Setting up WFOE in Xiamen will not only involve in the company licenses application with Xiamen relevant department, but also cover many different important points before move forward.
General Introduction of WFOE
A Wholly Foreign Owned Enterprise is a privately held limited liability company in Xiamen in which all the shareholders are foreign. It is the most favored investment vehicle as it gives full autonomy and control to the foreign parent company. They also come in various forms: A Consulting WFOE, which is the easiest to establish, a Manufacturing WFOE, which allows companies to manufacture in Xiamen, and a Trading WFOE or a Foreign-Invested Commercial Enterprise (FICE), which grants companies both import and export licenses and allows them to trade locally.
The process of setting a WFOE can be broken down into 2 parts, namely: the Pre-License Procedure, and the Post-License Procedure. The process does vary depending on the type of enterprise being established but below we outline the main aspects that are common to all three types.
Step 1: Define Your Chinese Business Name
The first step in the application process is to file for your official Chinese business name. There are fixed guidelines that need to be followed in order for you to select an acceptable name. The business name can be the same as your brand name for your products, but as the English name is not registered in business license, only the Chinese name is selected as the business name. So please provide four proposed company names in Chinese, in order of preference. We will then work with the local authorities to determine what should be the full legal name, which will likely include the scope of business and the location. The WFOE’s English name will be unofficial and is, for the most part, up to you.
Step 2: Prepare Your Legal Incorporation Documentation
The second step is to prepare all the necessary legal forms for the company registration. Other documents include the lease contract for a rented office space or building, The lease should also be in a proper format, and typically will need to be registered with the local house management authority as they are necessary for your bank account opening and working visa process, many foreigners are confused with the lease contract to be registered with house management authority, please provide it along with the landlord’s name and contact information. Tannet can help with the negotiation on behalf of the clients to discuss with the landlord for what necessary;
Step 3: Apply For Your Approval Certificate and Business License
The next step is to actually submit the documentation and apply for a Approval Certificate and business license at the local authorities. These include the Ministry of Commerce (MOFCOM) and the Administration for Industry and Commerce (AIC). From 2016, the Xiamen government has integrated the tax certificate and organization code license into one business license by taking the simplified procedures for licenses application. It will have a united standard credit code for each company for distinguish from other companies.
Step 4: WFOE stamps carving with local police security department
After the business license is issued by the Administration for Industry and Commerce (AIC), you will receive a message from government for the code of the stamps carving, usually the stamps will include the company stamp, financial stamp, legal representative stamp, and some other functional stamp for contracts and administrative purposes.
Step 5: Bank Account Opening
The second to last step is to open a bank account that operates in RMB. In addition, a foreign currency bank account must be opened for the contribution and verification of the foreign invested capital.
Step 6: Register With Other Authorities for import and export license if needed
The sixth and final step is to register the company with the other relevant authorities if the WFOE is a trading one. There are 5 different authorities that a company needs to get registered with in order to get the import and export license, These authorities include customs for customs license and Xiamen Entry-Exit Inspection and quarantine(CIQ) for CIQ registration form, etc.
Step 6: Open Bank Accounts
The sixth and final step is to open a bank account that operates in RMB. In addition, a foreign currency bank account must be opened for the contribution and verification of the foreign invested capital.
The process of setting up a Wholly Foreign Owned Enterprise in Xiamen can be overwhelming for people and organization who are unfamiliar with the process. It is really important to understand how it all works before you start to avoid mistakes that could increase costs and cause delays. It is always a good idea to consult experts in the matter to ensure your application is handled quickly and efficiently.
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.
Previous： Xiamen Taxes and Taxation
Next：Xiamen Investment Guide