Formation Service:
China Wholly Owned Foreign Enterprise (WOFE)

National Flag of People’s Republic of China

Under the company law in the People’s Republic of China (PRC), Wholly Owned Foreign Enterprise (WOFE) is the business entity designated for non-PRC enterprises to establish a PRC corporate body which is wholly owned by foreign capital from its foreign investors.

The foreign investors of WOFE can realize total control over management and operation of their WOFE by in China.

AsiaBC can assist you to incorporate a WOFE, you can know more about its characteristics, statutory categorization, and requirements in below.

Characteristics

WOFE is the only allowable separate legal entity for overseas entreprises to do business in China.

It has an unique setup requirement: the WOFE must make decision on its industry and territory on registration. These settings are not adjustable in the future, and the WOFE cannot operate outside the scope and are subject to respective regulations of the industry and territorial government.

Alternatively, Representative Office is more feasible when trading and invoicing with customers and suppliers in China are not required.

Advantages:

  • A separate legal entity in China legal system from its overseas investors
  • Invoicing is allowed: It is able to make profit in the mainland China(a major difference to Representative Office).
  • Trading is allowed: Feasible to carry out business activities with transaction (although the scope of business is restricted by the type of WOFE on its registration)
  • Enjoy tax incentive from China government (negotiable)
  • Employ local staff directly

Disadvantages:

  • Complex registration procedure
  • Mandatory capital injection: Minimum amount of registered capital is required, it is industry-specific and territory-specific.
  • Bounded by its registered business scope, financing requirement, tax rates, and director board, etc.
  • Every WOFE must appoint a legal representative who bears unlimited liability of the WFOE.

WOFE Categories

Registered capital varying based on the territory of operation
Types of WOFEMinimum Registered Capital (minimum mandatory capital injection amount)
Setup in Free Trade ZoneRMB 10,000
ConsultancyRMB 100,000 – RMB 500,000
ServicingRMB 100,000 – RMB 500,000
Hi-TechnologyRMB 100,000 – RMB 500,000
Trading / FICE / RetailRMB 500,000 – RMB 1,000,000
Food & BeverageRMB 500,000 – RMB 1,000,000
Manufacturing / ProductionRMB 1,000,000 or USD 140,000

Requirements

Members:

  • One director
  • One shareholder
  • One legal representative

Information and documents:

  • Proposed Chinese name of WOFE’s name (Simplified Chinese)
  • Business license, Certificate of Incorporation, Commercial Registration of the foreign investors
  • Proposed industry and region of operation
  • Passport and/or identification certificate of the legal representative
  • Resume of the legal representative
  • Lease Agreement for the WFOE’s office, the property right certificate of the owner
  • Bank Reference Letter
  • Appointment letter from board of members of parent enterprise
  • The Article of Association of WOFE
  • Entrustment Agreement
  • Business survey of WOFE:
    • Business scope & products list
    • Business plan
    • Organizational structure
    • Number of Employee to be employed
    • Estimated the investment amount and its assignment, estimated register capital

All documents in foreign language must be translated into Chinese and certified by China Embassy.

Need help?

Setup of China WOFE is a complex procedures because of involving the state and regional authorities.

AsiaBC can assist you to establish a China WOFE, feel free to write down your questions in the contact form, we will reply to you by email or phone call by the next business day.

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