Structure of a WFOE

Step 1. Restriction on Services: 

-A WFOE can only conduct its business within its approved Business Scope. Business Scope of a service orientated WFOE includes:

a. investment consulting
b. international economic consulting
c. trade information consulting
d. marketing and promotion consulting
e. corporate management
f. technology consulting

Step 2. Name Approval Required

-As the application of pre-approval takes time, it is suggested that several Chinese names are chosen

-An English name for the enterprise is viewed by the authorities as a reference only and there is no need for registration if such

-Possible to reserve the name for a proposed WFOE for a maximum of six months.

Step 3. Authorized and Paid up Capital (Registered Capital)

-Minimum Registered Capital for a WFOE is RMB$30,000

-WFOE concerned with the provision of services is RMB$100,000

-Money must be deposited into a specified bank account(Capital Account) of the WFOE

-Contributions must be verified by a certified public accountant from China

Step 4. Shareholders

-A minimum of one shareholder is required.

-A minimum of one shareholder is required.

Step 5. Directors/ Board of Directors & Board Meeting

-There can be one or more directors appointed.

-Directors must be natural persons of any nationality but need not be riding in China.

-The Board of Directors  of a WFOE must consist of a minimum of three members or a maximum of thirteen.

Step 6. Legal Representative

-A WFOE required t appoint a Legal Representative.

-The Legal Representative can be of any nationality and does not have to be a resident in China.

Step 7. Supervisor/Board Supervisiors

-A WFOE is required to appoint at least one Supervisor.

-The supervisor can be of any nationality  and be a resident anywhere.

Step 8. Registered Office/Business Address

-A WFOE must maintain a business address in China.

-The office premises must be in a commercial building with a minimum of 12 months lease in force at the time of application.

Step 9. Tax Fillings

-A trading WFOE must required to file monthly Business Tax Returns and Income Tax Returns.

Step 10. Annual Reporting

-A WFOE is required to submit its Annual Audited Financial Statements to the Taxation Bureau for taxation purpose.