Setting Up A WFOE in Shenzhen

Setting up a WFOE in Shenzhen can also be referred to as Shenzhen company registration (WFOE). WFOE is the abbreviation of Wholly Foreign Owned Enterprise. The establishment process of a WFOE can vary from the chosen structure, namely a service WFOE, manufacturing WFOE, or trading WFOE, and its associated business scope. For example, a trading WFOE needs to register with authorities such as Customs after obtaining a business license, while a manufacturing WFOE must complete an environmental impact evaluation report. The incorporation process is shown as below.

Step 1: Name Approval
One of the first steps for foreign companies is to decide on an appropriate name for the Chinese market. The key pieces of legislation governing this are the Regulations on Registration and Management of Enterprises Name and the Implementation Measures on Registration and Administration of Enterprise Names, which detail how a Chinese company name should be structured.

Step 2: Office Location
As the company name contains the city of registration, careful consideration should be made before engaging an estate agent or landlord. In some cases, the city name can affect operations, as certain city names carry prestige and credibility that may impact sales, business development, and governmental relations. Relocation, especially cross-district, is a taxing and expensive process, as it may implicate registration with a new AIC and tax authorities, in addition to the MOFCOM filing record procedures, business license, bank information, and other company certificates that must be revised.

Step 3: MOFCOM Approval (namely record filing)
As long as a company’s business scope is not restricted by the Negative list for Foreign Investment (in free trade zones), or is not subject to the special administration measures for foreign investment access, the application can go through a simplified record-filing process, recently promulgated in the Provisional Measures for the New Filing System issued by MOFCOM.

Step 4: Business License Application and Registration
After receiving an Approval Certificate from MOFCOM, registration and application for a business license can be made to the local AIC within 30 days of receipt.

Step 5: Carving Chops
All companies operating in China are required to have an official seal, which is round in shape and bears the official company name in Chinese, and where applicable, in English. A company seal can be obtained from the local Public Security Bureau (PSB) after successful registration with the AIC.

Step 6: Bank Account Opening
A WFOE in China needs to have a minimum of two banks accounts: an RMB basic account, and a foreign currency capital contribution account. An RMB basic account is a must for a WFOE’s daily business operations in China. And the foreign currency capital contribution account is necessary to receive capital injections from overseas. Approval to open this account can be obtained from SAFE.

Setting up a WFOE in Shenzhen, or even China, is the most popular choice for foreign investors. Since there are different types of WFOE, it is important to keep on top of these changes in order for the establishment process to run smoothly, particularly as the different business intents of WFOEs will affect the nature and steps of the set up process.

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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