Company Registration Services:
RMB 100,000~ RMB 500,000 (approx. 10,000 ~ 50,000 EURO) is the minimum registered capital for Consulting, Service or Hi Tech WFOE registration in Shanghai, Beijing, Shenzhen. Different cities of China have different policies on minimum registered capital, please contact a Path To China office at the bottom of the page for practical advice if you are planning to incorporate a WFOE in China.
A Foreign Invested Partnership Enterprise (FIPE) may worth a try if investors don’t want to put much capital to establish a business in China,
After China’s entry to the WTO, most industries in China welcome foreign investment. WFOE establishment in China became the first option for foreign investors (instead of Rep. Office) in China. At the mean time, for tax purpose, an effective licensing system, and other reasons more and more investors use Hong Kong as the holding company to invest in mainland China, using this offshore company to hold their operations in China.
As needed, we will help you at every step in order for you to be successful in China. Forming a company in China can be very difficult if you are not familiar with Chinese legislation and the requirements of different authorities. Our professional consultants will help foreign companies to set up in China in the most cost effective way.
– Starting from USD 4,000 you can get your Wholly Foreign Wwned Enterprise (WFOE) registered. The package includes all official applications( i.e. business license application, tax application, bank account application)
Advantages of WFO
The advantages of incorporation a WFOE, compared with other types of enterprises, include, but not limited to:
1. Independence and freedom to implement the worldwide strategies of its parent company without having to consider the involvement of the Chinese partner;
2. Ability to formally carry out business rather than just function as a representative office and being able to issue invoices to their customers in RMB and receive revenues in RMB;
3. Capability of converting RMB profits to US dollars for remittance to its parent company outside of China;
4. Protection of intellectual know-how and technology;
5. For Manufacturing WFOE, no special requirements for Import / Export license for its own products;
6. Full control of human resources
7. Greater efficiency in operations, management and future development.
According to WFOE regulations, “Foreign investors are permitted to setting up a 100% foreign owned enterprise in industries that are conducive to the development of China’s economic benefits, and not prohibited or restricted by China government.” The Catalogue of Guidance to Foreign Investment” [-Latest Catalogue of Guidance EN-CN-]categorises fields of potential investment as “prohibited,” “restricted” and “encouraged”. It is advisable to fully comprehend the interpretation of these categories. In China, Business scope of a business is a “one sentence description” covering all of the present and future activities of the WFOE; it is essential this encompasses every envisaged scope of future activity. The WFOE can only conduct business within its approved business scope, which ultimately appears on the business licence. One of the most important issues in WFOE application is business scope. Any amendments to the business scope require further application and approval. Business scope of a company in China is not as broad and general as in other countries. Generally business scope includes investment consulting, international economic consulting, trade information consulting, marketing and promotion consulting, corporate management consulting, technology consulting, manufacturing, etc. After China’s entry into WTO, more and more business is open to WFOE especially in Trading, Wholesale and Retail business, check the Catalogue of Guidance to Foreign Investment which was Amended in 2007 [-Latest Catalogue of Guidance-] (PDF, 325 KB)
Registered and Paid up Capital
Registered Capital: USD$140,000 is a good idea for all kinds of WFOE, with USD$ 140,000 investment it’s easy to get approved. Initial Paid-up would be 20% of the registered capital, the balance should be remitted within 2 years.
Registered capital is the amount that it’s required to run the business until it can break even – the ‘registered capital’ is a guideline only. If you do looking for a minimum registered capital, for instance RMB 30,000 (which is impossible to establish a WFOE in China) this means you will run out of money pretty soon, which leads to increased costs in reapplying for permission to increase capital, additional licensing fees and renewals of business licenses and so on. The WFOE needs funding via it’s registered capital until it’s about to support itself from it’s own cash flow.
However the amount of registered capital is dependent upon factors like Scope of Business and Location. In reality local authorities will review the feasibility study report (and check the lease contract) approve the investment on a case-by-case basis; reduced registered capital could be negotiated in some cases.
The minimum registered capital guides for various industries according to our practice in China, for instance Beijing, Shanghai[100k RMB registered capital Sample], Guangzhou, Shenzhen, Hangzhou, Dalian, Ningbo are given below:
Consulting WFOERMB 100,000 ~ RMB 500,000Service WFOERMB 100,000 ~ RMB 500,000Hi-Tech WFOERMB 100,000 ~ RMB 500,000Trading WFOE / FICE/ RetailRMB 500,000 ~ RMB 1 millionFood & Beverage WFOERMB 500,000 ~ RMB 1 millionManufacturing WFOERMB 1 million or USD 140,000
Fees: Lower cost/ Fees/ Charge
Shanghai, Beijing, Shenzhen- China