10/13/2026
🏢 Chinese companies planning U.S. manufacturing can operate directly under their existing company or establish a separate U.S. subsidiary. When the Chinese business supplies funds, equipment, and technology and intends to own the investment, a subsidiary may be appropriate. The subsidiary signs contracts, employs workers, and records expenses and revenue separately, helping the parent assess factory profitability and receive investment returns through its shareholding.
📍 Location affects taxes, labor costs, transportation, and workforce availability. Companies should confirm that local zoning permits their manufacturing activities and that electricity, water, drainage, and fire protection support production. Power upgrades may add costs and delay startup.
Before choosing a Corporation or LLC, businesses should compare income tax reporting, profit repatriation, and ongoing compliance costs. Incorporating in another state may require additional registration where the factory operates.
📋 After formation, companies can obtain a free IRS Employer Identification Number. BEA reporting may apply when foreign investors hold at least 10% of voting interests and expected startup costs exceed $40 million; relevant businesses costing $40 million or less require a BE-13 exemption filing. The applicable deadline is 45 days after establishment.
💵 Funding must cover facility acquisition or leasing, machinery, installation, renovations, recruitment, and permits, plus operating expenses such as wages, utilities, and materials. Chinese parents must complete applicable NDRC and MOFCOM approvals or filings, followed by bank-handled foreign exchange registration and remittance procedures. Equity investment provides ownership and potential dividends; loans require agreed amounts, interest, uses, and repayment schedules, together with separate overseas lending registration.
Companies should choose financing based on expected profitability and repayment capacity.
⚙️ Parents can sell machinery, contribute it as capital, or lease it while retaining ownership. Equipment budgets should include dismantling, ocean freight, duties, customs clearance, inland transportation, reinstallation, and commissioning. Parents can also retain ownership of production technology and trademarks while licensing their use to subsidiaries under defined geographic, product, and time limits. Before providing technical documents or overseas training, companies must check China's prohibited and restricted technology export categories and obtain any required authorization.
📑 Related-party equipment sales, component supplies, technology licensing, and loans require reasonable pricing support. Companies should follow arm's-length pricing rules and retain contracts, transaction records, and financial documentation identifying each party's responsibilities.
🏭 Before production, businesses must finalize suitable premises, complete applicable renovation, fire safety, and environmental permitting, install equipment, and recruit employees. Facility location, zoning, electrical capacity, building conditions, and leasing costs affect both investment budgets and ongoing operations. CUPS Realty assists industrial property searches, market assessments, and leasing or purchases in California, Texas, Georgia, and New Jersey.
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