China WOFE
A Wholly-Owned Foreign Enterprise (WOFE) is a business entity formed in China entirely with foreign capital and is under full foreign control and ownership. A China WOFE is set up as limited liability entity and represents separate legal persons and is taxed according to local legislation. The following information will help you determine whether a China WOFE is the optimum corporate solution for your business. |
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Advantages of a China WOFE |
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| 1. | A China WOFE can be 100% foreign owned. |
| 2. | A China WOFE is simpler to establish and withdraw from than a joint venture company, since it does not involve local Chinese shareholding. |
| 3. | A China WOFE requires only one shareholder, who can be any nationality. However, the shareholder must not be resident in China. Corporate shareholders are permitted for a China WOFE. |
| 4. | A China WOFE requires only one director (unless the investor sets up a Board of Directors, in which case the minimum number of directors is three). A director can be any nationality and can be resident anywhere except China. However, corporate directors are not permitted for a China WOFE. |
Disadvantages of a China WOFE |
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| 1. | A substantial initial capital is required with China company formation. A China WOFE and FICE must inject 20% of the paid-up capital into a corporate bank account within 3 months of incorporation. The 80% balance is injected into the account in installments within two years of incorporation. There is a minimum registered capital amount required which is dependant on the nature of the WOFE business. It can range from RMB100,000 to RMB1 million (US$ 14,600 to US$146,000). |
| 2. | A China WOFE must appoint a legal representative, who must either be i) chairman of the board of directors or ii) the managing director or iii) general manager. Furthermore, a China WOFE requires local, resident company secretary and a registered office. |
| 3. | A China WOFE must prepare audited accounts as per Chinese accounting standards. It must also submit a copy of audited financial statements to the tax office in the city of incorporation. A China WOFE is required to disclose details of beneficial owners to the local municipal and provincial authorities. |
| 4. | A China WOFE engaged in manufacturing is typically granted a term of 15 to 30 years, although extensions are available to 50 or more years with special approval from the State Council. These extensions are usually granted for:
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Healy Consultants' fees to set up a China WOFE |
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Our fees to set up a China WOFE amount to US$9,250. |
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Other Information on China WOFE formation |
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Contact Us |
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For more information on our China WOFE services, email email@healyconsultants.com or call us in Singapore at (+65) 6735 0120. |
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Back to China Company Formation page. |
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Buy the China chapter of Healy Consultants' Asia Business Set Up book for US$100, to order call +65 6735 0120 or e-mail email@healyconsultants.com
