How the new China company law influence the WFOE formaiton?
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According to the new China company law, it is required to pay up the registered capital within five years after registration which most of us have been aware of this update. But there is actually another important update influence foreign investors which is no mandatory to appoint a supervisor anymore. This will affects our registration process quite a lot when you start the formation on government system.
Before the new company law, all the companies in China including WFOE need to appoint a supervisor to monitor the daily management of the company. And this person cannot be the same person as company legal person. Even there is no reuiqrement for nationality of this postion, but still it is hard for foreign invetors to find such a person acting as the company supervisor, not to mention we will need his/her signature on original registration applicaiton forms.
Before the new China company law, we will need at least two persons to start the WFEO registration. The legal person and company supervisor cannot be the same person. Even we don't need the supervisor visiting China when register the WFOE, but we indeed need his/her information such as the passport, contact address and contact number. And we do need his/her signature on registration application forms by originals which makes registration procedure quite complicated.
With new China company law, one person can format the WFOE directly which makes the procedure much easier than before. The foreign investor can act as the company shareholder as well as legal person and the company can be registered immediately with just one person. The company are wholely running and moitoring by yourself without other person involved.
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