WFOE Registration in China
Register a WFOE
Register a WFOE (Wholly Foreign Owned Enterprise) in China
A WFOE is a Limited Liability Company that permits companies to engage in profit making activities and hire both local and foreign employees on the territory of mainland China.
WOFE is the most popular type of legal entity in China used to establish business by foreign shareholders and entrepreneurs. There are no restrictions on foreign residents to register a WOFE, the whole process of business registration is the same as local citizens.
WOFE – Wholly Owned Foreign Enterprise, the company’s 100% shares owned by foreign shareholder(s).
Vita Liberta Limited has extensive experience in setting up legal entities in mainland China that are created by foreign investors. Also, an important aspect when starting a company in China is getting the right license to do business.
To establish a WFOE, a foreign investor will need to prepare a set of legal documents such as Articles of Incorporation, Audit Reports, Business Plan and other
Requirements to setup WFOE in China
To set up a WFOE, there certain requirements that needs to be met:
Basic initial requirements to open a Chinese WFOE:
- It needs at least one investor (from any country except China, including Hong Kong, Macau and Taiwan regions)
- One director. It may also be a board of directors. Important to note that foreign shareholder can be a director;
- One General manager;
- One legal representative;
- One supervisor, who can not be a director, legal representative, or senior executive of the WFOE)
- Registered company address. It may be a virtual office address, but it is safer for business to have real office – it is not that a big problem if you plans for China are serious;
- Business plan and detailed description of the company’s planned activity.
Some industries or regions in China can have other requirements, so it is important to be in contact with a local expert to ensure that you qualify to set up a WFOE in China.
Vita Liberta Limited can serve as your global partner in helping you to expand to China in a fast and compliant manner.
WFOE share capital requirements
As a matter of fact no capital is required to be invested upfront aside from the actual costs of the registration.
But, to make it easier to process obtaining a certificate of registration, we recommend foreign investors to declare a registered capital no lower than 1,000,000 RMB when registering the WFOE (subject to the business activity and district of registration). Important to note that
such amount is not required to be invested into a WFOE at the beginning or in full. It is more like the amount of funds that is planned to be generated by the WFOE within a fixed period of 29 years. The registered share capital may be used to support the costs of the newly established WFOE’s activities such as paying salaries and other things.
WFOE registered address in China
To set up a company in China with foreign participation, the investor must provide a valid legal address to the registration authority.
The government body considering the establishment of companies by a foreign investor requests the following set of documents:
- two originals agreements for lease of office;
- two copies of certificate that confirms ownership of the premises that related to the register address. They should be stamped with the official stamp of the holder;
As it was said previously, there is a possibility to use a virtual office lease contract. But, a real office is a more preferable option.
If the Chinese WFOE is going to be established as a subsidiary (the shareholder is another company), the following set of documents is to be provided:
- The scope of business of the WFOE;
- The list of goods to be exported or imported;
- Reference letter from the bank where a shareholder has a bank account;
- To propose ten Chinese names for the new company; the name should take the following form: AB (名字 – the name given to the company) + (上海 – Shanghai) + (上海 – Shanghai) +贸易/国际贸易 (trading/international trading) + 有限公司 (Limited company);
- One investor’s certificate of identification or registration;
- two certificates of investor’s identification or registration. The notarization should be executed by a local public notary, and verified by the Embassy of China in the home country of the investor;
- Certified copies of directors, legal representatives and supervisors passports;
- Copies of passports of the financial manager and tax specialist of the company.
General WFOE setup procedure
Before creating a Chinese WFOE, an investor will be required to comply with various measures to fulfill all pre-licensing requirements, namely:
Getting the required documents for the application process;
Approval of the company name for application/pre-registration;
Registration of the documents and signature of the investor;
Getting a business registration license.
As a company you will bear special ongoing responsibilities after your business license is issued.
Public security bureau registration;
Producing stamps of a company;
Securing a bank account;
Import & export license application (if relevant);
Application for the general taxpayer (VAT taxpayer) and application for tax refund permit (upon request).
Select the package that meets your requirements
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How long does it take?
It takes 3 weeks to register for WFOE. After obtaining an approval of license registration, you may open a bank account within 1 week, so you may start-up just in 1 month.
Is it hard to open a bank account?
The bank account opening is a rather safe process, your company will get a bank account and this may be done even remotely.
When shall I provide a tax return?
In China you have to report monthly incomes and expenses, and profits. For this you need a local accountant.
Do I need to go to China personally?
China is positively changing the commercial registration system, and it has become more and more convenient for foreign companies to register their business entities here. After you get notarization and authentication documents from Chinese embassy, you can register your WFOE easily and don’t need to come to China