China Company Registration Services
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The Wholly Foreign Owned Enterprise (WFOE or WOFE) is a Limited liability company wholly owned by the foreign investor(s). In China, WFOEs were originally conceived for encouraged manufacturing activities that were either export orientated or introduced advanced technology. However, after China's entried into the WTO, these conditions were gradually abolished and the WFOE is increasingly being used for service providers such as a variety of consulting and management services, software development and trading as well. With that, any enterprise in China which is 100% owned by a foreign company or companies can be called as WFOE.
WFOE has great potential in China as companies seek new markets, executives say that by 2014 China will be the world’s top investment destination.The registered capital of a Wholly Foreign Owned Enterprise (WFOE) should be subscribed and contributed solely by foreign investor(s). A WFOE does not include branches established in China by foreign enterprises and other foreign economic organizations. The Chinese Laws on WFOE do not have a clear definition of the term of "branches". The term of "branches" should include both the branch companies engaged in operational activities and representative offices, which are generally not engaged in direct business activities. Therefore, branches and representative offices set up by foreign enterprises are not WFOE.
China WFOE formation-Different Types of WFOE
1) If the WFOE only be allowed to manufacture here. We can say it's manufacturing WFOE.
2) If the WFOE is allowed to do Consulting & Service, we call them Consulting WFOE.
3) If the WFOE is allowed to do Trading, Wholesale, Retail or Franchise in China, we call them Trading WFOE or FICE (Foreign-Invested Commercial Enterprise)
China WFOE formation-Advantages of WFOE
1).The advantages of incorporation a WFOE, compared with other types of enterprises, include, but not limited to: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 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;
3).Capability of converting RMB profits to US dollars for remittance to its parent company outside of China;
4).Protection of intellectual know-how and technology;
5).For Manufacturing WFOE, no special requirements for Import / Export license for its own products;
6).Full control of human resources
7).Greater efficiency in operations, management and future development.
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For further queries, please do not hesitate to contact ATAHK at anytime, anywhere by simply calling China hotline at 86-755-82148419, or emailing to susiehu@citilinkia.com.