Hainan wholly foreign owned enterprise formation is one way to set up a business in Hainan. Wholly foreign owned enterprise, abbreviated as WFOE or WOFE, is a Chinese registered company that is completely owned by foreign investors (individual or corporate). For a foreign company wanting independent operation in China, with the ability to invoice clients and make a profit a WFOE is certainly the best option.
Advantages of a WFOE
A WFOE registration is the most complete and flexible option for opening a company in China. It has many advantages over the other options of a Representative Office or a Joint Venture operation.
1. Can be formed without a Chinese partner;
2. Can make profits in China;
3. Able to send funds overseas;
4. Able to hire staff directly;
5. The best option to protect IPR in China.
Pre-registration Considerations
Setting up a WFOE in China is a time consuming and sometimes frustrating process. Early consideration of some key areas however will help greatly, for example,
1. Establish the most appropriate company ownership structure;
2. Consider management roles within the WFOE;
3. Consider WFOE capital requirements and prepare funds;
4. Draft an appropriate business scope describing company operations;
5. Choose an appropriate company name;
6. Research into necessary IP protection and file as appropriate;
7. Consider tax requirements, and plan appropriately;
8. Select operating location.
How to Register a WFOE in Hainan
The Chinese government has proactively updated and changed laws surrounding WFOE registration and management as the market has changed. Some of these changes have made it easier for foreign companies to enter China, such as removing capital requirements. Others have simplified the registration process, with changes such as the introduction of an easier “5 in 1” business license allowing a single application for multiple licenses and permits. In summary, this involves the following steps:
1. Apply for name approval and registration.
2. Rent office space as necessary.
3. Online registration via MOFCOM.
4. Apply for a “5 in 1” business license from the local Administration of Industry and Commerce (AIC).
5. Carving chops for the new company.
6. Opening bank accounts.
7. Further registrations with local authorities.
8. Issue contracts and complete necessary registration for employees.
When considering how to enter the China market, or starting a business in China as a foreigner, it is important to get someone who can help in navigating through the market. Tannet has a dozen of branch offices in China, we are glad to help you in doing business in these oriental country.
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 86-755-82143512, 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：Hainan Company Setup: Preferential Policies for Industrial Parks
Next：Hainan Work Permit Application