Shenzhen company formation is one of the most popular choice in China, and open a WFOE (Wholly Foreign Owned Enterprise) may be one of the best choices. Shenzhen is the first Special Economic Zone in China, which offers a haven for startups and foreign business opportunists. Bordering on Hong Kong, the value of investment for foreign businesses here is rising just as fast as the city itself. Below is an overview for registering a WFOE for you reference.
I. Advantages of WFOE in Shenzhen
1. Formally carry out business rather than just function as a representative office;
2. Preferential policies of Shenzhen Special Economic Zone;
3. Capability of converting RMB profits to US dollars for parent company;
4. Protection of intellectual Property;
5. Efficient in operations;
6. Other than for a Representative Office, the Parent company of a WFOE does not have to be established for more than 2 years.
II. Different Types of WFOE
Following are different types of WFOE. Commonly,
1. If the WFOE only be allowed to manufacture here, it's the manufacturing WFOE.
2. If the WFOE is allowed to do Consulting & Service, it’s the consulting WFOE.
3. If the WFOE is allowed to do Trading, Wholesale, Retail or Franchise in China, it’s the trading WFOE or FICE (Foreign-Invested Commercial Enterprise).
III. Business Scope
According to WFOE regulations, foreign investors are permitted to setting up a 100% foreign owned enterprise in industries that are conducive to the development of China’s economic benefits, and not prohibited or restricted by China government. The Catalogue of Guidance to Foreign Investment" categorizes fields of potential investment as "prohibited," "restricted" and "encouraged".
It is advisable to fully comprehend the interpretation of these categories. In China, Business scope of a business is a "one sentence description" covering all of the present and future activities of the WFOE. The WFOE can only conduct business within its approved business scope, which ultimately appears on the business licence.
IV. Process for registering a WFOE in Shenzhen
1. File for your official Chinese business name.
2. Prepare all the necessary legal documents for the company registration.
3. Submit the documentation and apply for a business license at the local authorities.
4. Register for taxes at the local Tax Bureau.
5. Register company with relevant authorities in order to get established.
6. Open a bank account that operates in RMB or foreign currency.
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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