WFOE Setup Service

Wholly Foreign-Owned Enterprise in China (WFOE / WOFE)

Many foreign companies and investors are looking to expand their business abroad in China, because of the growing market that provides a lot of opportunities.

Despite the recent simplified regulations changes over the years, the WFOE setup remains as a complicated and time-consuming procedure. Dutch Sino Business Promotions offers you a turnkey service for setting up your daughter company (or WFOE) in China, our experiences and professionality will ensure you a smooth entry to the Chinese market.

What is a WFOE?

A wholly foreign-owned enterprise, also known as a WFOE, is a 100% foreign-owned limited liability company in China created with foreign capital. It is the most popular entity for foreign investors to enter the Chinese market due to its flexibility and high degree of control.

According to Chinese laws, a WFOE can act the same as any other Chinese company. All companies in China are only allowed to conduct business activities such as trading, manufacturing, and servicing within their approved business scope.

Why should you choose for a WFOE in China?

• Autonomy

A WFOE can be set up without a Chinese business partner. Therefore full control can be retained by foreign investors. There is no need to take the interest, needs, and schedule of a domestic partner into consideration which makes the decision making more efficient and streamlined.

• Full control over human resource management

A WFOE is allowed to directly employ both Chinese and foreign workers without any limitation of the number of employees employed by the company.

• Revenue

The company can entirely conduct their business activities in China and generate revenue in RMB/Foreign Currency.

• Official invoices

Possibility to issue official invoices (‘Fapiao’) to customers in RMB with VAT available for a tax deduction.

• Intellectual Property

Better protection of intellectual property rights and technology.

• Long term licensing

For businesses with long term plans in China, setting up a WFOE is the beset option since it is possible to obtain extensions of the WFOE duration for up to 30 years.

Prior Considerations

To speed up the process for establishing a WFOE in China, it is recommended to take the following key points into consideration prior to the application process to be able to run through the process as smoothly as possible.

• Business scope

A WFOE in China is restricted to only conduct their business activities within its registered business scope. This will be approved by the business license authorities and should include a specific description of what the company is planning to do within a specific industry.

• Operating location and Company Name

The investors should consider in which city or province the WFOE will be located. The operating location, chosen name, industry, and incorporation form will be included in the company name to be able to get approval from the Chinese authorities.

• Capital requirements and funding

In recent years, there have been regulation changes regarding the minimum capital requirement. Officially, there is no defined minimal capital requirement. However, in reality, a certain capital is still needed to be approved to set up a WFOE in China and will be reviewed by the Ministry of Commerce and Administration for Industry and Commerce.