WFOE(JV and Rep office) Registration

We've helped hundreds of foreign investors to establish their WFOE and other types of entities in China and provide one stop service for those overseas investors. We understand many foreign investors would like to start their new business in easy and efficient way especially for those SME (small and medium enterprise). Our registration service includes registration of representative office, Wholly Foreign Owned Enterprise (WFOE), Sino-foreign joint venture(JV) and other types of entities. Our senior consultants are very proficient in local policies who will design appropriate service plans for different clients. Our close relationship with local government departments usually help our client save time and make sure the whole process runs smoothly. We also provide services of annual inspection, address change and representative change for WFOE, JV and Rep office.

 

Foreign investors are usually trying to make a choice among the organization types of WFOE, Rep office and JV. We hope our following introduction will help you get the idea of which one is the better choice.

 

Wholly Foreign Owned Enterprise (WFOE)

 

 China government is now encouraging foreign investors to set up WFOE which is the main type of entities for foreign investors. Especially in Ningbo, 100,000RMB registered capital will be a minimum required capital for an International Trading WFOE. WFOE doesn't have to transfer the registered capital to China before the registration starts. All registered capital is allowed to be in place within 5 to 20 years after the registration. If a WFOE can be approved as a Hi-Tech company by local government it can even enjoy some special preferential policies such as tax deduction or office rental allowance. WFOE can also apply  for license of export and import after the registration.

 

The structure of a WFOE usually requires it to keep more regular staff comparing a Rep office. Although WFOE registration documents are much more than a Rep office,   we can help clients prepare most of the registration documents which will save great energy for the clients.

 

Sino- Foreign Equity Joint Ventures(JV)

 

JV mainly fits to the investor who already has  reliable Chinese partner. It will usually reduce great business risk to cooperate with a mature  Chinese partner. Foreign investor will operate and share the risk in proportion to the amount of registered capital inputted by the respective parties. Each party is accordingly jointly responsible for the profits and losses of the enterprise and the proportion of investment offered by the foreign investor should be no less than 25%. Also, due to government control, for some business activities such as railway transportation, value added service of telecommunication, banking, insurance and marketing, foreign investors still have to set up JV to start these business.

 

The feature of JV requires foreign investors to choose their Chinese partner very carefully. It is easier for the Chinese shareholder to control the JV cause it is more familiar with local market and policies even some convention.

 

China Representative Office

 

China representative office is a branch in China who represents the overseas company. Representative office is not a separate legal entity. It cannot do business directly which means it cannot sign any purchasing contract with Chinese supplier or make invoice. But with many natural advantages, representative office is the first choice for many foreign enterprises. Short registration period and no registered capital required make it possible for foreign enterprises to start their business in China in a quick and inexpensive way. Representative office can also employ Chinese staff through local HR outsourcing company like RCS.

 

Recently, China government has raised the standard and complexity of required documents for Rep office registration. Also the tax rate for Rep office has been gradually increased these years.

 

What's New ?

 

▲From April 2019, enterprise VAT rate will be reduecd from 16% to 13% which will bring great tax saving for most enterprises in China

 

Last Updated: March 2019

 

▲Chinese government has approved a new personal income tax policy which will take effect from Oct 2018. Monthly salary between

 

7000 RMB to 20000 RMB can expect to pay 50 % to 60% less income tax compared with formter tax rate.

 

Updated: September 2018

 

▲From May 2018, VAT rate for Manufacturing industry will be reduced from 17% to 16%, VAT rate for transportation industry, construction industry, basic telecommunications services and agricultural products sales will be reduced from 11% to 10%.

 

Updated: May 2018

 

▲ National Security Bureau enhances supervision on office address of WFOE in Ningbo and other foreign invested entities. Sensitive regions are not allowed for WFOE and foreign invested entities registration.

 

Updated on Nov 2017

 

▲ Ningbo Commercial bureau has speeded up the approval time for WFOE registraton and business license can be issued in one week at the soonest.

 

 

▲ Ningbo Yinzhou Distrcit Commercial bureau releasd a preferential policy that newly registered WFOE in Yinzhou enjoys allowance from local government when each year the actual arrived investment capital amount reaches 50,0000RMB. The allowance maximum each yeaer is 20000 RMB. This policy is temporarily valid for one year.

 

 

▲ From 1st October 2016, China Ministry of Commerce has changed the foreign investment approval system into filing system. It means WFOE whose industry is not restricted type or prohibited type can directly start the business registration first and then complete the filling system on website of Ministry of Commerce. This change has greatly reduce the policy risk when foreign investor plans to start a WFOE in China.

 

 

Process of Establishing  WFOE (JV) & Rep. Office

 

 

 

 

Brief procedures Of Setting up a Trading WFOE through RCS

 

 

01

Check and Register Company Name

02

Apply for Letter of Approval and  Certificate of Approval 

03

Apply for Business License [Company be officially established]

04

Make company stamps (three stamps)

05

Apply for Organization Code License

06

Register in Tax Bureau (National tax and Local tax)

07

Register Foreign Currency bank account opening approval

08

Open a Foreign Currency and RMB bank account

09

Remits capital from Overseas account and verify the arrived capital

10

11

12*

Get CPA’s Capital Verification Report 

Obtain the import/export licenses 

Free Valued Services : 1 year working visa, 1 months accounting service 

 

Documents and Information Required from Investor to Start the Registration


1、Investor's passport copy (investor is foreign natural person) or company business license copy (investor is foreign company) should be certified by the local notary public in Investor's native country first and then certified by the Chinese embassy or consulate there.

 

2、Investor's bank deposit certification is required. Sample will be provided on client's request.

 

3、Client shall provide two to three expected Chinese name of the WFOE.


4、Office lease contract and house ownership certificate copy are required(lessee should be the Chinese name of the WFOE).

 

5、WFOE must set two positions during the registration which are legal representative and supervisor.

 

6、WFOE's legal representative's ID copy (Chinese) or passport copy (Foreigner) and his or her CV are required

 

7、Legal representative should provide two 2-inch photos.

 

8、Supervisor's ID copy (Chinese) or passport copy (foreigner) is required.

 

9、 Authorization letter of authorizing us to handle the registration process and sign on related documents is required. Authorization     letter should be signed by the investor and please provide two original copies.

 

About Registered Capital

 

  1. 10、How to determine your WOFE's registered capital: Registered capital is the start-up capital for a newly opened company-company runs with this capital until it can gain profit.  From 2014 March China government has cancelled the concept of " minimum registered capital" which is a guideline before.

We suggest our client decide the amount of registered capital according its own business type and company size. If the intended registered capital seems inadequate local authorities will review all the registration documents and make the approval on a case-by-case basis.

About Business Scope

11、To start the registration company business scope shall be determined and it helps to define WOFE's main business type and       products or service engaged.

 

About TAX

12、The main tax for a purely international trading WFOE is corporate net income (net profit) tax which is 25% of WFOE's quarterly net profit. It is practically acceptable to tax authority that a newly registered WFOE has not net profit in the first one or two years  while years of continuously deficit may cause interpellation from tax authority.

 

About Company Chinese name and English Name

 

12、There will only be Chinese in all registration licenses and certificates. English name will be required during import and export       rights application and bank account opening. English name must be in accordance with the Chinese name. It must be translated       according to the meaning or pronunciation.


Other Information

 

13、We will help to make all of the registration documents except documents which have to be provided by the investor directly such       as embassy certification and bank letter.

 

14、The whole company registration process will take one and half months to 2 months after we receive necessary documents and       information from investors.

 

15、Export and import license application can be started after registered capital arrives.

 

Follow-Up Work

 

16、After the registration process is completed, it's very necessary for the investor to be informed of and prepare for the following      issues:

 

     i. Newly registered company will have to go to the tax bureau to fix tax declaration details within one month after the tax        registration.

     ii. Before fixing the tax details, company shall open its primary bank account and account for receiving registered capital. (The        original passport of the WFOE's legal representative shall be presented during the opening of company's bank account).

     iii. Company will have to establish formal financial system and report its financial status to the tax bureau regularly and pay tax        accordingly.

     iv. Company must keep a professional accountant to handle the above mention matters. Accountant can be a full-time one orpart-time one.

 

We will appoint an experienced accountant who helps client to handle the above mentioned duties which is our financial outsourcing service.

 

Newly registered company will have to do the certification of registered capital as soon as possible after investor transfer the first time investment capital to WFOE's capital account (before that, WFOE will have no fund to support its daily operation cost.) We will help to arrange the process of certification of registered capital as soon as client's bank account is ready.

 

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