Setting up wholly foreign-owned enterprise WOFEs in Shenzhen China， Registration Procedure and Document Required WFOE stands for wholly foreign owned enterprise, which is a limited liability company wholly owned by either a foreign legal entity or a foreign natural person. The foreign investors may be foreign enterprises or individuals . Wholly owned foreign entities (WOFEs) are the vehicle of choice for most people and companies doing business in China. It is less complex than a joint venture (JV) and allows you to concentrate on what your employees are up to as opposed to your partners. It is required to register as a legal person who is restricted to certain businesses. The enterprise is able to implement strategies that effectively conform to the interests of the parent company aboard. Moreover, technology and know-how are given better protection. No. minimum registered capital is required for WFOEs with scope of business of consulting, Trading, retailing, information technology etc. in China. There are minimum registered capital still required for some industries for instance: Banking, Forwarding etc Since China still maintains foreign currency control policy, it's still advisable to choose registered capital within RMB 100,000 ~ RMB 500,000 as the minimum registered capital. Companies can now determine how much capital will be required to maintain their operations and must simply ensure that they meet those targets within a period of 10 years. Advantages of WFOE 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 on business rather than just a representative office function; 3. Issue invoices to their customers in RMB and receive RMB revenues. Convert RMB profits to US dollars for remittance to their parent company outside. 4. cheap labor, which can lower your cost; 5. not required to share profits with Chinese counterpart; 6. Greater efficiency in its operations, management and future development. ，Shenzhen Company Shenzhen is the best choice for business-doing in China. Shenzhen is situated in the Pearl River Delta. It is the first Special Economic Zone since China carried out reform and open-door policy 30
years ago. Shenzhen has an area of 1953 square km2 . Shenzhen is the best city both for living and working in China the fastest growing city in the world. In Shenzhen you can enjoy sound infrastructure and nice industrial chain for trading, manufacturing and value investment. Since Shenzhen is bordering Hong Kong, you can take lots of advantages and opportunities from “one country, two systems” policy. With sound infrastructure and easily recruited many talented personnel in Shenzhen, Foreign company can take this advantage to set up WOFEs in Shenzhen as china market entry strategies Registration process The application process to create a company in China generally takes three to six months. The establishment process varies based on the WFOE form and the planned business scope. For example, a Manufacturing WFOE will require an environmental evaluation report, and Trading WFOEs will need to undergo customs/commodity inspection registration. The application process can be divided into two parts: • Pre-registration – what happens before the company formally exists • Post-registration – what happens after the company formally exists Pre-registration 1. Name registration The company name can be translated from English by meaning and/or phonetically. Verification of feasibility of the proposed name by the AIC will take a few working days. Only the Chinese name will be legally binding – the English name is not legally relevant for Chinese authorities. Note that the words “China” and “International” cannot be freely included in the Chinese name, and are subject to further requirements. 2. Issuance of approval certificate and temporary business license The authorities will issue the approval certificate and temporary business license after assessing the following documentation: From the investor: • Business license (certificate of incorporation – depending upon locations, this may need to be notarized in the investor country of origin, and then translated into Chinese); • Bank statement to demonstrate credit worthiness (from relevant bank in country of origin and translated into Chinese); and • Photocopy of passport of the legal representative of the investor company. From the new company: • About the new business – Name of the company, business scope, registered capital, business term, lease contract; • About the legal representative – Photocopy of passport and passport-size photos; • About the directors – CVs, photocopies of passports, and passport-size photos; • Feasibility study report – Outlining the estimated cash flow for the next three years; • Articles of association; and • Environmental protection evaluation report (if applicable). The approval certificate will be issued by the local office of the MOFCOM. Upon issuance, there is a 30-day limit for registering the company with the AIC, which then issues the temporary business license.
Post-registration Following the issuance of the temporary business license, the WFOE would need to perform a number of formal registrations at various Chinese government entities, including applying for carving various seals (or chops) in order to authorize documents on behalf of the company, as well as opening an RMB account for managing daily operating expenses and a foreign capital account for receiving foreign currency. Compared to registering a business in most Western countries, registering a business in China is challenging work filled with paperwork and bureaucratic red tape. It is practically impossible to properly complete the registration process without a qualified agency. Be sure that the agency is qualified and the agency has good connections and relationships with the various local authorities, and that they possess comprehensive knowledge about the numerous important aspects involved with legally and properly registering a WFOE. Since 2006, Tommy China Business Consulting has been focusing on consulting services for our clients to set Up WOFE in Shenzhen. TCBC will manage all aspects of incorporation to get you a business license in Shenzhen China Please visit Http://www.tommyconsulting.com