Setting up a WFOE

Guidance of Setting up a WFOE in China

WFOE as the most popular corporate structure for foreign enterprises and wholly owned 100% stocks as a subsidiary in Chinese Mainland.

With the deepening of economic reforms, a growing number of foreign companies, corporations, organizations, entrepreneurs have established their brands in China market with different industrial products, technologies and brands support. Most of them chose setting up the most popular corporate structure: wholly foreign owned enterprise ( WFOE / WOFE ) to do services, trading, technologies, engineering and others business scopes.

With the innovation of new 5-in-1 business license and the reformation of registered capital subscription system, the procedure of establishing a WFOE has become easier and quicker to obtain approval from local government offices. Whatever your China WFOE does, we have confidently and expertly experience to solve different industrial cases with our fast response services.

Business Activities of a Chinese WFOE

Obtain a business licence you have to list details business activities to local Market Supervision and Administration. Mainly includes below top 5 popular industries:

  • Service and consultancy industries.
  • Domestic and international trading.
  • Engineering and project management.
  • Technology innovation industries.
  • Manufacturing and industrial entities.

More business activities, please learn from: How Selecting Business Scope

Timeline – 20 Working days for Setting up a Chinese WFOE

Step 1. Name Approval – 3 Working days

You may get in touch with our online experts to obtain a list of requirements, once you place an order to our teams, SMEsChina will collect relevant information and files from your decision and submit name approval immediately for your China WFOE. And our consultants will send you one form, you have to complete it to confirm WFOE structure. Learn more: Company Name Requirements

Step 2. Preparation of Required documents – 5 Working days

This step depends on your cooperation, you have to prepare required documents from China Embassy in your home country, and meanwhile, SMEsChina Teams will apply for official legal documents and forms from different government departments and send you to sign, do not worry about this procedure please, all documents include both languages. Other official forms and application paper also through our teams and online guidance to provide assistance to help you filling in and completing.

Because the complexly requirements for different industrial investment guidance, need you to prepare and collect different industrial requirement, legal files, application forms and key positions of company structure, we suggest you contacting our online consultants first to get a list for required documents of registering a WFOE. Learn more: Foreign Company Incorporation Requirements

Step 3. Obtain a Business License – 5 Working days

Submit signed legal files, forms to local Market Supervision and Administration, you will obtain a official five-in-one business licence and certification of registration of wholly foreign owned enterprise. Five-in-one license means business licence, organization code, taxpayer certificate, social insurance certificate of registration and statistical registration certificate.

Some special industries also need other permits to get approval, such as import and export permits, food business permit, healthy exam, dangerous chemicals permits. These additional process needs extra costs and time.

Step 4. Company Seals / Stamps – 2 Working days

Unlike practices in the oversea countries, Chinese government stipulates that all Chinese WFOEs and business entities must apply for official company chops to validate contracts and legal documents once you running business here, you will obtain a company seal, a financial stamp, and legal representative seal, and all of them have the legal authority over the signature. And if your company includes foreign shareholder(s), you may choose an English company name to register on the foreign currency account and international trading certificate.

Step 5. Corporate Bank Account – 5 Working days

Your China WFOE needs to apply for a local corporate bank account to operate businesses, with the international development of Chinese banking industry, more and more oversea investors and foreign entrepreneurs prefer to create a Chinese local bank for their wholly foreign owned enterprises to handle daily business transactions conveniently and safely.

Once your corporate account be approved you will obtain a set of internet banking system and u-keys to operate daily payment wherever you are.

Done, Congratulations

Now, your China WFOE entity legally exists. You can startup and run you businesses in Chinese market. Same time SMEsChina can assist you registering tax system and apply for invoice machine once you have Chinese local customers, and in the future, if need we also can help you opening social insurance and housing funding accounts for you local employee and work visa and resident permits for foreign staff.

  • SMEsChina assists foreign business entities setting up a WFOE smoothly and comfortably by our professional experience and excellent service tems.

Why Choose Us? Completely service resource assisting global foreign enterprises setting up a WFOE entity in China with our confident and excellent experience since 2001.

WFOE Structure? 3 key positions must be contained, shareholder(s), supervisor, legal representative ( executive director ). All nationalities can be these key positions depending on your decision.

Registered Capital? The minimum registered capital is 20,000 USD for general industries, special industries stipulated separately. You can inject the capital from oversea account with foreign currencies within 30 years. Learn more:Requirements of Company Registered Capital In China

Whole Process? Do not need to visit or travel to Mainland China personally, whole procedure completed by online communication. Contact us to get model articles to fill in and send us to submit. Extend reading: Top 2 Chinese WFOE Categories

FAQs of China WFOE Establishment

China tax system stipulates strictly that whatever your corporate type is and business activities do, even if you do not have any business at the beginning, you must register taxpayer within 30 days after WFOE license be approved, and report tax situation such as income, expenses, VAT, profits ( known as corporate income tax ), personal tax ( employee ) etc.

Whole procedure from getting business license to opening corporate bank account, our standard pricing depends on your industry and business activities, you may contact our teams and just briefly explain what your WFOE does in China and details business scope, at the same time SMEsChina will send you a standard quotation and proposal.

Your decision, as a rule of thumb, whole process can be completed through online guidance, but there is no denying that come here in person is easier and quicker. If you do not want to come here in person, also can complete whole process for WFOE establishment.

Sure, all Chinese business entities ( WFOE, WOFE, LLC etc.) may hire local staff and foreign employees, and as a local employer, WFOE can hire foreign staff to obtain work visa and residence permit.

Except for above basic guidance and process, SMEsChina assists you obtaining import and export licenses and permits from the Customs and Inspection and Quarantine Bureau, this process needs extra procedure with another 5 working days.

There are many special industries need to register permits for your local company, whatever your company type is ( WFOE, Joint Venture, Limited company or other types ), special permits and licenses issued by different supervision department offices and they are compulsive requirements you have to get approval.

Such as: food and beverage licenses, liquor permit, dangerous chemicals, medical apparatus and instruments, dairy products, raw meat trade, etc.

If you do not know your list of products if includes special supervision, you may contact our WFOE experts to obtain more advice.

2 types you can select with Chinese registered companies.

First is small scale taxpayer can issue general invoice for your business activities ( trade or services, or engineering ).
Second is general taxpayer ( known as VAT ), can apply for general special invoice to Chinese customers.

Which is better, depend on your business and what kind of invoice your local clients need. And all of them need to report monthly tax records and quarterly profits, and attend annual government verification and inspection.

All company structure have to appoint below 3 key positions.

1st. Shareholder(s), can be the foreign individual(s) and oversea enterprise(s) registered in other countries.
2nd. Legal representative ( executive director ) can be non residents or local Chinese.
3rd. Supervisor ( secretarial position ), also can be non residents or local Chinese.

As a WFOE, you can inject the capital within 30years and amount must be injected from foreign shareholder(s)’ account(s), and through foreign exchange process transfer to RMB basic account to as daily operations, this process needs 2weeks to complete, our accountants will assist you operating it.

According to Chinese foreign enterprises laws and regulations, China government stipulate that foreign shareholder(s) can inject the registered capital within 30 years.

Whatever your company type is, WFOE, Joint Venture or partnership, you can use an oversea existed company as the shareholder, but you have to get authenticated and notarized documents for your foreign certificate of registration from China Embassy in your home country’s branch office. And courier these legally documents to SMEsChina submitting China industrial and commercial bureau to verify.

You can appoint local firm, secretary to collect and submit changing application to different industrial department offices, and the process will affect your daily operations like issuing invoice, maintaining social insurance and work permits for employees, and bank account ( example: change company name must apply for new corporate bank permit ), but you still can change any records and information for your corporate structure anytime.

Certainly, some industries need longer procedure to operate the changing application, such as international trading business, you also need to change the related information to obtain new business licenses, certification of registration of enterprise and other special permits.

All companies and partnerships registered in mainland China, must report monthly VAT records and quarterly corporate income tax to local tax authorities and collect documents to attend annual audit, government licenses inspection and information verification within March each year. If fail to deliver do these stipulations, key positions and company tax ID, register number will be listed into black name and be fined.

Yes, you have to register taxpayer within 30 days and report month accounts to local tax bureau, same time to create a corporate bank account paying taxes as a taxpayer. And prepare information and documents to public inspection for annual financial settlement and audit.

Any person can be the appointed as the legal representative under the LLP structure and other company types, if you are the director, shareholder, or employee, its your decision, legal representative known as executive director and appointed by shareholder(s). But legal representative can not be the supervisor under same group.

1. Contact our online consultants and obtain business advice.
2. Get a list for preparing required documents you have to collect in oversea.
3. Get a application forms of registering company to fill in.
4. Download and sign legal files and official forms.
5. Courier these documents to SMEsChina office from your country.
6. Obtain business licence, company seals, certificate of registration.
7. Appoint SMEsChina to open a local corporation account.
8. Tax registration to obtain VAT invoice, and register employee system.
9. If need, follow on the step for import and export permits.
10. None, exactly, That’s it. Whole Process done.

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Check if setting up a private company is right for you, how you launch a corporation depends on what business activities your company does. It can also affect the processes of registration and different requirements for your preparation.

SMEsChina focus on the growth of enterprise and providing a variety of business solutions in the area of strategy consultancy, WFOE setting up services, business registration, company formation, incorporation of domestic invested enterprise, finance and audit services, HR and payroll, corporate bank account, resident permit, immigration and visa, trademarks and legal compliance. If you have everything to set up a private business in Mainland China, you can get in touch with our teams to get more useful information and online guidance.

More than 47 million companies and small medium enterprises have registered their business entities in mainland China and over 3.5 million new enterprises are incorporated during each financial year with comfortable process of registering companies due to China government implemented new rules and regulation on business registration laws since Oct. 2014. That’s Why SMEsChina is Here.

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