified as wholly foreign-owned business entities include partnerships and sole proprietorships, and current Chinese law permits two or more foreign legal entities or natural persons to form a partnership. Foreign investment regulation contemplates that a sole proprietorship entity is one where the foreign investor is granted business registration and has unlimited liability for the liability and debts of the entity.

Relevant Laws

Foreign Investment Act of China (& Administrative Regulations)
Investment Access Exceptions List
Rules for Forming Investment Companies

Further Reading

See our comprehensive resources on China’s Foreign Investment Law. and an overview of FDI regulation in our Foreign Investment Law FAQ.

Translation Guide

See: 外资企业