China Company formation - WFOE, FICE


A Wholly Foreign Owned Enterprise (WFOE) / Foreign Invested Commercial Enterprise (FICE) is a limited liability company wholly owned by the foreign investor(s). WFOEs / FICEs allow foreign investors to manufacture, process, assemble, trade, distribute or deliver services in China, without joining together with a Chinese partner.

Setting up a China company does not necessarily mean that you can engage in any sort of activities, as may be the case in the west and certainly in Hong Kong.

Wfoe or fice can only be operated within the scope of business as approved by the authorities. If, at a later date, the wfoe or fice wishes to add other activities, these are subject to further approval by the relevant government authorities. It is therefore very important from the onset of your establishment to determine what will be the functions of the wfoe or fice.

The difference between a wfoe or fice business scope is that the FICE is able to have distribution rights (ie. import and export rights) included into the business scope.



Business Scopes of WFOE Companies


The following are examples. It can vary depending on the activities the Company would like to perform.


Trading wfoe (within a Free Trade Zone)

The Business Scope of the Company shall mainly be involved in: international trade, transit trade, foreign trade and trade agency between enterprises in the Zone; foreign trade agent business for domestic enterprises with self-export and import operating rights with enterprises outside the Zone; simple commercial processing business in the Zone as well as commercial consulting services for enterprises in the Zone (only those approved by the Administration of Industry and Commerce).


Trading wfoe with distribution rights, fice

The Business Scope of the Company shall mainly involve: the import and export of commodities; wholesale and/or retail of the engaged commodities.

Manufacturing wfoe with/without distribution rights

The Business Scope of the Company is: Produce and develop a certain product(s), sell self-made products and provide the related technical consulting service.


Service wfoe

Business Scope is determined by the service provided of the wfoe.



Asia Business Centre is one of the legal representatives for setting up company in China


The range of our services can be tailored to your own needs and is designed so that you can select those which are appropriate to your situation and wfoe structure. Much depends on what you will be capable of dealing with in-house.


Pre-establishment of wfoe


Planning of wfoe

  1. Review your international structure and objectives in China

  2. Consider financing options for your operations

  3. Recommend the most suitable tax structure

  4. Advice on transfer pricing

  5. Advise on profit repatriation and exit strategies

  6. Review inter-company service agreements


Company formation china /Business registration china

  1. Advice on choices of business vehicles

  2. Establish your new entity

  3. Register another business presence

  4. Advice on Chinese Internet domain presence


Compensation issues

  1. Advice on remuneration structures for both Chinese and non-Chinese employees.

  2. Perform salary benchmarking

  3. Advice on tax-efficient bonus, incentive and stock option schemes


Human Resources and Visa Issues

  1. Assistance with tax-efficient employment agreements

  2. Prepare work rules

  3. Provide executive recruitment services

  4. Prepare individual income tax returns (China, US and other countries) for employees

  5. Assist non Chinese employees with vsia and work permits


Post-establishment of wfoe


Cash Administration

  1. Payment of invoices

  2. Operation and reconciliation of bank accounts

  3. Acting as sole bank authorized signatory

  4. Arranging cash repatriation


Employees

  1. Advice on location of payroll, social insurance and labour insurance requirements

  2. Registration of new China entity for social and labour insurance

  3. Provision of a full service comprehensive payroll

  4. Payment and administration of withholding tax

  5. Preparation of statutory employer/employee reports


Accounting and report

  1. Maintenance of records and cash book

  2. Preparation of management reports at agreed intervals

  3. Preparation of statutory and non-statutory reports

  4. Preparation of financial models and projections


Tax Compliance & Consulting

  1. Turnover tax, e.g. VAT planning

  2. Tax registrations

  3. Prepare corporate income tax returns

  4. Maintenance of record



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