As its name suggests, a wholly foreign owned enterprise, also known as a WFOE or WOFE, is a limited liability Chinese company which is invested into with 100% foreign capital and owned by only foreigners.
This company behaves in the same way as any other Chinese company, in that it can trade freely in China, make revenue in CNY, invoice (produce fapiaos) in CNY, can transfer profits back abroad, and can export goods.
Typically a Chinese WFOE will be a subsidiary of a foreign company which is based abroad, but although a Chinese representative of this foreign company, it still operates as a standalone entity within China.
A Wholly Foreign Owned Enterprise offers:
Capital investment was traditionally required to demonstrate that the WFOE, or WOFE as it is often called, would not run out of money before being able to break even.
In recent amendments to the foreign investment laws, perhaps in a bid to spur more investment by lowering the barrier to entry for foreign firms, the government has since removed the minimum capital investment requirement when incorporating a WFOE in the country.
Companies can now determine how much capital will be required to maintain their operations and must simply ensure that they meet those targets within a period of 30 years. The amount that you commit to will vary depending on the business that you're doing. While it may be more flexible, please note that you will need to commit to registering an appropriate amount of capital upon forming the WFOE (for instance, a factory will require more than a trading company).
First we will describe the documents needed. Once we have these you can leave the process to L&A
So you can understand what we do on your behalf, we will also describe the different steps that we take in order to finally open your WFOE, and you can download a thorough WFOE checklist as a guide you can keep.
Gathering the documentary evidence needed to apply for a WFOE is difficult and time-consuming. L&A will guide you through this every step of the way.
We will require, roughly, the following documents from you in order to open a WFOE (updated May 2020):
The speed with which the process happens is dependent on 2 things:
When cooperating with us, here are the tasks that we undertake to make sure that your WFOE is opened quickly, correctly, and legally.
The following is included when opening a WFOE:
Following the successful application, we will return all of the documents and seal to you and then your China WFOE will be open for business. After establishment of the WFOE, all of the above tasks not yet undertaken must be completed within 30 days, and we always endeavour to complete them well before that time.
