Setting up a wfoe in China : A COMPREHENSIVE GUIDE TO WFOE China
There are a few methods foreign investors can establish a business in China. Following are the form of legal entities for China company registry for foreign nationals. Wholly Owned Foreign Enterprise or WOFE China is the most used nowadays. These considerations for investors looking for setting up a wfoe in China are widening the scope of investment, advantageous, and speeding up the application process.
The following steps offer a guideline of the establishment process.
In China company formation and company registry in China, the primary step for any investor is to decide on an appropriate brand name for the market. The Controls on Registration and management of enterprises name governing this. Furthermore, additional guidelines restrict the content of names, forbidding the use of content that hinders fair competition, either mislead consumers or damages or contradict national unity.
LEASE OF OFFICE SPACE
The business name often contains the city of registration. As a result of this, there is a need for careful consideration before engaging an estate agent. Most cases, the city name can affect sales, operations, business development, and governmental relations. If the intended facility space is not owned by the investor, it needs to be leased for legal operation in China. Hence a copy of a Certificate of Premise Ownership (CPO) needs to be submitted to the local AIC.
ENVIRONMENT IMPACT ASSESSMENT (EIA)
This is mostly for manufacturing WFOE China. The EIA is set up to control the impact of any potential manufacturing enterprise on the environment. They are classified as significant, moderate, or small impact on the environment. This impact determines if an evaluation statement is required in the report. Any evaluation must be carried out by a certificate institution by environmental protection department of the State Council.
MOFCOM APPROVAL OR RECORD-FILING
This application goes through a simplified record-filing process, recently advertised by MOFCOM in the Provisional Measures for the New Filing System.
FIVE-IN-ONE BUSINESS LICENSE
Application and Registration for a business license can be made to the local AIC within 30 days of receipt, after being approved and certified by MOFCOM. This has replaced the previous three-in-one license.
In China, there is an instituted legal authority over the signature of any legal representative. Hence, all companies operating in China are required to have an official seal that bears the official company name in Chinese. This seal can be obtained from the local Public Security Bureau (PSB) after successful registration with the AIC.
OPENING OF FOREIGN EXCHANGE AND RMB BANK ACCOUNT
Setting up a wfoe in China must have a minimum of two banks accounts: foreign currency capital contribution account and RMB basic account. The RMB is required for a WFOE’s daily business operations in China. A WFOE China’s financial and legal chops are usually required to verify the authenticity of any business signature when opening a bank account in China.
IMPORT AND EXPORT REGISTRATION PROCEDURES
This is majorly for a trading WFOE China to conduct distribution activities for import/export trading. It’s important to note that a customs registration certificate must be obtained. Furthermore, an import-export license for exchanging foreign currencies to RMB is also essential.
GENERAL VAT TAXPAYER RELATED PROCEDURES
In China, taxpayers are in two categories especially when it comes to VAT: general taxpayers and small-scale taxpayers. To qualify for a general taxpayer status, proper documentation must be done with the local tax bureau for confirmation.
Setting up a WFOE in China with no experience can be frustrating. The scope is crucial when you establish WFOE China and that why you need a local service provider like us–China sourcing agent–China SourceLink– to help register your business. We are more familiar with the laws and regulations – both relevant and small details. We know the general scope, so you’re less likely to face any problems. Even if you make any mistakes, we will fix them before sending your applications. Contact us today!