What is WOFE Registration in China? How much is WOFE Registration in China? How to register Chinese WFOE? Here is a list of all questions about WOFE Registration in China you may ask.
Definition of WOFE Registration
Wholly foreign-owned enterprise – is a common investment vehicle for foreign parties (either individuals or corporate entities) to establish a foreign-owned limited liability company in mainland China.
The unique feature of WFOE is that the involvement of a mainland Chinese investor is not required, as opposed to a joint venture establishment.
Why WOFE Registration
- Able to implement the worldwide strategies of the parent company without the complication of having a Chinese partner.
- Unlike the representative office, a WFOE is able to receive and remit RMB to the investor company overseas
- Higher operational, management control and future development efficiency
- Lower risk of IP leakage (trademarks, patents, and others)
- Simplified process of establishment and termination
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Instead of pulling your hair out to try to figure out how to properly set up a WFOE, having STAR to assist you from beginning to end will save your time tremendously.
The only document the investor needs to provide us is:
- The original passport of the WFOE investor. Or the passport notarization issued by the local Chinese embassy.
- If the WFOE is to be set up by a corporation overseas, the business license required to be notarized by the local Chinese embassy.
It is worth mentioning that if the legal representative is a natural person, having a business supervisor is the legal requirement for the WFOE registry.
One of the options for a registered address is a virtual address – instead of an actual one, certain economic parks, with the approval of the government, provide virtual addresses for corporate registration to attract investments.
The cost involved is the one-off payment for using the address and occasionally certain economic parks would request a management fee.
As the address is not an actual one, WFOE would need an actual address for contact – usually would be the office address.
Registered capital for WFOE
The new corporate law of China has modified the statutory capital system to one that combined with the subscription capital system.
The impact on a practical level for the investors is that they can now decide when to complete the capital injection, as long as it is within the term of operation (generally 20 years).
In another word, the requirement of capital injection upon the registration of WFOE no longer stands.\
Timeline for WOFE Registration
Under the usual circumstances, the registration process takes around a month.
Upon completion, the business license will be issued.
Certain additional licenses are required depending on the business scope.
For example, if exporting and importing is part of the operation, then the relevant license for exportation would be necessary.
Typically, it takes around a month to acquire. And the application could only be submitted after the WFOE has been properly established.
When can I start my business operation?
The business operation could commence once the business license is obtained, the bank account is established, and tax verification is completed.
Typically, it takes up to 2 weeks to establish a bank account. The bank account could only be established after the business license is in place as it is required by the bank.
The tax verification process is able to commence as soon as the bank account is established successfully, which could take another day to complete.
Therefore, generally, it would take 6weeks to get the business running.
When can I start the recruitment process?
The WFOE can start sponsor foreign staffs to work in China or hiring local employees upon receiving the business license.
Documents required for recruitment
- Employees’ highest academic credentials are required to be certified by the relevant state embassy.
- No criminal record (6 months). Typically, it should be issued by the police station within the local jurisdiction of their birthplaces.
- Medical check-up record
Ok, let us know if you want to start a business in China!