Shenzhen WFOE Registration
Hotline: 86-755-82143348, Email:amyhuang@citilinkia.com
Introduction of WFOE
The Wholly Foreign Owned Enterprise (WFOE) is a limited liability company wholly owned by the foreign investor(s). In China, WFOEs were originally conceived for encouraged manufacturing activities that were either export orientated or introduced advanced technology. However, with China's entry into the WTO, these conditions were gradually abolished and the WFOE is increasingly being used for service providers such as a variety of consulting and management services, software development and trading as well.
The registered capital of a Wholly Foreign Owned Enterprise (WFOE) should be subscribed and contributed solely by the foreign investor(s). A WFOE does not include branches established in China by foreign enterprises and other foreign economic organizations. The Chinese Laws on WFOE do not have a clear definition of the term of "branches". The term of "branches" should include both the branch companies engaged in operational activities and representative offices, which are generally not engaged in direct business activities. Therefore, branches and representative offices set up by foreign enterprises are not WFOE.
Different types of WFOE
There are many businesses for WFOEs. The following are frequently chosen by our clients:
1. If the WFOE manufacture here, we call it a it's Manufacturing WFOE.
2. If the WFOE is allowed to do Consultancy or Service, we call it Consultancy (or Service)WFOE.
3. If the WFOE is allowed to do trading, wholesale, retail or franchising in China, we call it a Trading WFOE or Foreign-Invested Commercial Enterprise (FICE). (You can check "FICE Registration" on the right menu for more information and details about the FICE)
Advantages of WFOE
The advantages of establishing a WFOE include, but are 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 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. Full control of human resources
6. Greater efficiency in operations, management and future development.
7. Investor's parent company does not have to be established for more than 2 years while for Representative Office, it's parent company is required to have been established for more than 2 years.
Contact Us
For further queries about investment in China, please do not hesitate to contact ATAHK at anytime, anywhere by simply calling China hotline at 86-755-82143422, 86-755-82143512, or emailing to anitayao@citilinkia.com.