The Wholly Foreign Owned Enterprise (WOFE) is a limited liability company wholly owned by the foreign investor(s). In China , WOFEs were originally conceived for encouraged manufacturing activities that were either export orientated or introduced advanced technology. However, with China 's entry into the WTO, these conditions were gradually abolished and the WOFE is increasingly being used for service providers such as a variety of consulting and management services, software development and trading as well.
ADVANTAGES OF WOFE
The advantages of establishing a WOFE include:
- Independence and freedom to implement the worldwide strategies of its parent company without having to consider the involvement of the Chinese partner
- Ability to formally carry on business rather than just a representative office function and capable of issuing invoices to their customers in RMB (Chinese Currency) and receive revenues in RMB
- Capable of converting RMB profits to US dollars for remittance to their parent company outside China
- Protection of intellectual know-how and technology
- Greater efficiency in its operations, management and future development
One of the most important issues covered in the project documentation is the business scope of the WOFE. Business scope is narrowly defined for all businesses in China and the WOFE can only conduct business within its approved business scope, which ultimately appears on the business license. Any amendments to the business scope require further application and approval. Inevitably, there is a negotiation with the approval authorities to approve as broad a business scope as is permitted.
General business scope usually includes, investment consulting, international economic consulting, trade information consulting, marketing and promotion consulting, corporate management consulting, technology consulting, manufacturing, etc.
REGISTERED AND PAID UP CAPITAL
For the WOFE, the minimum amount of registered capital required is RMB1,000,000 (about USD120,500), Under the Company Laws, the paid-up capital is equal to registered capital, Investors or shareholders must pay for the shares subscribed and deposit the money into a specified bank account. The amount of share capital so deposited should be audited by a firm of certified public accountants.
Our services include :
- Drafting application papers, standard articles of association, standard feasibility study, and providing samples for necessary documents such as board resolution, bank reference letter, etc
- Obtaining approval and relevant certificate by Foreign Economic and Trade Bureau
- Researching and obtaining approval for the company name of WFOE from Industrial and commercial registration office
- Obtaining approval or certificates from various authorities such as the Planning Bureau, the Foreign Economic and Trade Bureau, the Industrial and Commercial Registration Office, the Statistics Bureau, the National Taxation Administration Bureau, the Local Taxation Administration Bureau, the Public Security Department, the Environmental Protection Bureau. the foreign Exchange Administration Bureau and the Customs etc.
- Opening necessary bank accounts, obtaining a report of corporate capital verification issued by a Chinese certified public accountant (CPA). Be ready with the original copy for check-up
Please feel free to contact us for more details.