If you are planning to conduct business directly in China, the best option for you is formation of WFOE (Wholly Foreign Owned Enterprise) in China. This business vehicle let you make import and export formalities in China, sell goods directly on domestic market of China, using local payment systems, provide directly your services to China customers, receive money in local currency (RMB), issue local tax invoices to Chinese customers, hire local staff, make visa for foreign staff etc. If you incorporate your China company in the form of WFOE (not Joint Venture Enterprise) you will not depend on your Chinese partner and you can independently manage your company business affairs and its bank account.
Note: we are more specialized in the formation of China WFOE in Guangzhou (at South of China, in Guangdong Province). We also can provide formation services in other cities, but the cost of services will be about two times higher.
Below you can find terms of formation of China WFOE.
Formation of WFOE in China is the best option for you business which let you be closer to your customers and suppliers in China, control sales on local market or control producing and delivery processes, use local payment systems, make Chinese visas, officially hire local staff etc.
Formation of China WFOE is much safer in comparison with Joint Venture Enterprises, and gives you much more possibilities in comparison with registration of representative office in China.
Requirements for formation WFOE in China are quite simple: you need to provide legalized documents of foreign founder and rent office premises. The period of formation in recent years greatly reduced, now it takes about 1,5 -2 months (in comparison with 4-6 months that was before).
Period of China WFOE formation is now (compared to previous years) greatly reduced and is now approximately 1,5-2 months.
Prior to the process of formation of China company (WFOE) you need to fulfill following requirements:
1. To rent an office premises in China. If necessary in Guangzhou we can help to rent a tiny office on the outskirts of the city, rather unsuitable for job, but quite suitable for WFOE formation purpose. The rent price for such office is RMB8500 to RMB12500 per year (depends on area). Or you can rent a normal office. The rent price for office in Guangzhou with area 50 sq.m. is around RMB3,000.00 to RMB5,000.00 per month (depends on district and level of office building). Note: usually at the signing of rent contract in Guangzhou you should pay rent prepayment for the first month, deposit at amount of 2 months rent, and commission of real estate agent at amount of half of month rent.
The list of documents regarding office premises required for process of WFOE formation:
2. To legalize the documents of founder in Chinese consulate in the country of residence of founder (for Hong Kong companies: legalized by authorized notaries in Hong Kong). We can recommend to use preliminarily registered (half a day) Hong Kong company (please see information about this service here) as a founder, because it will simplify process of legalization (simplified process for Hong Kong companies) and payment of registered capital of China WFOE (no foreign currency control in Hong Kong). Process of legalization of documents specifically for Hong Kong companies is very simple and quick. We fully assist in the process of legalization of Hong Kong company documents, no need of your personal presence. Our assistance is free of charge, but the cost of the legalization is approximately US$800.00, period of such legalization is 3 to 4 days.
List of founder documents to be notarized and legalized in the Consulate of China if founder is a corporate entity (note: 2 sets of legalized documents are needed - it can be original and official duplicate) :
List of founder documents to be notarized and legalized in the Consulate of China (note: 2 sets of legalized documents are needed - it can be original and official duplicate) if founder is a natural person:
3. Other documents to be provided:
In the process of formation of Chinese WFOE the service of opening bank account in China bank is provided free of charge. It takes usually 3 weeks for opening 3 types of account: registered capital account, current account in RMB, USD payment account. Personal presence of director of China WFOE on this stage is required.
Unlike Hong Kong companies, for China companies (including WFOE) there is a requirement of actual payment of registered capital. But now Chinese companies can pay it for as long period as company exists (usually 30 years). The amount of registered capital of China WFOE is about RMB500,000.00 for a trading company, and about RMB300,000.oo for service company. The amount should be calculated by yourself on the principle that it should be enough to maintain the company before it starts to earn enough to maintain itself (for example, you can calculate for 1 year: 12 months of office rent, utility expenses, salaries, transport fees, communication fees, for trading companies - initial turnover etc.). Registered capital can be paid by parts. No requirement to freeze part of registered capital, all funds can be used in economic activity.
The main administrative expenses (besides of rent, salaries, utility bills, transport and communication expenses) of China WFOE are:
1. monthly accounting fees. Our company offer accounting services for your Chinese company:
For Chinese companies with a small turnover accounting fee in our company is 1600 yuan China per month. During the service visa service for foreign staff (and their family) is provided by our company for free.
2. annual audit fee (including three audit reports). Audit fee amount depends on turnover, starting from RMB4,500.00 once a year.
3. annual examination of the documents of China WFOE: RMB1,500.00 once a year.
Our consultant will contact you and answer your questions. Please note that we are in China and there can be difference with your time zone.
Our consultant will contact you and answer your questions. Please note that we are in China and there can be difference with your time zone..