Wholly Foreign Owned Enterprise
China WFOE Registration
Want to register a company in China? Set up a Wholly Foreign Owned Enterprise (WFOE) and start your business!
China WFOE Incorporation & Support
WFOE is an acronym for Wholly Foreign Owned Enterprise. Wholly Foreign-Owned Enterprises (WFOEs) are the most popular business structure for foreign businesses entering China and allow foreign companies to establish a presence in the country without the need for a local partner. WFOEs are limited liability companies that are 100% owned by foreign investors (individuals or companies), and they can engage in a wide range of business activities, generate profit, invoice clients and hire local and foreign employees in China.
WFOEs are subject to the same laws and regulations as domestic companies in China and are required to register with the relevant authorities and obtain necessary licenses and permits. Setting up a WFOE takes 2 to 3 months. We’ll need to prepare all incorporation documents, open your Chinese corporate bank accounts, and assign a legal representative.
Generate profits
Send funds overseas
Hire staff
Invoice clients
China WFOE Company Types
Consulting WFOE
For companies providing services in or from China.
A consulting WFOE is the most simple foreign-owned legal entity to set up. No additional licenses or certificates are needed.
Trading WFOE
For companies importing into or exporting out of China.
Trading WFOEs are essentially consulting WFOEs armed with an import/export license and other licenses for specialty products. Trading companies can take advantage of Free Trade zones in Shanghai & Guangdong.
Manufacturing WFOE
For companies conducting manufacturing operations in China.
A manufacturing Wholly Foreign Owned Enterprise is a highly specialized WFOE that has passed safety and environmental government examinations in order to manufacture products in China. Ideal for assembling final or intermediate goods.
China WFOE Registration Procedure
1. Preparation
Deciding your company's structure and details.
- Company name in Chinese
- Company name in English (optional)
- Registered address
- Registered capital
- Shareholder/s
- Business scope
2. Document submission
Collection and organizing your company registration application.
- Notarized shareholder/s documents
- Articles of incorporation
- Chinese translations of documents
- Authentication by Chinese embassy
3. Company registration
Application with the administration for Market Regulation (AMR). Your wholly owned foreign enterprise is registered and company chops issued.
- Business license
- Company chop
- Financial chop
- Legal representative chop
4. Corporate Accounts
Opening of your corporate bank account & tax accounts.
- Corporate bank account
- Social insurance account
- Housing fund account
- Tax registration number
5. License applications
Application and issuance of additional licenses if applicable.
- Import / export license
- Food & beverage license
- Alcohol license
- Medicine license
6. Post-registration support
Monthly tax & accounting reports for compliance.
Changing times in China
As China’s economy and demographics change, the advantages of a WFOE has become increasingly apparent. As China shifts from a profitable base of manufacturing and export to a country with a growing middle class and domestic spending opportunities. With the ability to sell and invoice in China, WFOEs take full advantage of China’s exponentially growing consumer economy.
As a result, the types of WFOEs being registered are also changing. In the recent past, the WFOE structure was most popular for manufacturing companies. Nowadays, an increasing number of WFOEs are in the consulting and management sectors, as well as high tech and software development.
A simplified company registration
The Chinese government has proactively updated and changed laws surrounding WFOE / WOFE registration and management as the market has changed. Some of these changes have made it easier for foreign companies to enter China, such as removing WFOE capital requirements. Others have simplified the registration process, with changes such as the introduction of an easier “5 in 1” business license allowing a single application for multiple licenses and permits.
Unfortunately, it’s not all good news for WFOEs! Some changes have brought increased challenges. There are, for example, new regulations requiring identification of the actual people or companies in control of the WFOE. Challenges also continue to arise from the split between central and regional government responsibility. Many application aspects are left to local discretion, and this can vary widely! Good contacts and experience dealing with relevant authorities can be very valuable here.
FDI China Exclusive Tax Refund
Jing’an is a centrally located district in Shanghai, to the west of the Bund. This area is very popular among working class citizens and expats in Shanghai and is home to many multinational companies & startups.
FDI China has exclusive premium registered addresses in Jing’an district that qualify for tax rebates that increase with taxable income brackets. For more details on the tax refunds available, connect with us directly via contact form and/or read more about Jing’an by clicking the link bellow.
Our Working Process
1. Consultation & Proposal
We (can) advise you on the best solution for your business model and send you our comprehensive proposal.
2. Signing & Payment
After reviewing the proposal, we sign the service contract and receive your payment.
3. Preparing Documents
We send you an application form as well as the list of documents we need from your side.
WFOE FAQs
What is a WFOE?
A WFOE (Wholly Foreign-Owned Enterprise) is a legal entity in China entirely owned by foreign investors. It allows non-Chinese nationals or companies to operate a business in China independently, without requiring a local partner.
Why should I choose a WFOE to do business in China?
A WFOE provides full control over business operations, profits, and decision-making. It also offers advantages like hiring staff directly, invoicing in RMB, and protecting intellectual property.
What types of WFOEs are there?
There are three main types of WFOEs:
- Consulting WFOE: For consulting, IT, or other service-based businesses.
- Trading WFOE: For businesses importing, exporting, or wholesaling goods.
- Manufacturing WFOE: For producing goods within China.
What is required to set up a WFOE?
The key requirements include:
- A registered office address in China.
- A clear business scope (a description of the activities your company will conduct).
- A minimum registered capital amount (depending on your industry).
- Legal documents such as Articles of Association, proof of identity for shareholders, and bank account setup.
Do I need a Chinese partner to start a WFOE?
No, a WFOE allows you to operate independently, unlike a joint venture that requires a Chinese partner.
What industries can a WFOE operate in?
A WFOE can operate in most industries, but some industries in China are restricted or prohibited for foreign investment. Consulting with local experts is essential to ensure compliance.
How long does it take to set up a WFOE?
The process typically takes 1-3 months, depending on the complexity of your business, the location, and how quickly required documents are prepared.
What taxes does a WFOE have to pay?
WFOEs are subject to corporate income tax, value-added tax (VAT), and other taxes such as property taxes if applicable.
What is the role of a legal representative in a WFOE?
The legal representative is the person who has the authority to act on behalf of the company. They:
- Sign key documents.
- Represent the company in legal and financial matters.
- Are responsible for the company’s compliance.
This person can be a foreigner or a Chinese citizen.
What is a business scope, and why is it important for WFOE registration?
The business scope defines the activities your company is legally allowed to perform in China. For example, “import/export trade” or “IT consulting services.”
A well-defined business scope ensures compliance and prevents issues during tax filing or licensing.
Can a foreign company own property in China?
Yes, a foreign company can own property in China if it is registered locally as a WFOE or JV. Representative Offices (ROs), however, cannot directly own property.
Do I need a commercial ICP license to operate a business website in China?
Yes, if you plan to run an e-commerce website or any profit-generating online platform, you must obtain a commercial ICP license. Non-profit websites only require a standard ICP filing.
Can I register a company in China and hire foreign employees?
Yes, foreign companies can hire both local and foreign employees. To hire foreign staff, the company must provide a work permit and assist with the visa process.
The government will take into account a few factors for work visa issuance such as: how long has the company been registered, how much tax history does the company have and how many local employees does the company employ.
This does not apply to shareholders of a new company, as these individuals will always receive a work visa.
What are the post-registration compliance requirements?
Once registered, a company must:
- File taxes monthly & quarterly.
- Maintain proper accounting and auditing.
- Follow labor laws for employee contracts and social insurance.
Can a WFOE in China send funds overseas?
Yes, a WFOE in China can send funds overseas.
The process depends on the nature of the transaction.
Payment for Goods or Services
- Requirements:
- A valid contract or invoice.
- Proof of goods received or services rendered (e.g., customs declaration, shipping documents).
- Proper documentation for foreign exchange approval.
Dividends Repatriation
- Requirements:
- The company must complete annual financial audits and profit distributions.
- Corporate income tax must be settled.
- Submission of supporting documents, including the audited financial report, board resolution, and tax payment certificates.
Royalties and Licensing Fees
- Requirements:
- A licensing or technical service agreement.
- Tax clearance or proof of withholding tax payment.
- SAFE approval, depending on the amount.
Employee Salaries and Benefits
- Requirements:
- Work permits and contracts for foreign employees.
- Tax clearance certificates.
What is the difference between a WFOE and a Representative Office (RO)?
- A WFOE can conduct profit-generating activities, while an RO is limited to market research, liaison activities, and non-revenue-generating functions.
- ROs are easier to set up but cannot invoice or directly hire staff.