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WFOE Registration in China: Your Comprehensive Guide

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china business

Over the last three decades, the Chinese economy has been growing at a rapid pace, making it the ultimate jurisdiction for foreign investors. Because of its pro-business policies, most companies that go to China use it as a springboard to success.

This is why every global brand that you know of today, from Volkswagen to Dell, probably has some presence in China. So, are you looking forward to taking your company to China too? The first step is company incorporation in China.

This post takes a closer look at WFOE (wholly foreign-owned enterprise) to highlight the complete process of registering it in China. We will also demonstrate why you should work with professionals for company registration.

Advantages of Forming a WFOE in China

As the name suggests, a WFOE is a company that allows investors to hold 100% shareholding in their Chinese enterprises. This category of company is the most preferred form of business in China, and it comes with the following benefits:

  • Unrestricted operations in China.

  • The profit made by the company can be remitted from China freely.

  • Very effective in intellectual property rights.

  • You have the autonomy over who to hire.

  • No sharing of profits.

How to Register a WFOE in China

Now that you know the benefit to anticipate from a WFOE in China, what is the process of registering it? Here are the main steps that you need to follow:

  1. Select a business name: This is the first step in the process of company registration in China and is used to help avoid conflict of interest with other already established brands. The name you choose should be unique, meaning that it should not resemble that of another enterprise or authorities in China.

  2. Prepare all the documents required for registration and apply for a license: These documents will be used in the preliminary stages of company registration in China. Some of the documents include a feasibility study report, articles of association, bank references, and resume of a legal representative based in China.

Once you have prepared all the documents, submit them to the local offices for the Ministry of Commerce (MOFCOM).

  1. Register for taxes: Upon getting the business license, the next step is registering for taxes with the local tax bureaus. At this step, you also need to get the company chop from the public security bureau (PSB).

  2. Register the business with other authorities: In addition to registering the company for taxes, and depending on the nature of the enterprise, you might also need to register with the following authorities.

  • State administration and foreign exchange.

  • The technology supervision board.

  • Statistical bureau.

  1. Open a bank account: This process will not be complete until you get a bank account for the company. This is an important component because in addition to helping you pay/get paid; it will come in handy during audits and filing taxes at the end of every financial year.

As you can see, a WFOE company is the best business formation for investors targeting China. It makes it easy to run a company and there is no sharing of profits with partners.

However, the process of registering a WFOE is complex, tiresome, and expensive, especially if you opt to do it alone.

This is why you should work with a firm of experts to make the process easy and convenient. Having helped other enterprises join the Chinese economy, these professionals can also hold your hand and make registering a company in China faster and cheaper. They will also hold your hand to help with the formation of good policies for success.


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