How To Set Up A WFOE In China: Steps To Follow

How To Set Up A WFOE In China: Steps To Follow
by John Carlucci - September 9, 2022

While talking about China, one thing that comes to mind first is the growth of China.

Where? Everywhere!

There are enormous opportunities involved in every operation of this country. The growth aspect of China is so high after 1995 that you cannot even call it a developing country anymore. Obviously, doing business in China will be exciting for you.

But you need to know that as an already developed country, China opened its market to the world to make it a business hub. Famous companies from all over the world have already developed their business in this country, and they are successful enough to threaten your future in the country.

It does not matter from which country you are coming to do business in China; you will have to follow the strict rules and consequences of China in particular. Besides, China is by far the biggest e-commerce market in the world.

Don't worry! We are here to resolve your confusion.

What Is WFOE

Wholly Foreign-Owned Enterprise (WFOE) is a wholly foreign-owned limited liability company that does not include any Chinese investors in their whole business process. When you are thinking about doing business in China, you are open to accepting the facilities of WFOE.

It is a big opportunity for your company to work as a WFOE in China as you will get the full autonomy of dealing with your own business, and you will have full control of your business. WFOE has various categories-

●       Consulting WFOE

●       Trading WFOE

●       Manufacturing WFOE

Whether you want to trade locally or want to manufacture products inside the country, you will need to follow their specific regulations and certification process to establish your business.

Now we understand the basics of WFOE. It is time to focus on the useful steps of setting up a WFOE in China.

Steps To Set Up Your WFOE In China

As a business passion or an entrepreneur, you are not too naive to understand that setting up a foreign business needs proper planning and execution. Whatever country you are choosing to do business with, you need to have more than a basic sense of the processes and procedures.

1. Name Approval

Thinking about doing business in China! Well, Select a Chinese name first. You need to have an official Chinese business name that follows the specific rules of the country.

If you are in the Chinese market, the key process to be effective is to follow their rules strictly. There are a few criteria that you need to include in your company name-

●       Brand name

●       Administrative region name of incorporation

●       Industry or business

●       And then ‘Company Limited.’

Including these criteria will allow you to be safe and positive while establishing a business in China.

2. Prepare Legal Documents

Have you found the place where you want to establish your business? It might differ during the establishment of your business on the forefield, but before then, you need to have a general idea of where you are going to set up your office.

Various cities in China have different regulations, and if you do not follow those, you will not get the chance to form your business. In that case, you need to prepare legal documents for your business there.

For company registration purposes, you will also need to show a lease contract with the legal documents. A feasibility report with appropriate legal purposes for the bank reference letter is a must to show.

3. Acquire Wfoe Business License

The Ministry of Commerce and the Administration for Industry and Commerce come into the field to speculate and work for you. After you prepare your legal documents, you need to simply apply for a business license in China.

The rest is in the hands of their administration. If you have prepared your legal documents properly, you will get the chance to generate your business license in China.

4. Register For Taxes

Now comes the post-license procedures.

After you get your business license in China, you will have to register for the taxes at the State and Local Tax Bureau. They will calculate and regulate your taxes depending on the documents provided by you.

In this step, one thing you must remember is that China only accepts official documents that have your company stamp. Whereas in the rest of the world, your signature will be enough, China doesn't allow such a process.

5. Open A Native Bank Account

Now is the time for you to officially establish your business inside the country. But if you do not have a native bank account, how will you transact for your business purposes?

In that case, don't forget to open a native bank account in China. Besides, you will need to have a foreign currency bank account so that you can verify your invested capital properly.

To Conclude

Have you understood all the processes clearly?

Well, after the pandemic, the tax regulations in China gave some relief to the WFOEs.

So, what are you thinking about? Is it not a chance for you to grab the best market in the world? Think about the population and the infrastructure of the country and then dive into it.


  • John has worked alongside Real Estate Giants across USA and Canada for decades. Since he started Prudentialcal, he has been actively rendering service as business adviser to many companies in the real estate industry. He formed Prudentialcal in hopes of providing the most reliable stories and information there is in the vast industry of real estate

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