WFOE formation procedures have been remodelled by China. The effects are two-fold. In one hand it makes few things easier in some ways, on the other hand, it has converted few things bit more difficult. 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 encouraging manufacturing activities.
Because WFOE is relatively new, Western companies make a huge number of queries to understand the in-and-outs of this entire WFOE formation procedures from our China lawyers. What our China attorneys do for our clients is to offer them a complete understanding of the spanking new China WFOE and proper measures that could be taken to get the full advantage of WFOE formations procedures.
I had received an email from one of my firm’s China attorneys about the queries made by a client for whom we are working on setting up a China WFOE. I have furnished a complete guideline on what procedure to follow in order to form a WFOE under the new WFOE formation rules. This guideline may prove highly beneficial to the business owners who are looking to form a China Wholly Foreign Owned Enterprise (WFOE).
PRC government has drafted a new foreign investment law. It has also brought in new set of laws and regulations for registering WFOEs in China. For acclimatizing with this new system, local government has been working out their internal procedures.
The local AIC has finally made their basic decisions on the procedure they will follow for the formation of a WFOE under the Foreign Invested Enterprises (FIE) law and associated Ministry of Commerce (MOFCOM) regulations.
The following steps mentioned in the application need to be followed
1. WFOE name approval
2. MOFCOM online registration.
3. Application to form WFOE submitted to local Administration if Industry and Commerce (AIC).
4. Issuance of business license by AIC.
5. Start of business processes includes:
- Open bank accounts
- Cut and register chops
- Open tax and other government accounts
- Set up daily bookkeeping and reporting to the local government
- Execute written employment agreements with employees and open employee tax/social benefit accounts
We will assist you to successfully accomplish each and every step in a proper way. Our team will work with you on Steps 1 to 4 mentioned in the application and in case of Step 5. we will work with you on drafting your employment agreements for China and your employer rules and regulations. For other requirements that need to be fulfilled in Step 5, we can swiftly guide you through and make you eligible to conduct business in China.
You need to furnish the following information in Step 5 (mentioned above):
- Local bank
- Local bookkeeper
- Accountant for tax returns and annual audit and reporting to the parent entity (can be same as B, or different)
- Employee payment processing and maintenance of employee social benefit accounts
During the formation process, you must submit all this information. We would be able to offer you reliable service support.
You can contact me for detailed information on WFOE.