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Setting up a Wholly Foreign Owned Enterprise in China: What Do You Need?

If you are planning to expand your business to China, you are on the right path to accessing a bigger market. China has become a global business hub that investors use to catapult their businesses to multinationals. Its strategic location in the heart of the Far East, a large local market and many bilateral agreements, make it a high potential jurisdiction for rapid business development.

While the advantages of taking your business to China are not in doubt, you need to follow the right procedure to set up a company there. Although you can opt for a joint venture, it comes with some limitations because you need a Chinese partner who MUST be a majority shareholder in the business.

So, a better option is using a wholly foreign owned enterprise (WFOE), which allows you to be the sole shareholder. Here are the main steps that you need to register a WFOE in China.

Define your Chinese Company Name

Once you have decided to run an offshore business in China, the first step is getting the right name. To do this, you need to file for your official business name to ensure that it does not conflict with other businesses that are already registered.

We suggest that you look for a name that is closely related to the services or products that your brand offers.

Prepare the Company Registration Documents  (China)

In the second stage, you need to prepare the legal documents that are required for company registration in China. Some of these include the articles of association, the list of controlling partners, and the business management structure. Besides, you will need to provide a feasibility study report (FSR), bank reference letter, and lease contract for the rented office.

Apply for Business License in China

Once you have prepared all the required documents for registration, it is time to apply for a business license with local authorities.

Note that unlike other jurisdictions such as Hong Kong that require you to only deal with the companies registry, China is different. Here, you need to apply to different authorities, including the Administration for Industry and Commerce (AIC) and the Ministry of Commerce (MOFCOM).

Once you have received your business license, make sure to register for taxes at the State and local tax bureau. Further, you need to get the company chops by registering with the Public Security Bureau. Without a business chop, it will be near impossible to seal any deal in China.

Use Expert Agency for Help

When registering a company in China, the process can be lengthy, especially the preparation of the documents. Again, you have to deal with a lot of departments before your business can commence operations.

But you can simplify the process by working with an expert agency. If you pick a good agency, it will not just help you with registration, but will also help you during business establishment in China.

When you decide to take your business to China, it is a turning point that could help to lever it to success. To make the process simpler, faster, and direct, you should consider working with an expert agency that understands the Chinese market well and has ample experience in business registration.

 


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