The Wholly Foreign Owned Enterprise (WFOE or WOFE) is a company wholly owned by the foreign investors. Any enterprise in China which is 100% owned by a foreign person or company can be called as WFOE. Before registering a WFOE in China, investors must know some below important issues:
1. Choosing a WFOE Company Name
Company name of a WFOE in China should be in Chinese, as the administration system all record only Chinese characters. A normal Chinese company name should be like this, for instance, Shanghai Appple Trading Co., Ltd,:
first word –location or city of company
second word- name of company
third word- activity (For example, trading, or technology, or consulting)
forth word- company structure, like limited company
The name has to be submitted to the local Administrative Bureau for Industry and Commerce (SAIC) and approved by them. As there are too many companies now, it is very easy to find the names already existing, so investors should prepare several names for alternative.
After the company name is approved by administration, then investor can apply to register WFOE by next step.
2. Registered Capital
Now China does not have special requirement for registered capital for WFOE, company can give any amount capital as long as they assure to send the money into company account within required duration of times, this is 20 year. The amount of registered capital is dependent upon factors like Scope of Business and Location.
But there is some special industry like food or beverage or others that have special registered capital requirement. From our experience, RMB 1,000,000 is a normal and safe registered capital amount for a WFOE in China.
3. Terms of WFOE
In China, WFOE business license always has validity of 20-30 years. When it expires, company can submit application for obtaining extensions of the WFOE's duration.
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.
4. Tax Issues
In China, the Corporate Income tax rate is a tax collected from companies. Its amount is based on the net income companies obtain while exercising their business activity, normally during one business year, rate is 25%. Revenues from the Corporate Tax Rate are an important source of income for the government of China. The tax rate of a company depends on the places where the company is registered and the industry that a company engaged. All enterprises are required to report to the Tax Administration Department monthly.
5. Business Scope
In China, Business scope of a business is a "one sentence description" covering all of the present and future activities of the WFOE; it is essential this encompasses every envisaged scope of future activity. The WFOE can only conduct business within its approved business scope, which ultimately appears on the business licence. One of the most important issues in WFOE application is business scope. Any amendments to the business scope require further application and approval. Business scope of a company in China is not as broad and general as in other countries. Generally business scope includes investment consulting, international economic consulting, trade information consulting, marketing and promotion consulting, corporate management consulting, technology consulting, manufacturing, etc.
上一篇：公司注册在上海哪个区比较好?
