A WFOE, sometimes called WOFE, shorted as Wholly Foreign-Owned Enterprise, is a common investment vehicle for mainland China-based business wherein foreign parties (individuals or corporate entities) can incorporate a foreign-owned limited liability company. WFOE are among the most popular corporate models for non-PRC investors due to their versatility and unique advantages.
WFOE Advantages and Benefits
These are the detailed advantages and benefits of establishing a WFOE and include, but are not limited to:
a. Independence and freedom to implement the worldwide strategies of its parent company without having to consider the involvement of a Chinese partner.
b. Ability to formally carry out business rather than just function as a representative office and being able to issue invoices to customers in RMB and receive revenues in RMB.
c. Capability of converting RMB profits to US dollars for remittance to its parent company outside of China.
d. Protection of intellectual know-how and technology.
e. No requirement for Import / Export License for its own products.
f. Full control of human resources.
g. Greater efficiency in operations, management and future development.
h. Investor does not have to be established for more than 2 years, compared to a Representative Office’s parent company that is required to have been established for over 2 years.
i. Shareholder liability limited to sum of original investment.
WFOE Advantages and Benefits VS RO
a. Foreign investor has full equity control and management;
b. Foreign investor(s) contribute 100% of registered capital;
c. WFOE can issue different invoice(fapiao) according to different business scope, RO is not allowed to issue the invoice (fapiao);
d. WFOE can engage in direct business activities or enter into contracts, while RO is restricted to enter into contract directly, the contracts can be only signed between the RO parent company and local clients;
e. WFOE can hire local staff directly, while RO can only have the staff employment through fesco or other outsourcing agent locally;
f. WFOE can have more working visa issued to foreign staffs than RO did as its character as legal and separate entity;
Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, 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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