China WFOE

Posted by setupcompany on October 21st, 2017

The Limited Liability type company in China wholly owned by foreign investor(s) is called the Wholly Foreign Owned Enterprise, abbreviated WFOE or WOFE.

Foreign Direct Investment（FDI） in China has up to 108 billion USD since 2008, laying the foundation of China's economy to be the second largest one next to the United States. China has renowned as the big exporter of highly price-competitive goods as well as a major importer of western cargo due to the fast rise of the Chinese middle class and rising consumption needs in recent years. Business magnates, transnational corporations and individual investors all pay high attention to Chinese market.

With the commitment to speed international development, Chinese government issued lots of favorable foreign investment policies to benefit foreign investors. The major advantages of doing business in China would be its dynamic speedy-growing economy, fast-rising consumption needs, large trained labor pool, low employment costs, favorable business atmosphere, robust legal framework and governmental support.

With a WFOE incorporated in China does not mean you can engage in any kinds of business activities, as is the case in HK and some Western countries. WFOE can only operate under the business scope approved by Chinese authorities.

A WFOE in China can:
1. Carry out worldwide strategies of your parent company independently;
2. Invoice to clients in RMB while carrying out business than just function as a RO (Representative Office);
3. Receive revenues in RMB while carrying out business than a RO;
4. Convert RMB profits to US dollars for remittance to parent company outside of China;
5. Protect intellectual know-how and technology;
6. Full control of human resources;
7. Have greater efficiency in operations, management and future development;
8. Able to apply for working visa (residence permit) for its own legal person and employees;
9. Have no requirement for parent company to set up more than 2 years while for Representative Office’s need at least 2 years.

Set Up Costs

China WFOE (Wholly Foreign Owned Enterprise) Incorporated Fees Include:
Government license fees
Consulting fees
Registered office address (if applicable)
Notarization fees (if applicable)

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