Wholly Foreign-Owned Enterprise (WFOE)--introduction

A WFOE is a 100% wholly foreign-owned enterprise subsidiary doing business in China. The foreign company has sole responsibility for its profits and Losses. 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.

One effective use of a WFOE is to replace the foreign enterprise representative office (RO).Whereas foreign enterprise previously involved in a joint venture would establish ROs in china to manage the administrative aspects of the venture; some have resorted to setting up WFOEs to handle the same responsibilities. As a whole, WFOE has a wide range of business scopes compared with RO. 

 1. The term varies according to the nature of the enterprise, any extension is subject to the approval of the relevant government authority
 2. Independently carry out parent Company's global strategy,
 3.There is a minimum capital contribution required, known as registered capital, which varies according to the business
 4.A WFOE can receive revenue in RMB, and issue RMB official invoices (Fapiaos) to customers
 5. A WFOE can transfer net income in RMB to US dollars for remittance to oversea parent Company.
 6. A WFOE can Hire Chinese labor directly adhere to all Chinese laws,
 7. The establishment of high-tech WFOEs is encouraged, And a WFOE can get intellectual property & technology know-how guarantee
 8. A WFOE is allowed to acquire land use rights in the form of land use right certificates.

WFOE rationally becomes the most popular form of enterprise to be used since investors may not find Chinese partners. Besides, capital threshold has been lowered with the implement of new Company Law in year 2006.

The advantages of setting up a WFOE are that the foreign entity can retain full control of management and sensitive business information, sidestepping the risks inherent in working with a Chinese partner. Without the advantage of market knowledge and distribution offered by a local partner, any choose the WFOE to conduct specialized business targeting a specific client base

In summary, WFOE can be helpful in setting up your business in China.  But it is not only a simple application procedure, you need to have a whole picture of  China’s investment environment and aspects which may help you, get a complete and sound understanding of WFOE related issues in China. We now provide you with series of knowledge and guidance

 1. Related laws & regulations,
 2.In the aspects of industry guidance,
 3. Investment environment, 
     4. Industrial zones,
 5.Preparations of feasibility reports and articles of associations,
 6. Company Tax planning and solutions
 7.Accounting and finance regulations
 8. HR service and individual tax planning