Wholly Foreign Owned Enterprise (“WFOE”) or Foreign Invested Commercial Enterprise (“FICE”)
WFOE or FICE is a limited liability company formed in China entirely by foreign investors. It is totally under foreign control and it does not involve any Chinese partner participation. It allows foreign investors to manufacture, process, assemble, trade, distribute, deliver services in mainland China. The nature of business must be registered and approved by the mainland China Government during the process of registration and it can be changed in later days with the prior approval of the Government.
WFOE or FICE can generally control their own governance through the by-laws approved by the Government. The initial investment capital for setting up a WFOE is RMB100,000 (US$16,000) to RMB500,000 (US$79,000) for consulting industry field and RMB1,000,000 (US$160,000)for trading and manufacturing industries. In recent years, it has been the Government policy to encourage businesses with specific business natures to be setup in some second- or third-line areas and cities of some provinces. These provinces may offer lower investment capital requirements. Corporate income tax rate is generally 25%.
WFOE is the most popular corporate entity for non-PRC investors owing to their versatility and some unique advantages:
- the ability to uphold a company’s business strategy free from interference by Chinese partners
- total management control by investors within the laws of the Government
- the ability to both remit and receive Chinese official currency Renminbi(RMB) to and from the overseas parent holding company
- increased protection of trademark and intellectual property, in accordance with international law
- shareholder liability limited to original investment
We offer one-stop services for corporate documents notarisation and legalisation by specified organisations such as the China Appointed Attested Officers, the China Legal Services (HK) Limited in Hong Kong as well as Chinese embassies of recognised countries. We also provide such services as:
- Preparation of bank reference letters;
- Translation of documents;
- Review of business proposals;
- Leasing of office and factory; and
- Other requests and requirements.
Time frame for registration is around 2–4 months, subject to the different provincial governments’ practices and the nature of business of the applicant companies.