China business incorporation (WFOE) refers to incorporate a Wholly Foreign Owned Enterprise (WFOE or WOFE) in China, which is a Limited liability company wholly owned by the foreign investors. Over the last few years, there have been a number of changes to the wholly foreign owned enterprise (WFOE) establishment process in China.
Advantages of incorporating a WFOE in China
The advantages of incorporation a WFOE, compared with other types of enterprises, include, but not limited to:
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 out business rather than just function as a representative office and being able to issue invoices to their customers in RMB and receive revenues in RMB;
3. Capability of converting RMB profits to US dollars for remittance to its parent company outside of China;
4. Protection of intellectual know-how and technology;
5. For Manufacturing WFOE, no special requirements for Import/Export license for its own products;
6. Full control of human resources;
7. Greater efficiency in operations, management and future development.
Different Types of WFOE
Following are different types of WFOE. Commonly,
If the WFOE only be allowed to manufacture here, it may be the manufacturing WFOE;
If the WFOE is allowed to do Consulting & Service, it may be the Consulting WFOE;
If the WFOE is allowed to do Trading, Wholesale, Retail or Franchise in China, it may be the Trading WFOE or FICE (Foreign-Invested Commercial Enterprise).
Registration Procedures
Step 1: Name approval;
Step 2: Office/facility space lease;
Step 3: Environment impact assessment (for manufacturing WFOE);
Step 4: Ministry of Commerce of the People's Republic of China (MOFCOM) approval or record-filing;
Step 5: Business license;
Step 6: Carving chops;
Step 7: Open foreign exchange and RMB bank account;
Step 8: Import and export registration procedures (only for trading WFOE);
Step 9: General VAT taxpayer related procedures.
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 86-755-82143422, 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.
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