China WFOE/Company Setup
Hotline: 86-755-82148419, Email: susiehu@citilinkia.com, Wechat: 13823131503
What Is A WFOE?
A WFOE – defined as a Wholly Foreign-Owned Enterprise (sometimes called a WOFE, an alternative acronym) is a limited, legal company that allows foreign entities to carry out their business activities in China. Such an enterprise:
Is allowed to hire/fire both local and foreign employees
Can work independently without needing a Chinese partner
Is eligible to provide official invoices (in CNY if desired) to customers
Can use USD to take its profits outside China
Has control over all of its profits
Can make use of Intellectual Property
Even though local companies have the same benefits – there’s no such thing as a “foreign company privilege” these days – these points are worth mentioning because foreign companies didn’t get this amount of freedom in the past. Now, as long as they register as a legal Chinese entity, foreign companies can move freely in the market and get the same benefits as a local company.
That also means that the foreign company – which later becomes a legal Chinese company – has to pay the same taxes, legal fees, and has to deal with a number of public obligations depending on its business model.
But knowing just the company type is not enough. You also need to tell the government what type of business activities you’ll be conducting in your Chinese WFOE. Typically, a WFOE is sub-divided into three different categories:
1. Trading
2. Manufacturing
3. Service/Consultancy
Chinese regulation needs to know your business scope. According to the local regulation, a company cannot operate outside its scope and needs to stay well within the boundaries of allowable business activities it has permission for. A trading company cannot be seen producing components, a manufacturing company should not be doing import/export at the ports, and so on.
However, there are some exceptions for the service sector, where it is allowable for, say, a manufacturing company to handle a few consultancy services as a side-operation to its main business activity. But again, there are limits to everything.
If you wish to start a completely different kind of operation, the only way to do that is to submit a new WFOE application and start from the beginning.Working with trusted local experts to set up WFOEs more cheaply, quickly, and correctly, is a sensible use of funds, and it's cost-effective.
ATAHK is an expert in corporate formation, trademark registration and all the follow-up business-related activities. ATAHK has established a sound service network worldwide for the small and medium-sized enterprises, all the services are business-orientated and solution-orientated.Through years of development, we have developed a service network in China’s major cities like Beijing, Shanghai, Guangzhou, Shenzhen, and popular cities among foreign people like Dongguan, Chengdu, Yiwu, Xiamen, Nanchang, Tianjin,three branches in Hainan. Equipped with competent consultancy team,ATAHK is able to provide various business solutions from business incubation, business operation to business management.
Contact Us
For further inquiries about investment in China, please do not hesitate to contact us at anytime anywhere by simply calling China hotline at 86-755-82148419, or emailing to susiehu@citilinkia.com.