China WFOE Company Set Up Services

China Wholly Foreign-Owned Enterprise (WFOE) Company Formation Services

WFOEs are legal entities in China that are 100% funded by foreign investors. The most effective approach for a foreign company wishing to do business in China is to first incorporate in Hong Kong and then establish a WFOE in Mainland China. A WFOE can provide foreign investors with complete autonomy as well as increased protection of their intellectual property in accordance with international law.

By providing investors with complete domestic retail and wholesale distribution rights, WFOEs remove the operational risk that arise from having a Chinese partner in many industry sectors. As a consequence, WFOEs are the most popular type of FIE currently used by international investors.

In addition to conducting sales, marketing, consulting, trading, warehousing, manufacturing and delivery services in China, a WFOE can also issue official invoices and sign commercial contracts.

A WFOE is only allowed to operate within the business scope specified in its business license. If a WFOE decides to pursue activities other than the ones included in its scope of business, it must first gain approval from the relevant authorities, a process which is neither automatic nor simple. Acadia has years of experience handling the procedures for such approvals.

WFOE Establishment Steps

Average Set-up time 2 – 3 months

Employment Restriction
May enter employment contracts with employees directly or through third party HR service providers

Mandatory Named Position

• Only the Chinese name will be legally binding; the English name is not legally relevant for Chinese authorities
• The word “China” may not be freely included in the Chinese name
• Normally the composition of the company name will be “Name + Business Nature (i.e. Trading) + City + Limited Company”

Registered Capital

• No minimum registered capital required and it will not be shown on business license
• No minimum cash required for capital injection but capital registered should still be injected accordingly
• Contribution of registered capital can be in four forms: capitals, cash, IP rights and land use rights
• No deadline on capital injection, but it should be injected within a maximum of 30 years, in practice, we recommend within 10 years
• Note that the capital to be registered should still be reasonable and indicative of the WFOE’s nature

Corporate Governance

• Board of Directors (at least 3) or 1 Executive Director
• 1 General Manager
• 1 Legal Representative acting as liaison between the WFOE and the P.R.C. authorities (may undertake other roles concurrently except that of Supervisor)
• 1 Supervisor to ensure legal compliance (may not undertake other roles)