When you decide to expand your business to China, the most important thing is selecting the right company formation and registering it. One of the most preferred business formations when registering a company in China are wholly foreign-owned enterprises (WFOEs).

WFOEs allow foreigners to fully own their enterprises, implying they are in full control of the company decisions, such as who to employ, the product design, and marketing campaigns.

To start a WFOE, the first step is registering it in China. Here is a comprehensive guide to a company registration in China.

Minimum Investment for Setting up a WFOE in China

Before 2014, China had varying equity and investment requirements for setting WFOEs. However, the updates on Company Law in 2014, the minimum registered capital requirements have been abolished as far as the business activities are not in the regulated niches, such as banking and insurance.

While the removal of the equity and investment capital requirements has been supported from far and wide, consider looking at the other related investments to understand the registered capital they used.

Them, target a having similar or more capital. Commonly, most trading companies prefer a minimum of 300,000 RMB to get an import/export license, and a minimum of 600,000 RMB when opening manufacturing wholly foreign-owned enterprises in China.

When still on the registered equity, it is crucial also to understand that different regions in China suit different industries. For example, Shenzhen has positioned itself as a tech hub for IT equipment, drones, and smartphones, while Shanghai is a center for logistics, automobile, and finance.

When you register a Wholly Foreign-Owned Enterprise, the activities you can get involved in depend on the business description that you provide at registration. Here are some of them:

• Trading WFOE: This type of company allows you to import products to China or export to other countries. You can also use the business for domestic trading in China.

• Consulting WFOE: If you register a consulting WFOE in China, the business is allowed only to sell professional services. Besides, the registration takes a shorter period compared to a trading WFOE.

• Manufacturing WFOE: This type of business allows you to create a full supply chain to buy, process, and trade the finished products. Note that manufacturing WFOEs are required to be registered in industrial parks and are only allowed to commence once Environmental Impact Assessments are completed and the project approved.

How to Register a WFOE in China

During company registration in China, the standard process takes 2 main stages: pre-registration and post-registration.

During the pre-registration stage, you are required to prepare and submit the documents needed for registration. These include notarized documents of the controlling entity and passport copies of the investors.

In the second phase of company registration in China, the company is registered with a number of agencies. Finally, you use the Business License that you will get from the regional Administration for Industry and Commerce (AIC) to apply for the certificate of incorporation.

By looking at the above process, there is no doubt it is complex and lengthy, but this should not dim your resolve to take advantage of the high-potential Chinese market. So, consider bringing in an expert agency to help simplify the process by preparing the documents for you, working with different agencies on your behalf, and advising you on compliance. Check us on this website, and we will hold your hand from company registration in China to the end.