Shanghai WFOE incorporation time
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Shanghai WFOE incorporation time is about 50 days.A Wholly Foreign Owned Enterprise, popularly known as WFOE in China, is a company based in the People’s Republic of China and is entirely owned by foreign investors. The entity has the structure of a limited liability company and finds its stride in foreign funds. WFOE is the most preferred structure which allows full ownership and control by the foreign investors, making it possible to develop internal structure as well as the privilege to convert the local currency for profit repartition use.
Different types of WFOE
Following are different types of WFOE. Commonly,
1. If the WFOE only be allowed to manufacture here. we can say it's manufacture WFOE.
2. If the WFOE is allowed to do Consultancy & Service, we call them Consultancy Service WFOE.
3. If the WFOE is allowed to do Trading, Wholesale, Retail or Franchise in China, we call them Trading WFOE or FICE (Foreign-Invested Commercial Enterprise).
Advantages of WFOE
The advantages of establishing 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. No requirement for Import / Export license for its own products;
6. Full control of human resources
7. Greater efficiency in operations, management and future development.
8. To set up a WFOE, Investor doesn't have to be established it's business overseas for more than 2 years while Representative office's parent company is required to have the parent company been established over 2 years.
Business scope
One of the most important issues in WFOE application is business scope. Business scope needs to be defined and the WFOE can only conduct business within its approved business scope, which ultimately appears on the business license. Any amendments to the business scope require further application and approval. Inevitably, there is a negotiation with the approval authorities to approve as broad a business scope as is permitted. Generally business scope includes investment consulting, international economic consulting, trade information consulting, marketing and promotion consulting, corporate management consulting, technology consulting, manufacturing, etc. With China's entry into WTO, more and more business is open to WFOE especially in Trading, Wholesale and Retail business.
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