“China has exceeded all the commitments we made since China joining the WTO, and also have further reduced the average tariff to 7.5%, much lower than other developing countries and emerging economies, China’s ranking of business environment has risen rapidly from 78th to 31st place over the past 2 years, China has substantially eased market access and liberalized manufacturing and accelerated the opening up of the service industries. The negative list of foreign investment laws has been reduced to 40 items, and China will implement the new foreign investment laws to provide a more standardized and favorable investment environment for foreign investors after the new foreign investment laws implemented on January 1, 2020.”.
- Wang Yi, Chinese State Councilor and Foreign Minister, December, 5, said at the exchange with friends in Seoul.
Wholly foreign owned enterprises (as well as: WFOE), as the most popular foreign investment tool and direct method, has got more and more attention from all over the world. Most of foreign businesses, brands have jumped into the China market to grow up their businesses by registering a wholly foreign owned enterprise (WFOE). Today, we invite Ms Jing Chen, the registrar of companies of SMEsChina platform, to edit and discuss the topic together, OK, let’s go ahead and to learn “How long does it take to register a Chinese WFOE?”.
From SMEsChina’s experience, a WFOE can be set up within 20 working days (around 3 weeks) if you have already all required documents and decisions. And next year, 2020, SMEsChina deeply believes that the whole process will be faster and simpler than before after the implementation of new foreign investment laws published on January 1, 2020.
Before you reading this topic, SMEsChina suggests you learn the basic requirements you have to prepare by our guiding page <incorporation requirements of foreign company>, this page contains main elements of incorporating Chinese companies, such as: company name, business scope, registered capitals and shares, how setting up the key structure of corporation, what documentations you have to prepare, and how to apply for the notarization and authentication documents from the Chinese Embassies. After you reading the core elements, you can better understand the timeline of WFOE setting up and what happens for each process.
How long does it take to set up a service WFOE?
Open a service, or consulting WFOE just needs 20 working days as following.
| Description of Each Step: | Time Required: |
|---|---|
| Corporate name search, submit, and obtain approval. | 3 workdays |
| Signature of documents, and legal files of company formation. | 5 workdays |
| Obtain the certificate of foreign owned (investment) enterprise and 5-in-1 business license. | 5 workdays |
| Company stamps, corporate seals. | 2 workdays |
| Bank account opening and internet banking. | 5 workdays |
How long does it take to set up a trade WFOE?
If you operate international transactions, also you have to apply for the import and export permits with extra process and timeline as following.
| Description of Each Step: | Time Required: |
|---|---|
| Corporate name search, submit, and obtain approval. | 3 workdays |
| Signature of documents, and legal files of company formation. | 5 workdays |
| Obtain the certificate of foreign owned (investment) enterprise and 5-in-1 business license. | 5 workdays |
| Company stamps, corporate seals. | 2 workdays |
| Bank account opening and internet banking. | 5 workdays |
| Import and export permits (foreign operator certificate, the Customs registration certificate). | 5 workdays |
What core elements of incorporating a WFOE?
Before you starting up a new WFOE in mainland China, you have to learn the following steps of the core elements of WFOE registration, and you have to decide the key information and prepare the required documents first.
| Steps: | Topics of Study: | Links of Reference: |
|---|---|---|
| Step 1 | Decide what types of software company, depends on your key structure of corporation (shareholder’s structure). | Selecting a company type |
| Step 2 | How to choose an available company name with bilingual for your private limited company. | Naming rules and requirements |
| Step 3 | List detail business activities from 10 industrial categories. | Selecting business scope |
| Step 4 | Set up the registered capital for your limited company. | Company registered capital |
| Step 5 | Set up core people of your local corporation, and key positions. | Decide corporate structure |
| Step 6 | Required documents you have to prepare in your country. | Documents required to register a company |
| Step 7 | Prepare notarization and authentication documents issued by China embassy. | Notarization and authentication documents |
| Step 8 | Download application forms and legal files and after filling and signing, courier to SMEsChina offices. | Company formation documents download |
What Initial Documents Required?
You have to collect and prepare the required documents by SMEsChina’s guidance, hereby, our lawyers have listed a brief table for your reference. Details you can link the page Registration Documents Download to get studies.
| Key Structure of the Company: | Required Documents you have to prepare in your home country: | Remarks: |
|---|---|---|
| Corporate Shareholder | Notarization and authentication documents for the certificate of registration of foreign parent company issued by the Chinese embassy. Learn more: Embassy Notarization Authentication Documents | 2 sets, bilingual |
| Individual Shareholder | Digital photo, notarization and authentication documents for the passport issued by the Chinese embassy. 16 years old at least. Learn more: Embassy Notarization Authentication Documents | 2 sets, bilingual |
| Legal Representative – Chinese People | Original ID card, 16 years old at least. Digital photo. | none |
| Legal Representative – Nonresident | Digital photo. Notarization and authentication documents for the passport issued by the Chinese embassy. 16 years old at least. Learn more: Embassy Notarization Authentication Documents | 2 sets, bilingual |
| Supervisor – Chinese People | Original ID card, photo, 16 years old at least. Digital photo. | none |
| Supervisor – Nonresident | Passport copy, photo, 16 years old at least. Digital photo. | none |
| Documentation Download List (PDF): | Signatory: | Remarks: |
|---|---|---|
| Letter of Commitment of Establishment of Foreign Investment Enterprise | Shareholder(s) | Bilingual, print double, black pen |
| The Letter of Attorney for Appointed or Authorized Agent | Shareholder(s) | Bilingual, print 4 copies, black pen |
| Foreign Company Registration (Record) Application | Legal Representative | Bilingual, print double, black pen |
| Information of Legal Representative | Legal Representative | Bilingual, print double, black pen |
| Information of Executive Director | Director | Bilingual, print double, black pen |
| Information of Supervisor | Supervisor | Bilingual, print double, black pen |
| Situations of Investors ( Shareholder Roster ) | Needn’t | Bilingual, print double |
| The Letter of Attorney of Services of Legal Documents of Foreign Investment Enterprise | Legal Representative and Shareholder(s) | Bilingual, print double, black pen |
| Commitment of the Registry Authority | Legal Representative | Bilingual, print double, black pen |
| Commitment of New Establishment | Shareholder(s) | Bilingual, print double, black pen |
| Virtual Registered Address Agreement | Legal Representative | Bilingual, print double, black pen |
| Letter of Attorney of Application of Company Seals | Legal Representative | Bilingual, print double, black pen |
| Letter of Attorney of Corporate Digital Certificate | Legal Representative | Bilingual, print double, black pen |
| Appointment Document | Shareholder(s) | Bilingual, print double, black pen |
| Sample of the Articles of Association | Shareholder(s) | Bilingual, print double, black pen |
| Application of Foreign Trade Operator Certificates | Legal Representative | Bilingual, print double, black pen, import and export businesses need it |
| General Taxpayer Application (VAT Qualification) | Legal Representative | Bilingual, print double, black pen |
How to speed up the process of WFOE registration?
As you can check out by this guidance, the whole process of registering a WFOE in China can be relatively comfortable and simple, however, the procedure only be truly easy if you have a professional adviser or lawyer or a local consultant, they know how to speed up the whole process and how how to guide your Chinese WFOE formation be completed smoothly without wasting time. So, that’s why SMEsChina is here, and looking forward to be your experienced partner and official company formation service provider.
The above clearly says that the required documents is the most important paperwork for a newly company, hence, before you registering a local WFOE, SMEsChina suggests you consulting our lawyers in advance for better preparing the documents for the corporate shareholder(s), director and supervisor, financial manager. To clearly preparing the legal files and documents can speed up the process and make everything smoothly from SMEsChina’s experience.
If all of the required documents and legal forms, application paperwork are in place, you can register your WFOE anytime, any places.
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