Pros and Cons to setting up China facility as a Company or Site

I know there are a few companies out there where they set up there China facility as a separate company.

Is there anyone who set up their facility as a separate SITE? If so, why did you do this as opposed to a company?

Are there legal ramifications for either set up?



We setup our China facility as a separate company because it is a distinct legal entity. We did not want to mix the US financials and the Chinese financials into one General Ledger.

Rick Stannard

IT Project Manager



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I agree with Rick. It would be a legal entity and therefore should be a company. Plus I understand that they have outrageous reporting and auditing requirements with direct government reporting requirements.

You can’t (or shouldn’t) do it as a site. It is a separate legal entity and having it as a site would make it’s assets and liabilities under your company which is innacurate and probably illegal.

At a client I worked for in the DC area (you may remember them wink wink), the CFO despaired to me more than once about the financial reporting requirements of their China operation. I’m pretty sure your US auditors wouldn’t allow it even if it COULD be done (which I doubt).

I was trying REALLY hard to forget…thanks! M

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