Setting up a company in China
Registering your company in China may be complex and often confusing. Thankfully, Corporation China will assist you every step of the way in getting your foreign company registered in China. There is an increase in the development of China’s economy and thus the Chinese market has become good ground for people to invest in.
If you want to start a consultancy company that is a WFOE wholly foreign owned enterprise (limited liability company) and you want to part-take in the consultancy activities in China then you will find all the help you need, here. There are many types of consultancy WFOE in China: China Management Consulting, Headhunting Services, Education Consulting and Technology Consulting.
In the last decade China has become the most lucrative business destination especially for consulting firms around the world. According to the IBIS World Business Intelligence, the average growth rate of China’s consulting services market is up 10% from 2009 to 2014. This has been due to China’s investment in high-tech and consulting service in China. Following Chinas entry into the WTO, WFOE is now being used for service providers offering consulting and management, software development and trading. Any business in China which is solely owned by a foreign company is a WFOE – legal entity. The prospects for foreign investors is a WFOE is emerging with new markets and China is becoming the worlds top investment destination.
Different types of businesses
The following are different types of WFOE:
– Manufacturing WFOE
– Consulting and Services
– Trading, Wholesale, Retail or Franchise in China
- foreign investment enterprise
In the 90s there were many foreign consulting firms that entered into China and they provided Chinese businesses with consulting services. The world’s largest consulting services have extended to the Chinese markets and are now offering their services to clients from around the world regarding HR, operations, marketing and business strategy.
Below is a list of advantages of setting up a consulting company in China:
· China’s has comprehensive management
· A consulting firm’s ability to repatriate profits to their parent company
· The issuance of a tax invoice
· Easy availability of all forms of consulting services
· No requirement for physical offices
· No requirement of capital injection
There are several advantages of having a WFOE in China such as benefitting from a high margin and doing away with the tradition regulations that foreign consulting firms deal with, while working in other countries. Foreign consulting WFOE are competing with top local consulting firms in China, for international clients. Thus, competition is increased and so is the efficiency of China consulting service providers. Large cities like Shenzhen, Guangzhou, Shanghai, Beijing are a few of the cities that have consulting services. These cities are known as the four major business centres of China.
Establishing a Consulting WFOE means you will:
· Have the independence and freedom to implement the strategies of its parent company without considering the Chinese partner or a equity joint venture.
· Ability to formally carry out business and be involved in the happenings of the business instead of functioning as a representative office. They will be able to issue invoices using Chinese currency and receive payment in RMB also.
· Able to convert profits in Chinese currency to US dollars for its parent company outside of China
· Protection of intellectual know-how and technology;
· There is no special import or export license for WFOE manufacturing
· Full control of human resources
· Greater efficiency in operations, management and future development.
What is Business Scope?
Regarding WFOE regulations, investors from other countries are allowed to set up a business that is owned 100% by a foreign company which will help the Chinese economy to grow. It is recommended that businesses educate themselves on the thriving markets in China and provide a service in one of those markets. A business scope is basically a description of your business in one sentence. It should cover the present and futuristic plans for the business and must include any future activity of the WFOE in the country. The WFOE will only be allowed to carry out its business once the business scope has been approved, this will appear on the business license. A business scope includes investment consulting, international economic consulting, trade information consulting, marketing and promotion consulting, corporate management consulting, technology consulting, manufacturing, etc.
Setting up a WFOE in China may seem difficult however with Corporation China you don’t have to stress about this process. We will walk you through everything that you need to do and ensure that you are fully aware of each step in the journey. and there is no need for any capital requirements for registered capital.