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Dongguan Corporate Formation (WFOE)

Updated:2018-1-26 14:30:30    Source:www.tannet-group.comViews:141

Dongguan corporate formation (WFOE) is one kind of the most popular business entity in Dongguan. The Wholly Foreign Owned Enterprise (WFOE) is a Limited liability company wholly owned by the foreign investor(s). In China, WFOEs are originally conceived for encouraged manufacturing activities that are either export orientated or introduced advanced technology.

Advantages of WFOE in Dongguan
1. Independence and freedom to implement the worldwide strategies of its parent company without having to consider the involvement of the Chinese partner;
2. Ability to formally carry on business rather than just a representative office function;
3. Issue invoices to their customers in RMB and receive RMB revenues. Convert RMB profits to US dollars for remittance to their parent company outside;
4. Cheap labor, which can lower your cost;
5. Not required to share profits with Chinese counterpart;
6. Greater efficiency in its operations, management and future development.

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.

Company Name
The official company name of a WFOE in China should be in Chinese. The Chinese name should be formatted as: first word -company name/product (For instance: Tannet; second word: activity (For instance: business consulting); third word: location/name of city (For instance: Shenzhen); fourth word - company structure.

Profit Repatriation
China Government allows Foreign Invested Enterprises remit their profits out of the country and such remittances do not require the prior approval of the State Administration of Foreign Exchange (SAFE). Dividends cannot be distributed and repatriated to oversea if the losses of previous years have not been covered while dividends not distributed in previous years may be distributed together with those of the current year.

Terms and Termination
In China, terms of 15 to 30 years are typical for a manufacturing WFOE (although some may have a longer term). It is also possible to obtain extensions of the WFOE's duration. For projects in which the amount of investment is large, or the construction period is long and the return on investment low, projects producing sophisticated products using advanced or key technology provided by the foreign partner, or for projects producing internationally competitive products, the term of WFOE may be extended to 50 years.

Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website www.tannet-group.net, 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.

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