Case Study: From Hesitation to Expansion. How a European Tech Firm Successfully Entered China’s Market with the Right Structure

Kristina Coluccia
Nov 18
3 min read

Client Background

In early 2025, a fast-growing European software company approached Woodburn Accountants & Advisors. The company had developed a powerful AI-driven analytics platform and had already expanded successfully across Europe and Southeast Asia. Naturally, their next frontier was China — a market with vast potential but a reputation for regulatory complexity.

Despite strong demand from potential Chinese partners, the firm’s leadership team hesitated to move forward. They were unsure which business structure would align best with their strategic goals. They didn’t know whether to establish a WFOE, form a Joint Venture, or start with a Representative Office to “test the waters.” Every option seemed to come with risks, costs, and compliance uncertainties.

Their biggest pain point?

“We didn’t want to make a costly mistake by choosing the wrong structure, one that could slow down our expansion or lock us into rigid compliance obligations.”

Woodburn’s Approach

When the client reached out, we began with a detailed feasibility and structure assessment, evaluating their:

Business model and revenue sources
Data and IP sensitivity
Talent needs (local hiring and sales)
Long-term growth and exit strategies

We helped them weigh speed versus control — explaining how each structure (WFOE, JV, RO, EOR) could impact their tax exposure, operational flexibility, and ability to invoice clients in China.

After running several entry simulations, Woodburn proposed a phased approach:

Start with an Employer of Record (EOR) solution to quickly hire local business development staff and test market response — no legal entity required.
Once traction was proven and local demand validated, transition into a Wholly Foreign-Owned Enterprise (WFOE) to gain full control, issue local invoices, and expand sustainably.

This strategy allowed the company to avoid overcommitting capital upfront while still building a real, compliant presence in China.

The Results

Within just six months of adopting the EOR structure, the company had:

Hired two local sales managers and one technical support lead
Closed its first three enterprise contracts through local partnerships
Gained valuable insights into customer preferences and regulatory expectations

With 2026 fast approaching, the client is in the midst of greenlighting the establishment of their WFOE for Q1 2026 (with Woodburn managing the entire registration and compliance process), as the company already ahs confirmed local clients and a local team ready to operate and service them.

“Woodburn helped us move from uncertainty to confident action. Their phased entry plan saved us time, reduced risk, and gave us a compliant, long-term structure in China.” — CEO, European AI Analytics Company

How Woodburn Made the Difference

Woodburn’s expertise went beyond company registration. We provided:

Payroll and HR management during the EOR stage
End-to-end entity setup (business scope, registered capital, compliance)
Ongoing governance support post-incorporation
Strategic guidance on tax efficiency and profit repatriation

By combining compliance insight with practical market experience, we helped the client build a foundation for sustainable growth in China.

Ready to Find Your Perfect China Entry Strategy?

If you’re considering expanding into China but don’t know where to start, don’t let uncertainty hold you back. The right structure can be the difference between a compliant launch and a costly misstep.

Book a free China Entry Consultation with Woodburn Global today — and discover how to enter, grow, and succeed in 2026 with confidence.

Woodburn Accountants & Advisors is one of China and Hong Kong’s most trusted business setup advisory firms.

Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.