China WFOE - China Company Registration & Formation

The most common and acceptable business structure for major business in China is Wholly Foreign Owned Enterprise, abbreviated China WFOE or China WOFE.

WFOE refers to the enterprise set up within Chinese territory with capital 100% owned by foreign investor(s).

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.

If the WFOE trades, wholesales, retails or franchises, we call it a Trading WFOE; if it manufactures, a manufacturing WFOE.

If the WFOE implement consulting and advisory business, it is called a Consulting WFOE. If it provides food and beverage, a F&B WFOE.

For More Info, Apply For a Free Consultation.

Overview

Enormous Chinese Market

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 decades. Plus, with China’s large trained labor pool, low employment costs, favorable business atmosphere, robust legal framework and governmental support, business magnates, transnational corporations and individual investors all invest high attention to the Chinese market.

How to Invest in China

For China company registration and formation, foreign investors can choose to set up a Wholly Foreign Owned Enterprise (abbreviated as “WFOE/WOFE”), a Joint Venture (JV) or a Representative Office(RO).

Compared with Joint Venture or Representative Office, WFOE has long been the most frequently adopted company structure in China by foreign investors.

Wholly Foreign Owned Enterprise refers to the enterprise established within China with sole foreign investment in accordance with Chinese laws and regulations. WFOE is a limited liability company with independent management, accounting and the ability to bear legal responsibility independently. There are several factors should be taken into consideration for WFOE Registration Services as list below.

Registered Capital 

The minimum capital requirement of China WFOE registration in major business has been removed to aim at lowering the threshold for business startups and stimulating the foreign direct investment. But regional and industrial differences still exist.

Business Scope

Business scope is quite Chinese characteristics, not quite common in some western countries. 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 or WOFE China can only operate under the business scope approved by Chinese authorities.

Registered Address 

You could rent an office in China or choose to use our different packages of registered address to start your company right away. The registered address recommendation varies based on customers’ business plan in China.

Company Management Services 

Business China provides an all-round company registration and maintenance services to easy our customers’ business expanding in China and Hong Kong.

Functions

Functions of WFOE:

• Independent management without Chinese participation. The enterprise shall carry out the operation and management activities in accordance with the approved bylaws without interference;
• Carry out worldwide strategies of your parent company independently;
• Invoice to clients in RMB while carrying out business than just function as a RO (Representative Office);
• Receive revenues in RMB while carrying out business than a RO;
• Convert RMB profits to US dollars for remittance to parent company outside of China;
• Protect intellectual know-how and technology;
• Full control of human resources;
• Have greater efficiency in operations, management and future development;
• Able to apply for working visa (residence permit) for its own legal personality and employees;
• Have no requirement for a parent company to set up more than 2 years while for Representative Office’s need at least 2 years;
• Self-financing: The operating income shall be fully owned and controlled by the investors after taxation in accordance with the relevant tax regulations of China. If the enterprise terminates, it shall make an announcement in time and carry out liquidation according to the legal procedures;
• In addition to land, the investment of enterprises is 100 percent private to foreign investors and there is no equity of Chinese investor. An enterprise can be a partnership by foreign investors or individual proprietorship.

China WFOE Registration Process

A.Name pre-registration

• Apply for name pre-registration, the documents and certificates to be submitted:
• Name Pre-registration Form of China WOFE;
• The legal identification certificate of Chinese and foreign investors;
• The project proposal and its approval documents (wholly foreign-owned enterprises shall submit the application report and the written reply of local county government);
• The Power of Attorney;
• Approval documents of relevant departments shall be submitted if the business project is under the state limitation on the utilization of foreign capital or for special examination and approval of the industry;
• Other documents and certificates as required according to relevant laws, regulations, rules and policies.

B. Business licenses application

• Registration Application of Foreign-invested Enterprises signed by the Legal Representative;
• Contracts, Articles of Association & approval documents and certificates of the approval authorities;
• The Identification Certificate of the Investor (the Chinese side shall affix the seal of the issuing authority);
• The Credit Certificate of the Investor(if applicable);
• The Appointment Statement of Legal Representative, Direcor(s), Manager(s) and Supervisor(s);
• The identity card or passport of Legal Representative, Director(s), Manager(s) and Supervisor(s);
• Office lease contracts; we will provide these if using our registered address;
• Name Registration Application Form and Name Pre-registrational Notice (original);
• The Power of Attorney;
• Other documents and certificates as required according to relevant laws, regulations, rules and policies.

Note:

*We will help you draft and express all the above documents to you; all the documents shall be sent back by International express after we confirm your signature.

*Organization registration code certificate and tax registration certificate have been merged with the license into one business license.

C. Documents required for other industries

• Trade industry: Import and Export Certificate
• Food industry (health food): Food Business License
• Pharmaceutical industry：License for Pharmaceutical Trading 
• Cosmetics industry：Cosmetic Hygiene License/Cosmetics Business License
• Medical device Industry: Medical Device Operating Permit/Medical Device Production License/Class i, Class ii, Class iii Medical Device Registration, Filing, etc 

D. Apply for enterprise seal and seal record to protect the legitimate rights of WFOE.

Notes:
*The change of business scope shall be submitted to the board of directors with contracts, articles of association, approval documents of original examination organ and capital verification report. The additional items related to the special provisions of the State also require approval documents of governing authorities.

*Reducing registered capital should be announced at least three times on provincial newspapers with relevant certificates-the application signed by the board of directors (including the reason for the action, debt repayment or debt guarantee situation and the commitment that this action does not violate the interests of the people), balance sheet and the audit report of certified public accountants, the resolution of the board of directors, contract, articles of association and approval documents of the original examination and approval authority.

Materials to Certify

What materials need to be certified?

When overseas company/individual sets up a foreign investment company in mainland China, Chinese government will require the overseas company/individuals to apply for the notary of their identification certificate because the Chinese government bureau can not check the identification details of overseas companies/individuals.

The notarized certification process should be completed in the home country of the parent company or individual passport issuing country (if the passport issuing country does not have the Chinese Embassy or Consulate, one can go to the nearby country).
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It is required that foreign investors and overseas companies' Chinese investment must be approved by the local country, the Foreign Ministry of the host country and the Chinese Embassy.

Apply for a Consultation.

Overseas investors need to attest and notarize the following documents:

• Certificate of Company Incorporation
• Company Registration Certificate
• List of Directors and Shareholders
• Articles of Association of the Company
• Certificate of Legal Representative of the Investors
• Documents of the board of directors signed by the legal representative
• Other company documents

*Overseas individuals generally requires notarized passport file in duplicate

Note:

*Hong Kong companies to establish foreign companies in China are required to apply for the notarization of Chinese Notary authorized by the Ministry of Justice(Business China can do Hong Kong Company Notarization).

*Foreign companies/individuals require the notarization of the Chinese Embassy, which must be complete by customer themselves.

How to Start China WFOE Structure

• To start your China enterprise with a professional team in China.
• Our service process: Customize Service Package-----Start WFOE Registration Services---Courier Company File to You by International Express.
• We create an easy route for business incorporation in China.
• We also offer post-incorporation Services.
• We understand just how valuable your time is.
• At Business China, we are committed to return your email or phone call within 24 hours GUARANTEED.
• A foreign investor is not required to come to China physically to start the incorporation process.

Setting up as an Individual

• A scan of your passport
• A personal bank statement letter, only stating no bad record (in some cases, no need to provide)
• Choose a China name and English name for your China WFOE
• Choose the location for your company in China
• WFOE Application Form

Setting up as a Hong Kong Company

• Notarized copy of Certificate of Incorporation /Business Registration Certificate/NC1 (or AR1)
• Passport copy of legal representative and supervisor of China WFOE
• Hong Kong Company Business Account Bank Statement (in some cases, no need to provide)
• WFOE Application Form
• We can Establish and Notarize the Hong Kong Company for you in 7-8 working days

Setting up as a Foreign Company

• Certificate of Incorporation /Business Registration Certificate
• Passport copy of legal representative and supervisor of China WFOE
• Foreign Company Business Account Bank Statement (in some cases, no need to provide)
• WFOE Application Form
• All Documents need to be attested and notarized by the China Embassy