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How to set up a company in China as a Foreign

What is a China WOFE?
Types of WOFE Categories
What are the Advantages and Disadvantages of Registering a WOFE?
How Does a WOFE Compare to Other Types of Companies?

What is the

best option for new companies

And what to do after deciding to move ahead. 

Most of companies nowadays are somehow directly or indirectly connected to China.

One of the many incentives created to boost the Chinese economy is that foreigners are able to enjoy their own special business category designed to attract foreign investment into China: which is called WOFE. Basically, a WOFE or also called WFOE, is a registration category full with benefits made to perfectly fit all types of activities you decide to do in China.

Corporation China’s goal is to make sure your registration process is done securely, correctly and under the right structure for your business.

How to set up a company in China as a Foreign

1. What is a China WOFE?

The most obvious way for How to set up a company in China as a Foreign is a WOFE

A Wholly Foreign Owned Enterprise is a limited liability company, also know as LLC, that is fully owned and capitalized by foreign investors and operated without a local Chinese partner. This provides you with greater control over your businesses operations, revenue and profit targets. A WOFE is the favorable option for an both individuals or overseas company that wants to enter the Chinese market.

2. Types of WOFE categories

A WOFE is a commonly used investment vehicle for mainland China-based businesses and it can be roughly classified into:

China Trading WOFE

Importing and Exporting

Purchasing Products for Export

Selling in China Local Market

Claiming VAT Tax Back

China Consulting WOFE / China Service WOFE:

All types of Consulting Services

Overseas Investment Consulting

Issue ” Fapiao” Tax Invoices

China Food & Beverage WOFE

Coffee Shop or Restaurant

Food Import & Export

Wine or Alcohol Import & Export

China Local Food sales

China Manufacturing WOFE

Set up a Factory

Manufacture products for export

Assemble products

Engineering Factory

3. What are the Advantages and Disadvantages of Registering a WOFE?

In one hand, the majority of companies coming to China brainstorm on the sales strategy part of the plan of how to explore and conquer such a huge market. But on the other hand, some might overlook the fact that in order to successfully operate the new company, choosing the right structure is crucial to truly achieve a solid expansion. To better help on your decision process, here is a list with some of the key factors that makes a WOFE one the best options in China.

– Independence and freedom to implement the worldwide strategies of its parent company without having to consider the involvement of the Chinese partner; Take control, be the boss.

– Ability to formally carry out business rather than just function as a representative office and being able to issue invoices to their customers in RMB and receive revenues in RMB;

– Capability of converting RMB profits to US dollars for remittance to its parent company outside of China; Working in China and not being able to enjoy the outcomes of your work out of China? Not what most would want for themselves.

– Protection of intellectual know-how and technology in China;

Imagine you start operations in China and suddenly realizes that someone else holds the trademark of “your” brand. Don’t let that happen to you.

– For Manufacturing WFOE, no special requirements for Import / Export license for its own products; Always good to save time and efforts.

– Full control of human resources, greater efficiency in operations, management and future development.

In addition: no need of minimum registered capital, no need of office rented, and no need to physically come to China to start it.

Here are some of the potential disadvantages:

Setting up a WFOE does not mean that you can engage in any type of business activity, as is the case in some Western countries. In China, WFOEs can only operate within the business scope initially approved by the authorities. Business operations other than those initially authorized are subject to further approval by the relevant authorities. Hence, it is vital to determine what you want to do from the onset.

Setting up a WOFE can take from 2 to 3 months.

4. How Does a WOFE Compare to Other Types of Companies?

Setting up a WFOE in China means independent control of management and the ability to carry out worldwide strategies. In addition, it provides a legal status to protect know-how and technology, full control of human resources, great efficiency in operations, and self-financing…

If your business strategy in China just covers market survey, technology communication, and other indirect business activities, then a Representative Office is a more suitable option in your case. Unlike a WOFE, a RO is not considered to be a separate legal entity from the parent company and thus cannot carry out direct revenue earning business activities. Since it cannot enter into purchase/sales contracts and cannot receive payment for products or services, it cannot generate any income by itself, issue invoices or repatriate money overseas.

Another way to enter the Chinese market is via a Joint Venture (JV). In China, a JV is a form of enterprise created through the partnership between foreign and Chinese investors. The joint venture partners share the profits, losses and management of the JV. If you want to acquire the intangible assets of a JV (such as brand, etc.) and marketing channels, then a Joint Venture in china is also the right choice for your business.

5. WOFE Registration Process

1. Company name check

2. Company business license application

3. Special license application. For example: import/export, liquor, etc…

4. Bank account opening

6. Requirements to Register a WOFE in China

First things first. Decide who is going to be the foreign investor and prepare identity documents accordingly.

Second, this is the time when you get choose a name for the Chinese WFOE. It must have a Chinese name and English name.

Third, decide the registered capital amount. As mentioned further on this document, there is no minimum amount for register capital, but its definitely recommended that it matches reasonable proportions according to future operations.

Finally, decide the candidates for supervisor or the board of supervisors, managing director or the board of directors, general manager or manager, and deputy manager.

7. WOFE Registered Address

Why use a registered address? A Registered Address is a good way to register your Chinese Company as you do not need to rent an expensive office .

Can you use my registered address to apply for a work permit visa? Yes , It can be used for Visa

Can I work from my home or another office if I use a registered address? Yes you can. The law states you can work from anywhere or even from a coffee shop.

Its is legally required to have an address to perform a WOFE company registration in China. Luckily there are several companies that can provide this kind fo service. However, no one knows better how this process works as Corporation China does, this is because Corporation China’s board of directors were the responsible team for creating the registered address concept in China. This means you can leave all the work with us and be confident everything will be properly done for your future company.

But if your business plan really requires to have a “real” office, then you can certainly do it by tradicional ways. First, you will need to find an office space in China via a different channel, either by real estate agency or the landlord directly.

8. WOFE Registered Capital

The time when China used to require minimum registered capital for WOFEs is gone. Everything in China is now being shaped to promote foreign investment, this means regulations are constantly being changed and improved to enhance the business environment. Since March 1, 2014, the statutory minimum was waived for almost all types of WOFEs. Certain high-profile business scopes still have statutory minimum registered capital amounts. For instance, financial companies must have at least US$10M in registered capital. However, if you fall under a normal consulting company or if your business is import/export related, then you have nothing to worry about.

Nevertheless, is important to mention that after regulations changes in 2014 the new rules eliminated the minimum register capital requirement, but is still highly recommend, also common sense, that you to keep the amount of registered capital close to a realist assessment of the company’s operational proportions.

You will not be required to immediately make a deposit for the full amount of registered capital. The new default is that the registered capital can be paid within 30 years of the business license being issued.

8 ADDITIONAL ADVISE ON CHINA TAX SYSTEM FOR WOFEs

When we talk about income taxes in China its important to clarify the difference between Corporate Income Tax and Individual Income Tax. The assessment of these two categories is based on profits generate by entities during a given period, and salaries earned by individuals. All individual income taxes in China vary from 5% to 45%, exceeding more than RMB3500 for local staff and RMB 4800 for expatriate staff. The corporate income tax rate is fixed at 25%, based on the net profit.

Turnover taxes include Value-Added Tax and Consumption Tax. VAT percentages are usually 17%, 13%,11% ,6%, 3% and 0, being defined according to the company category and tax payer status.

Not much can be done when it comes to Custom Duties, regulations are pretty clear on this matter. Therefore all goods and articles imported into and exported out of the territory of the People’s Republic of China are entitled for duties.

How to set up a company in China as a Foreign

How to set up a company in China as a Foreign

How to set up a company in China as a Foreign’s dramatic development comes from its diverse economic base. Major industry networks include communications, electronics and the information industry, biomedicine, auto manufacturing, petroleum, sophisticated chemical and steel manufacturing, complete-set equipment manufacturing, finance, insurance, real estate, household electrical appliances, etc. How to set up a company in China as a Foreign is the largest consumer market among all mainland cities, supported by the rising income level and a massive inflow of tourists. Also considered China’s most significant financial center with over 1,430 financial institutions, including banks, insurance companies, and securities companies, of which 230 were foreign-invested.

 How to set up a company in China as a Foreign

How to set up a company in China as a Foreign

How to set up a company in China as a Foreign

Corporation China is the leading company registration firm in China. We offer How to set up a company in China as a Foreign and help you establish a Wholly Foreign Owned Enterprise in How to set up a company in China as a Foreign, and we can also provide the registered address. How to set up a company in China as a Foreign is an excellent choice for companies that are in computer software, IT, microelectronics and components, video and audio products, electromechanical integration, and critical projects of light industry and energy. Meanwhile, newer industries such as pharmaceuticals, medical equipment, biotechnology are also on the rise in How to set up a company in China as a Foreign in The unique feature of a WFOE is that the entity is 100% owned, capitalized, and operated by foreign investors without the help of a local partner. A WFOE allows you to maintain greater control over your business operations, and revenue targets. Also, it will enable you to conduct business in How to set up a company in China as a Foreign on your own without the need for a local partner. A WFOE is a favorable choice for an overseas company that wants to incorporate into mainland How to set up a company in China as a Foreign permanently. Establishing a Company in How to set up a company in China as a Foreign for consulting can be used for the following : Consulting Business Services Restaurant Management Overseas Investment Consulting Great & Flexible Start-Up

How to set up a company in China as a Foreign Company set up

Establishing a Company  a How to set up a company in China as a Foreign for Trading can be used for the following : Importing and Exporting Purchasing Products for Export Selling in China Local Market Claiming VAT Tax Back

  • Consulting Business Services
  • Trading Import & Export?Registration
  • ManufacturingCompany Registration
  • Bringing your Brand to China

How to set up a company in China as a Foreign ADVANTAGES: A Low Capital Requirement Total Management Control within PRC Total Management Control within PRC Issue ” Fapiao” Tax Invoices Applying for China work Visa in Corporation China is the ONLY company that can supply a How to set up a company in China as a Foreign WFOE Registered address that will be the PERMANENT Legal address of your company. HR & Recruitment This is the most commonly outsourced HR function and involves monthly payroll processing as well as the calculation of monthly employer and employees? Social benefits contributions to the relevant Chinese authorities HR Administration & Consulting Services How to set up a company in China as a Foreign employment environment is complicated due to the need to integrate national laws and local policies

How to set up a company in China as a Foreign (WOFE) incorporation

 How to set up a company in China as a Foreign A Wholly foreign-owned enterprise (WFOE) could be a company established in How to set up a company in China as a Foreign in line with Chinese laws and wholly closely-held by one or a lot of foreign investors. Establishing a How to set up a company in China as a Foreign does not require a significant overhead investment.

  • A WOFE can be incorporated to conduct general business activities in China
  • It gives foreign investor complete control of the day to day business and decision-making without any compulsoryinvolvement from a Chinese partner.
  • It can engage in any business activities, issue invoices to clients, receive RMBs, convert profits into foreign currency, and repatriate them.
  • It is the most effective way of protecting trademark technical information and trade secrets.
  • It provides complete authority regarding the hiring of staff and does not require you to hire Chinese staff.
  • A How to set up a company in China as a Foreign requires either one director of foreign nationality or a holding company locatedin Hong Kong to act as an investor.

SHANGHAI  How to set up a company in China as a Foreign

  • Full Legal setup procedures
  • Company name approval
  • Certificates of Incorporation
  • Company Stamps and Chops
  • The company Business scope

BEIJING How to set up a company in China as a Foreign 

  • Company Bank Account
  • Tax & Accounting
  • Full Back office support
  • Register for Tax Invoice ( Fapioa Machine)
  • China Payroll Service
  • Marketing Services 

    Learn more

Everything you need to start your company the right way easily. We take care of the complete China Company Registration process Learn more

  • Full Legal setup procedures
  • Company name approval
  • Certificates of Incorporation
  • Company Stamps and Chops
  • The company Business scope

    FAQ

Company Registered Address

Corporation China is the ONLY company that can supply a China WFOE Registered address that will be the PERMANENT Legal address of your company.

  • Permanent Legal Company Address
  • Company can operate from any location(s)

Post-incorporation company setup

  • Company Bank Account
  • Tax & Accounting
  • Full Back office support
  • Register for Tax Invoice ( Fapioa Machine)
  • China Payroll Service
  • Applying for China work Visa

How to set up a company in China as a Foreign (WOFE) China incorporation – Shanghai, Beijing, Shenzhen, Guangzhou

Types Of WOFE’s
  1. Consulting or Service WFOFE.
  2. Manufacture or Factory type WOFE
  3. Trading WOFE – Wholesale, Retail or Franchise in China
  4. FICE (Foreign-Invested Commercial Enterprise) FICE Registration

– Business Scope The Business of How to set up a company in China as a Foreign Scope is narrowly outlined and understood for all businesses in China; a WFOE could solely wrongfully conduct business at intervals the business scope that seems on its business license. In the application documents, the business scope is written as a listing of business activities that the  can conduct in China, and therefore the initial commercial activity can outline the general nature of the WFOE for classification functions. The classification can any outline the minimum needed capital, style of invoices, style of applicable taxes, etc. in concert example, for a previous WFOE registration, the company’s business scope was written as “retail of cosmetic merchandise, coaching on cosmetic merchandise, after-sales services.” the character of this WFOE was thus outlined by the Chinese authorities as a “retail- trading WFOE”, so the desired registered capital was RMB300,000, and it had been ready to receive the Value-Added-Tax invoices that area unit essential to a company in China.

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Gabriel Carrillo

Regional Director 

Gaby is an expertise lies in Media, Marketing and Strategy

He speaks Spanish, Italian, English and Chinese 

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