How to set up a WFOE in China? Hainan is a land of opportunity, which has a lot to offer to prospective entrepreneurs. The business-friendly environment provided in the island improves your chances of earning greater returns. Nevertheless, do avoid taking hasty decisions. Conduct market research and carry out a cost-benefit analysis before setting up a company in Hainan. If required, Tannet is glad to provide you with a Hainan Market Entry Report.
Many businessmen venture into Chinese markets by setting up a WFOE (Wholly Foreign Owned Enterprise). Setting up a WFOE isn’t an easy process. a lot of paperwork, documentation, and registrations are required to become operational in China. The following is a brief introduction to establish a WFOE in Hainan.
Advantages of WFOE
The WFOE is an ultimate solution for foreign businesses to set up a limited company in China. Any legal business can be fully operational within China by completing the registration process. After becoming a WFOE, you will benefit from the following perks:
1. Recruit both foreign and local workforce;
2. Carry out official business transactions;
3. Profits can be converted from Chinese currency (CNY) to the US dollars;
4. Benefit from better intellectual property rights and gain control over company’s assets;
5. Manufacturing businesses don’t need additional permits or license to carry out import and exports;
6. Retain all the profits earned.
Types of WFOE
In China, WFOE can be classified into three major categories:
1. Manufacturing WFOE;
2. Consulting WFOE;
3. Trading WFOE.
The type of WFOE you register determines the scope of your business.
Requirement on WFOE
1. Registered Capital
Depending on the nature of your business, you’ll be required to provide a certain level of registered capital to ensure the local authorities that your business remains a ‘going concern’ in the near future.
Generally, a manufacturing company will be asked to maintain RMB 500,000 of registered capital, a trading company, RMB 300,000, whereas, consulting companies are asked to maintain a registered capital of RMB 100,000.
2. Registered Office
Before submitting an application for forming a WFOE, you need to rent official building (office or manufacturing plant) in advance. Keep in mind, your registered office can’t be in a residential building.
3. Company Name
The official, registered name of your WFOE needs to be completely in Chinese. The State Administration of Industry and Commerce (SAIC) requires foreign businesses to submit 8-5 alternative names to the authorities. Names need to be reserved prior to application for business license.
How to Set Up a WFOE in Hainan
Your last option for setting up a business in China is to complete the registration process all by yourself. This is the cheapest way to set up a business, but it has multiple drawbacks. The process and documentation is completely in Chinese. Moreover, multiple local offices and authorities need to be visited for documentation and permits.
In addition, foreign companies often find themselves at a loss, because of the language barrier. To avoid all these inconveniences, you are recommended to entrust an experienced corporate service provider in China, like Tannet.
Tannet streamlines and simplifies the registration process and makes it a hassle-free event for all types of business. Our English-proficient consultants help you with all type of red tape and complexities of entering a Chinese market and provide comprehensive solutions. We don’t only help in the registration of WFOE, joint ventures, representative offices or partnerships, we also offer premium accounting and company management services to all out clients.
Contact Us
If you have further inquiries, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Shenzhen hotline at 86-755-82143422 or Hong Kong hotline at 852-27826888, 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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