- Company Incorporation
- Hong Kong Ltd Company
- BVI Company Registry
- UK Company Incorporation| UK Company regis
- US Company Registry|US Company Incorporati
- Japan Company incorporation|Japan company
- SG Company incorporation,Singapore company
- Macau company Incorporation|Macau company
- China Company Registration
- Shenzhen Company Registration,SZ Company I
- Offshore company registry
- Samoa Company
- Cayman Islands Company
- Anguilla Company
- Nevada Company
- Marshall company registry
- Nevis company registry
- Mauritius company registry
- Brunei company registry
- Bermuda Company registry
- Bahamas Company registry
- WFOEs|CN Company
- SHANGHAI Company Registration|SH Company R
- Seychelles Company registry
- Delaware Company Registry|US Company Incor
- Seychelles Company incorporation
- Australia company register|Australia forma
- Trademark Registration
- Accounting
- Tax Service
- Secretary Services
- Annual Return
- Patent
- Immigration Hong Kong
- Business Centre
- Financial Advisory
- Other Services
Wholly foreign owned enterprise formation in China,CN company registry
Since China still maintains foreign currency control policy, it's still advisable to choose registered capital within RMB 100,000 ~ RMB 500,000 as the minimum registered capital for Consulting WFOE, Service WFOE, Hi-Tech WFOE registration in Shanghai, Beijing, Shenzhen,Guangzhou and many other cities of China. (Investor could inject the above capital within 2 years) Information provided below will guide you to:
Wholly Foreign Owned Enterprise (WFOE)
Introduction of WFOE
The Wholly Foreign Owned Enterprise (WFOE) is a limited liability company wholly owned by the foreign investor(s). In China, WFOEs were originally conceived for encouraged manufacturing activities that were either export orientated or introduced advanced technology. However, with China's entry into the WTO, these conditions were gradually abolished and the WFOE is increasingly being used for service providers such as a variety of consulting and management services, software development and trading as well.
The registered capital of a Wholly Foreign Owned Enterprise (WFOE) should be subscribed and contributed solely by the foreign investor(s). A WFOE does not include branches established in China by foreign enterprises and other foreign economic organizations. The Chinese Laws on WFOE do not have a clear definition of the term of "branches". The term of "branches" should include both the branch companies engaged in operational activities and representative offices, which are generally not engaged in direct business activities. Therefore, branches and representative offices set up by foreign enterprises are not WFOE.
Advantages of WFOE
The advantages of establishing a WFOE include, but are not limited to:
- Independence and freedom to implement the worldwide strategies of its parent company without having to consider the involvement of the Chinese partner;
- Ability to formally carry out business rather than just function as a representative office and being able to issue invoices to customers in RMB and receive revenues in RMB;
- Capability of converting RMB profits to US dollars for remittance to its parent company outside of China;
- Protection of intellectual know-how and technology;
- Full control of human resources
- Greater efficiency in operations, management and future development.
- Investor's parent company does not have to be established for more than 2 years while for Representative Office, it's parent company is required to have been established for more than 2 years.
Business scope
One of the most important issues in WFOE application is business scope. Business scope needs to be defined and the WFOE can only conduct business within its approved business scope, which ultimately appears on the business license. Any amendments to the business scope require further application and approval. Inevitably, there is a negotiation with the approval authorities to approve as broad a business scope as is permitted. Generally business scope includes investment consulting, international economic consulting, trade information consulting, marketing and promotion consulting, corporate management consulting, technology consulting, manufacturing, etc. With China's entry into WTO, more and more business is open to WFOE especially in Trading, Wholesale and Retail business.
Registered and paid up capital
Registered Capital: USD$140,000 is a decent investment capital for many types of WFOE. (with USD$ 140,000 investment it's easy to get approved). RMB 100,000 ~ RMB 500,000 (Approx. USD$15,000- 75,000) is the advisable as minimum investment capital to be approved for Consulting WFOE, Service WFOE, Hi-Tech WFOE registration in China. After the approval, initial paid-up capital should be injected within 3 months which could be 20% of the registered capital, the balance should be remitted within 2 years.
Registered capital is the amount that its required to run the business until it can break even - the 'minimum registered capital' is a guideline only. If you do looking for a minimum registered capital, for instance RMB 30,000 (which is impossible to run a WFOE in China) this means you will run out of money pretty soon, which leads to increased costs in reapplying for permission to increase capital, additional licensing fees and renewals of business licenses and so on. The WFOE needs funding via it's registered capital until it's able to support itself from its own cash flow.
However the amount of registered capital needed is also dependent upon factors like scope of business and location. In reality, local authorities will review the feasibility study report (and check the lease contract) approve the investment on a case-by-case basis; reduced registered capital can be negotiated in some cases.
A new rule on foreign employees’ social security in effect starting October 15, 2011. It is said that if a company hires a foreign employee, the company shall register this employee with the local social security authority within 30 days of the employee receiving their work permit.
GENERAL TAX INFORMATION
Since Jan. 2008, China's new corporate tax rates range from15% to 25%. (the rate depends on the places where the company is registered and the industry that a company engaged). Please check the latest Corporate Income Tax Law of China, All enterprises are required to report to the Tax Administration Department monthly, quarterly and annually. Path To China provides part time accounting services for our clients, you are welcome to contact us for more information.
ANNUAL REPORT
Any limited companies in China should summit annual audit report to the relevant authorities. The annual audit cost is about RMB 6,000. Any company will be subject be to a fine if the Annual Audit Report is not submitted in a timely manner.
PROFIT REPATRIATION
China Government allows Foreign Invested Enterprises remit their profits out of the country and such remittances do not require the prior approval of the State Administration of Foreign Exchange (SAFE). Dividends cannot be distributed and repatriated overseas if the losses of previous years have not been covered while dividends not distributed in previous years may be distributed together with those of the current year. Repatriating the rRegistered capital to home countries is forbidden during the term of business operation.
TERMS AND TERMINATION
In China, terms of 15 to 30 years are typical for a manufacturing WFOE (although some may have a longer term). It is also possible to obtain extensions of the WFOE's duration. For projects in which the amount of investment is large, or the construction period is long and the return on investment low, projects producing sophisticated products using advanced or key technology provided by the foreign partner, or for projects producing internationally competitive products, the term of WFOE may be extended to 50 years. With special approval from the State Council, the term may be even longer than 50 years.
The WFOE may be terminated under certain conditions. For example, the inability of the WFOE to operate due to heavy losses, or in the occurrence of an event of force majeure, etc.
*Please contact us for further information,thanks!
- Tel: 852- 2503 1288 Fax: 852- 2503 3311
- Email: INFO@VANTIC.COM.HK
**********************************************************
Our other services :
- Company Registration
- Transformation of "Processing & Assembly" Companies
- Taxation service
- Accounting
- Corporate secretarial service
- China trademark registration
- Business centre,registration address
- Corporate finance
- Annual renewal
- De-registration,Cancellation of company
Hong Kong
Address : 2/F.,Western Comm. Bldg.,
31 Des Voeux Road West,Sheung Wan, H.K.
Tel: 852-2508 0288 (6 lines)
Fax: 852-2503 3311
Email: info@vantic.com.hk
Shenzhen branch
Address:Room 2009, 20/F., Jin Tian Comm.,Bldg,1199 He Ping Road,LuoHu District ,
Shenzhen , China.
Tel: 0755-8211 9411 (6 lines)
Email: info@vantic.com.hk
News & Events
Hong Kong Business Accounting | HK Company Set up | Hong Kong Company Registry | hong kong company tax | hk company secretary | trademark register
Copyright.Vantic-HK 2014. All rights reserved.