WOFE Registration in China

WOFE Registration and Formation Services in China

After 20 years of reformation and opening up trade channels with the west, China has become a prominent commercial hub which attracts many international companies. The huge inflow of foreign entrepreneurs to the country has brought advanced international technology and management experience. At the same time, there is increased competition in the domestic market which is squeezing national companies and brands. The mass acquisition of domestic enterprises, has resulted in monopolies, which exacerbate existing economic security problems. However, with the stable and continuous development of China's national economy, the country is building a moderately prosperous society. China has plenty of potential when it comes to international direct investment, and is one of the world’s most important driving forces for economic development. The Chinese government recently proposed using foreign capital participation to restructure the state-owned economy, attract multinational investment, foster ownership to benefit domestic enterprises, and accelerate the implementation of "going out” aspects to promote the development of a western region that attracts investment.


Types of foreign enterprises currently being registered in China

According to the Chinese laws and regulations, the current common types of foreign investors in China are: Foreign (regional) enterprises - representative offices, wholly foreign-owned enterprises and Sino-foreign joint or cooperative enterprises.
 

  • 1.   Foreign (Region) Representative Offices (referred as “Rep Office”). It is a representative office of a foreign enterprise. It usually conducts liaison or research related activities in Mainland China and is not a separate legal entity. Although it cannot directly involve in profitable commercial activities, it provides a good channel to have a thorough understanding of the Chinese market.

 

  • 2.   WOFE (Wholly Foreign-Owned Enterprise) is a company which is 100% owned by a foreign company and formed in accordance with the rules and regulations in China. It possesses a separate legal entity. Foreign investors can have complete control over the WOFE company and the profit it makes can be remitted overseas.

 

  • 3.   Sino-foreign Joint / Cooperative company: This is a company formed by foreign companies or enterprises and other economic organizations or individuals, and has been approved by the Chinese government to conduct business in its territory, with Chinese companies, or other economic organizations to invest or provide cooperation enterprises. It usually has a separate legal entity.

Currently, WOFE is the most common type of company registration adopted by foreign investors. However, the Sino-foreign Joint / Cooperative Enterprises structure must be used special industries such as mining, tertiary education institutions, business and other performing show venues.

Consult the "Foreign Investment Industrial Guidance Catalogue" and information on the other relevant laws and regulations, restrictions. To learn more about the WFOE registration services we offer in China, please don’t hesitate to get in touch with us.