Business China

China WFOE Advantages

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There are many advantages of a China WFOE formation and registration. WOFE refers to any enterprise that’s been set up within Chinese territory, which has 100% capital owned by foreign investor(s). It wouldn’t be wrong to say that WFOE formation and setup has been adopted and welcomed in significant industries by foreign investors.

Advantages of a China WFOE Formation and Registration

  • Self-financing: This means that the operating income is wholly owned and controlled by the investors after taxation, following the relevant tax regulations of China. If the enterprise terminates, it shall make an announcement in time and carry out liquidation according to the legal procedures.
  • One of the biggest advantages of having a China company registration certificate, is that business owners get to remit all profits from the China company to their parent company outside of China legally and without hassle.
  • Better protection of intellectual know-how and technology.
  • Issuance of a Certificate of Origin (CO) in international trade.
  • Make client invoices under the name of your China Wholly Foreign Owned Enterprise, and collect payments in RMB, while carrying out your business, which is inexecutable under a China RO (Representative Office in China).
  • Independent management without Chinese participation. The enterprise shall carry out the operation and management activities in accordance with the approved bylaws without interference.
  • In addition to land, the investment of enterprises is considered to be 100% private to foreign investors. There is also no equity of the Chinese investor. An enterprise can be a partnership by foreign investors or individual proprietorship once you have gone through the company registration process in China.
  • No need for a Parent company to set up more than 2 years while Rep Office’s need at least 2 years.
  • Enjoy greater efficiency in operations, management, and more scalability.
  • Full control of human resources;
  • Ability to carry out worldwide strategies of your parent company or individual shareholders independently.
  • As per the rules of a WFOE formation and setup, business owners are able to apply for working visa (residence permit) for their own legal personality and employees.

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