China Business Consultant

1. How to Set Up Wholly Foreign-Owned Enterprises WFOE in Guangzhou China, WFOEs Registration Procedure and Document Required in Guangzhou Brief Introduction to Guangzhou Guangzhou is situated at the heart of the most-populous built-up metropolitan area in mainland China, an area that extends into the neighboring cities of Foshan, Dongguan, and Shenzhen, forming one of the largest urban agglomerations on the planet. Guangzhou is regarded as one of the central cities of China and core cities of the Pearl River Delta, Guangzhou has long been the top choice for multinationals for investment deployment in China since China's reform and opening-up. With the improvement of industry vitality, infrastructure, business cost, talent and innovation, the city will attract more global capital, technology, talent and information, and make itself more internationally competitive. 283 Fortune Global 500 companies, have established their Chinese branch headquarters in the city. Microsoft, IBM, Samsung and Cisco are among the many that have chosen to make Guangzhou their home in mainland China. For more information about Guangzhou,Please visit

2. http://www.eguangzhou.gov.cn/index.html http://english.gz.gov.cn/gzgoven/index.shtml How to Set Up Wholly Foreign-Owned Enterprises WFOE in Guangzhou China, WFOEs Registration Procedure and Document Required in Guangzhou 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

3. 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. 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

4. 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:

5. • 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. From 1st October 2016, China Ministry of Commerce has changed the foreign investment approval system into filing system. It means WFOE whose industry is

6. not restricted type or prohibited type can directly start the business registration first and then complete the filling system on website of Ministry of Commerce. This change has greatly reduce the policy risk when foreign investor plans to start a WFOE in China. 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. Tommy China Business Consulting has direct connections in the local government

7. Since 2006, TCBC has been focusing on consulting services for our clients to invest in Guangzhou China. We are specialized in establishment of wholly foreign owned enterprises (WFOEs), setting up of offshore companies, trading services, tax minimization Assist in obtaining government approvals and certificates for running business, negotiate and draft various legal documents provide legal advice, negotiate government officer for Land acquisition Advising on formation of WOFE and business structures ,managing and controlling WOFE in Guangzhou China, drafting privacy policies and structuring commercial transactions TCBC will manage all aspects of incorporation to get you a business license in Guangzhou China. Please visit Http://www.tommyconsulting.com Email: tomlee@tommyconsulting.com, Skype: tomleeli WhatSapp/Wechat/Cell Phone: +86 18926401128