China Wholly Foreign Owned Enterprise Registration

China Wholly Foreign Owned Enterprise registration is one of the choice for foreign investors to set up a business in China. Wholly Foreign Owned Enterprise (WFOE) is a limited liability company that is wholly owned by one or more foreign investors. It is a preferred investment vehicle among foreign investors intending to set up a manufacturing or processing business in mainland China.

Under Chinese law, a WFOE is a limited liability company that is fully owned and capitalized by foreign investors and operated without a local (Chinese) partner. This provides you with greater control over your businesses operations, revenue and profit targets. Since it is a separate legal entity, it also limits your liability to the contributions made to the registered capital of the WOFE. A WOFE is the favorable option for an overseas company that wants to that wants to enter the Chinese market.

Advantages of WFOEs
(1) Fully owned and capitalized by foreign investors and operated without a local (Chinese) partner;
(2) Greater control over your businesses operations, revenue and profit targets;
(3) Employ local and foreign resources directly, without the need for involving any local intermediary;
(4) No Restrictive Norms on Parent Company.

Types of WFOE in China
1. Service (or Consulting) WFOE
Its core activity is provision of services. It is the easiest and quickest to setup.

2.Trading WFOE
Its core activity may involve import, export and domestic distribution, namely, wholesale, retail, brand franchising.

3. Manufacturing WFOE
As obvious from the name the entity is involved in manufacturing and processing activities but is one of the more complex entities in terms of setting up procedure, time-frame and capital involved.

Within these three broad categories, there are further breakdowns depending on the sector in which the WFOE operates. It must be noted that the scope of business activities generally determines the type of WFOE and the cost and procedure of setting up a WFOE varies depending on its type.

Company Registration Procedures
Foreign investors are not permitted to directly submit the application documents of incorporate a WFOE to the relevant authority in China. They must retain a PRC entity that is authorized or permitted by relevant authorities. Procedures for setting up a Wholly Foreign Owned Enterprise in China are the following:

(1) Name registration with State Administration of Industry and Commerce (SAIC);
(2) Certificate of Approval by Ministry of Commerce or Foreign Economic Cooperation Bureau;
(3) Apply for Business License with SAIC;
(4) Chops made by Public Security Bureau (PSB);
(5) Organization Code License by Technical Supervision Bureau (TSB);
(6) Tax Certificate by Taxation Bureau;
(7) Registration and Approval with State Administration of Foreign Exchange (SAFE);
(8) Open foreign currency and RMB bank account;
(9) Inject capital from investor's overseas bank account;
(10) Capital Verification Report by Certified Public Accountant (CPA);
(11) Apply for permanent Business License with SAIC;
(12) Financial certificate registration;
(13) Statistics license registration;
(14) Import/Export license (applicable for Trading & Manufacturing WFOE).

Contact Us
If you have further queries, don’t hesitate to contact Tannet anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143512 or 86-755-82143181 or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.

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