Foreign Invested Company, as known as WOFE, means Wholly Owned Foreign Enterprise. It refers to the company established according to China laws, which invested by wholly foreign investors (including Hong Kong, Macao and Taiwan). The investors of a WOFE could be a foreign company, economic organization or individual person. WOFE is registered in Mainland China according to China laws and rules, it is an independent economic entity with independent operation, and independent accounting and independent bear legal responsibility. WOFE is a limited company but not a branch company, its shareholders shall be responsible for the company to the extent of the capital contributions they have paid.
All China companies have clear business scope, and must operate their business based on approved business scope. Basically the business scope will decide the WOFE type, requirement, procedure and lead time. So if you want to setup your company in China, please self-evaluate what business you’d like to do firstly.
According to different business scope, WOFE could be divided into different types:
1. Trade WOFE
Trade WOFE is for import and export of some goods, which need to apply for VAT tax payer certificate, finally has right to issue VAT invoice.
2. Consulting WOFE
Consulting WOFE is a service company only, could operate different consulting service and management service.
3. Technology WOFE
Technology WOFE is a technical service company, including development and research of some technology in a fixed field, product design and related technical service.
4. Food and Beverage WOFE
Food and Beverage WOFE includes many detailed types, such as restaurant, snack bar, coffee shop, drink shop, bar etc. So if you have plan to setup a Food and Beverage WOFE, please confirm your main products firstly, your physical shop choice is always affected by your main products, not all the shop size and location could meet government’s requirement.
5. Manufactory or Factory WOFE
If you need make second processing, machining or mass production by your own company, then you need to setup a Manufactory or Factory. The requirement for factory location will be different based on your actual processes.
No Matter what WOFE type finally you need, below 4 factors are very important for your pre-consideration.
If the investor is an individual investor, then his/her original passport need to be checked by different government departments.
If the investor is an overseas company, it’s official business licenses including articles of association need to be authenticated by China embassy or consulate stationed in that country.
2. Business scope
Please consider what business you’d like to do now and what’s your 5 years plan, then we will help evaluate and make perfect business scope for you. Anyway it need follow “Catalogue of Encouraged Foreign Investment Industries” released by the State Council.
3. Registered Capital According to newly-amended company law released in Mar 2014, your registered capital is allowed to be contributed within 10~30 years after WOFE business license released. So you may just consider it what amount is better for your business development, we will share with you our experience later.
4. Registered address
You have two options for registered address. Option one is to rent physical office or shop directly as registered address, then all the licenses will be indicated with this address, all information matched. Option two is to use virtual address for company registration. The key benefit is you can rent or change your physical office flexible in the future, and possible get tax refund from the office provider we found for you.