Setting up a Business in China? You may want to consider a WFOE

A Wholly Foreign-Owned Enterprise (WFOE, sometimes incorrectly WOFE) is an incorporated foreign-owned limited liability company in China. A WFOE could be an essential first step in starting your business with China, for the purposes of raising invoices, paying suppliers, having a Chinese bank account, employing local staff and indeed credibility in the market.

Two main options for building a business in China include,

1) Start a company with a Chinese partner who will own more than 50% of the company (there are obvious disadvantages here)
2) Start a WFOE – You own this company 100%

There are various types of WFOE:

• Manufacturing WFOE.
• Consultancy (or Service) WFOE.
• Foreign Invested Commercial Enterprise (FICE) – Investment WFOE

Advantages of WFOE

The advantages a WFOE include –

• Independence and freedom to totally control the company without having to consider the requirements of a Chinese partner;
• Conduct business as opposed to being simply a representative office
• issue invoices to customers in RMB and receive payment in RMB;
• Capability of converting RMB profits to other foreign currencies for remittance to the parent company in the west;
• Legal common law protection of China Law;
• Employ Chinese staff
• Greater credibility for working with government and private sector Chinese companies.

With the recent visit of President Xi to the UK, China UK is proud to say we offer can offer assistance creating WFOEs for companies wishing to enter the Chinese market.

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