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The Main Steps to Follow for a WFOE Set Up in China in 2022

Updated: Jul 14, 2022

Are you planning to expand your company offshore in China? There are a number of investment vehicles that you can select,

oint ventures (JVs) to representative offices (RO), but WFOEs are mostly preferred by foreigners. The primary reason why investors prefer WFOEs as the investment vehicle of choice is that it allows them to have 100% shareholding in their companies.

With most of the WFOEs in China doing excellently in areas such as manufacturing and hospitality, you should also not be left behind. It is time to join this highly lucrative market. So, here are the main steps for a WFOE set up China:

What is a WFOE?

A WFOE, shortening for a wholly foreign-owned enterprise, is a privately held limited liability company in China, where all the shareholders are foreigners. Originally, this type of business structure was only allowed in the manufacturing sector, but it has now been opened to all other areas. Now, you can open three main types of WFOEs:

  • Consulting WFOEs.

  • Manufacturing WFOEs.

  • Trading WFOEs. These types of WFOEs are also referred to as a Foreign-Invested Commercial Enterprise (FICE).

The Process of a WFOE Setup in China

When forming a business in China, there are several crucial details that you need to give attention to, from the company structure to tax compliance. This process can be broken down into two main steps: the pre-license stage and the post-registration phase.

Pre-License Phase

  • Select the Preferred Company Name: The name of the company should be pre-approved by the Administration of Industry and Commerce. Check the guidelines carefully and have the name reserved for your company when presenting the documents for a WFOE set up in China.

  • Prepare the Documents for company registration: These include the company’s article of association, lease contract, feasibility study report, and the details of shareholders and directors.

  • Apply for Your WFOE Business License: This step involves submitting all the documents required for incorporation to the relevant authorities for registration. These include the Ministry of Commerce (MOFCOM) and the Administration for Industry and Commerce (AIC).

Post Registration Procedure

  • Register for Taxes: After getting your business license, the next step is registering for taxes with the State and Local Tax Bureau.

  • Register with Other Authorities: After registering for taxes, you also need to register with about 12 other authorities before the company can start operating. These include the Finance Bureau, the Technology Supervision Bureau, and the Statistical Bureau, among others.

  • Open a Bank Account: Finally, you need to open a bank account to be able to make payments and get paid. Look for a bank that can help you to raise capital quickly in case of a liquidity shortage.

Work with an Agency of Experts to Help

Looking at the process of a WFOE set up in China above, does it appear challenging? Many are those who find it a hard nut to crack because of the long list of documents that are needed. Also, it can be pretty expensive and lengthy. Well, we have a way out: working with an agency of experts.

Instead of preparing the documents and navigating from one department to another alone, why not let an expert handle the task? At Primasia, the professionals have years of experience in company registration and will ensure the process is completed fast and conveniently. This means that you can concentrate on raising more resources, carry additional market studies or other core tasks for company operations as experts work on the registration process.

Another awesome thing about Primasia is that they offer more than WFOE set up in China. You can count on them for assistance with payroll management, accounting work, and filing tax returns.

Read more on why now is the time to incorporate an offshore company in China here.


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