Wholly Owned Foreign Enterprise in China (WFOE China): Set Up & Serviced

In China, establishing a wholly foreign owned enterprise is one of the smartest ways for overseas investors to really own the mainland market. With a WFOE structure, you can have 100% foreign ownership and full control over your operations, and get direct access to China’s domestic market without needing some other local partner to sign off on things.

For too many foreign companies trying to make it in China, a WFOE is the only way to go – it lets you set things up the way you want, protect your brand and keep to international standards. At Primasia, our team in Shanghai, Beijing and Guangzhou are on hand to handle anything you need, whether that’s getting set up, getting a license, dealing with tax, HR or just making sure you’re all good with Chinese compliance.

If you’re thinking of setting up a WFOE in China, our people will guide you from start to finish – we’ll help you figure out whether it’s the right idea, and get you launched and up and running in no time.

Wholly Owned Foreign Enterprise in China (WFOE China)
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What is a Wholly Owned Foreign Enterprise in China (WFOE)?

A wholly foreign owned enterprise in China is also known as a WFOE China entity – it’s a Limited Liability Company that some foreign investors own in full. Sometimes you’ll see it written as WOFE in China, WOFE China, or even China WOFE – but the actual concept itself doesn’t change.

A WFOE in China is totally a separate legal entity in Chinese law, which is great news for overseas investors. A WFOE lets you:

  • Run profit making operations in mainland China
  • Get official invoices called fapiao
  • Hire local and foreign staff, without needing some middleman
  • Take RMB profits and convert them into foreign currency to send back home
  • Really protect your intellectual property and have control over your operations

A Chinese WFOE is probably the best option for businesses that are looking for a long term presence in China and want full ownership of their operations, rather than just working through distributors or rep offices.

What is a Wholly Owned Foreign Enterprise in China (WFOE China), Exactly?

Why Go with a Wholly Foreign Owned Enterprise in China for Your Foreign Business in China?

When you’re looking to crack the mainland market, it’s hard to ignore the options for a rep office, joint venture, or wholly owned subsidiary right here in China. And in most commercial sectors a wholly foreign owned enterprise in China is really the best way to get the independence and commercial flexibility you need.
Some of the key advantages of choosing a Chinese wholly owned foreign enterprise are:
  • 100 percent foreign control over the show – that means 100 percent of the profits go straight to you
  • Direct control over the management and operations means you get to call all the shots
  • Stronger brand positioning for your foreign business in China – you can set yourself up as a local player with real local clout
  • You can trade, manufacture or offer services (subject to getting the right licenses) – of course the scope will vary depending on what you want to do
For companies that are serious about getting a real foothold in the market, a WFOE is usually the most robust long term structure.
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Why Choose Primasia for Setting Up Your WFOE in China?

Weve been around for over three decades providing corporate services, and our experience of supporting clients in mainland China goes back over 20 years. So you can be sure to get practical, commercially focused advice that actually makes a difference.

We support you with a full range of corporate services for expanding into Hong Kong and China:

  • Initial feasibility and structuring advice to get you on the right path
  • Complete China WFOE set up execution – weve got your back
  • Post incorporation compliance to keep you in line
  • Cross border structuring with Hong Kong entities to help you make the most of your operations
  • HR, payroll and tax coordination to take some of the load off

Whether you call it a WOFE in China, WOFE China, China WOFE, or WFOE China we make sure your wholly foreign owned enterprise in China is set up right, compliant with all the local regulations, and aligned with your long term expansion plans.

China Foreign Owned Enterprise WFOE: The Registration Process

Getting a WFOE up and running involves sorting out a few different government departments, unfortunately – but don’t worry, we’ll guide you through it. Setting up a China Foreign Owned Enterprise WFOE will usually involve:

  • Getting your company name approved
  • Applying for a business license
  • Registering your company chops
  • Tax registration – and getting the tax bureau to file your papers
  • Foreign exchange registration
  • Opening a bank account
  • Getting your social insurance and housing fund in place

We’re also happy to help clients who are expanding from Hong Kong or overseas get their WFOE setup sorted – so you can get on with business in China with minimum fuss.

Foreign Owned Enterprise WFOE China Cost and Timeline: What You Need to Know

The cost of setting up a Foreign Owned Enterprise in China will depend on a few things:

  • Where you’re setting up shop
  • The kind of business you’re in
  • The amount of capital you’re committing
  • Rent for your office space
  • Licensing requirements

And of course on top of any government fees, you’ll need to budget for professional advisory support, accounting setup, tax registration, and ongoing compliance services.

It will take a few weeks or a few months to get a WFOE up and running – depending on how complicated things get and how quickly the authorities process your applications.

We’re happy to provide a clear fee proposal up front, so you know exactly what you’re getting yourself into when you decide to go ahead with WFOE registration in China.

Comparing WFOE China with Other Structures: Weighing Up the Options

Some investors wonder whether a Chinese WFOE or a joint venture might be a better fit – while joint ventures might be needed in restricted sectors, most open industries let you get away with a wholly foreign owned enterprise in China.

Compared to rep offices, a WFOE in China can:

  • Generate revenue of its own
  • Sign contracts in its own name
  • Issue tax invoices
  • Employ staff without needing any third party arrangements

For serious players in the market, a wholly foreign owned enterprise in China is still usually the best way to go for operational control and scalability.

Wholly Owned Foreign Owned Enterprise WFOE in China: Requirements The Overview

If you’re thinking of setting up a WFOE you really need to understand the WFOE in China requirements first – and these can vary depending on where you’re setting up shop and what sort of business you’re in. Generally speaking, though, you’ll need to get the following sorted:

  1. Business Scope Approval – you need to get local authorities to sign off on your business plan
  2. Registered Capital Commitment – whatever your proposed capital requirements happen to be
  3. A Registered Office Address – you’ll need to rent a commercial space
  4. Legal Representatives and Supervisors – and you’ll need to make sure you get the right people in post
  5. Industry-Specific Licenses – some businesses need extra permits before or after incorporation of a Chinese company

We make sure all the WFOE registration in China documentation we put together is accurate and gets to the right people, so you don’t have to worry about delays.

Keeping Your Chinese Wholly Foreign Owned Enterprise on the Right Side of the Law

Once youve got your China WFOE registration sorted, ongoing compliance is a must. Your Chinese WFOE needs to stay on top of:

  • Monthly and quarterly tax filings
  • Annual audits
  • Annual reports to send in to the relevant authorities
  • Bookkeeping under Chinese accounting standards
  • HR and payroll compliance

At Primasia can help out your foreign companies in China with integrated accounting, tax, payroll, and company secretarial coordination to keep you out of trouble throughout the operational lifecycle of your business.

Get in Touch with Our China Corporate Services Team

If youre planning on setting up a WFOE in China or expanding your foreign business in China, then get in touch with Primasia today. We will get to know your objectives and guide you through the whole process to setting up your wholly owned subsidiary in China.

And the key to getting into the mainland market is getting the right structure in place. If you dont do that, you can kiss goodbye to any chance of success. But with a properly formed wholly foreign owned enterprise in China? Well thats a different story altogether.

Teresa e1569498031362

Teresa Tam

Executive Director

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Opening the door to Wholly Owned Foreign Enterprises (WFOE)

Contact our dedicated team today – we are here to educate, create a long-term relationship, and to ensure you get this done first time and for the long-haul!

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Wholly Foreign Owned Enterprise in China (WFOE China) FAQs

A wholly foreign owned enterprise in China – or WFOE China for short – is a limited liability company thats 100% owned by one or more foreign investors. Thats why you might also see it referred to as a WOFE in China, Chinese WFOE, WFOE China – its all the same thing. And one of the good things about this structure is that overseas shareholders can operate a business in mainland China without having to bring in a local joint venture partner.

Its a separate legal entity under Chinese law, and it can conduct profit making activities – but only within its approved business scope.

Now the time it takes to get your China WFOE registration sorted out can vary. Thats because its different from city to city, industry to industry, and business scope to business scope. But as a rough guide, a standard WFOE registration in China can take anything from a few weeks to a few months. The process itself includes name approval, business licence issuance, tax registration, foreign exchange registration, and bank account opening. And if you need any industry specific licences, that can delay things a bit.

So you’ve got your eye on setting up a WOFE in China? Then here are the core WFOE in China requirements you need to consider:

  • They have to approve your company name
  • You need to define your business scope
  • You need to commit to the registered capital level
  • You need to get a valid commercial office lease sorted
  • You need to have a legal representative and directors in place
  • And of course you need to submit the shareholder documentation

And you might need some additional permits depending on what sort of business you want to run.

So you’re wondering how much setting up a WOFE in China is going to cost you? The thing is, its all dependant on a few factors – the location of incorporation, the industry and licensing requirements, the registered capital level, the office rental – its a long list I know. And dont forget youll need to budget for accounting, tax filings, payroll setup, and all the rest of it for your wholly foreign owned enterprise China structure.

Now in most open sectors, foreign companies in China can set up a wholly owned subsidiary in China through a wholly owned foreign entity China structure. This is most commonly known as a Chinese wholly owned foreign enterprise or WFOE in China.

But there are some industries that are still restricted or subject to special approvals. So if youre not sure, its best to get some regulatory advice first.

A Chinese WFOE can conduct all sorts of business activities – the key thing is that they have to fall within its approved business scope. So thats things like:

  • Trading and import export
  • Consulting and professional services
  • Technology development
  • Manufacturing – the list goes on
  • E commerce operations

Now if youre planning on running a business that can generate some real revenue, then setting up a WFOE in China is probably the way to go. Thats because a wholly foreign owned enterprise in China can actually trade, hire its own staff, and make some real profits – unlike a representative office which cant do any of those things.

There are no real legal differences between them. WFOE China, WOFE China, WOFE in China, China WOFE: its all just a matter of spelling variations referring to the same business entity: a wholly foreign owned enterprise in China.
So all these terms essentially describe the same thing: a company where all the shares are owned by foreign investors – and this is exactly how it has to be under Chinese company law.

Once you’ve completed all the paperwork for your China WFOE registration, you’ll be committing to a whole range of ongoing chores like

  • monthly or quarterly tax returns
  • an annual report on how your business is doing
  • keeping all your company finances on file according to Chinese accounting rules
  • and that means audits in some cases
  • and also dealing with all the regulations around employment and social insurance in china

Keeping on top of all this paperwork is a big deal and is crucial to keep your wholly foreign owned enterprise in China in good shape – and to give you the best chance of getting on with business and eventually taking any profits out of the country.