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China Business Setup: Registering a WFOE in China

Updated:2018-5-15 14:25:33    Source:www.tannet-group.comViews:1456

China business setup is also called China company registration, China corporate formation, or China company establishment. Wholly Foreign Owned Enterprises (WFOEs) is one of the popular investment vehicle of choice for the international investor wishing to manufacture, process, or assemble in China. WFOE has great potential in China as companies seek new markets. The following are the general process for setting up a WFOE in China.

1. Choose a professional agency or legal firm
If you think that you can do it on your own, you’re wrong. Reading this section you’ll see that to open and run a company in China it is necessary to trust a professional that not only speaks Chinese fluently, but is also competent in legal and fiscal matters.

2. Choose the business scope
In China, there are a industrial sectors in which the government encourages foreign investment (usually by means of fiscal incentives), sectors restricted to foreigners and industrial sectors that are completely prohibited, and therefore inaccessible for foreigners.

The choice of business scope (or industrial sector) is extremely important. If you choose a business scope that is too “vast”, the risk that the permit to open the company will be denied increases because the sector in which you wish to operate falls under one of the restricted or prohibited sectors increases proportionately.

3. Prepare all necessary documents to the government
Generally speaking, the materials include:
(1) The name of the company, in Chinese, that you plan on using;
(2) The list of controlling partners (or companies) who, as was discussed in the previous section, must also be pre-approved;
(3) The managerial structure, or the names of the board directors, general manager, supervisor and legal representative; (copies of the passports are needed)
(4) The legal address of the company which should be exclusive;
(5) The Articles of Association (AOA), which contain vital information about the description of the business scope;
(6) The registered capital and the total investment;
(7) A business plan;
(8) Other documents requested.

4. Apply for approval with the responsible authorities
The responsible authorities should let you know if you’ve been approved or not, and give you your approval certificate within 90 days from when you submitted your application. However, keep in mind that, in the event of special circumstances (which as usual are not clearly defined by Chinese law), that period could be prolonged to allow for further verification.

5. Get a business license
Once you get your approval certificate, you’ll have 30 days to register with the AIC and apply for your business license.

6. Opening a bank account and depositing the registered capital
Once you get your business license, in order for the company to become active you’ll have to pay a corresponding amount to the registered capital in the company’s bank account, which you’ll have to open with the Bank of China or another bank designated by the SAFE.

7. Other possible procedures to perform after getting your business license
Besides opening a bank account and depositing the registered capital, here is a list that is not at all exhaustive, of the approvals (or registrations) that you need to get (or carry out) after getting your business license.

Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to 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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