WFOE means wholly foreign owned enterprise.

OVERVIEW OF WFOE

The Wholly Foreign Owned Enterprise (WFOE) is a Limited liability company wholly owned by the foreign investor(s). In China, WFOEs were originally conceived for encouraged manufacturing activities that were either export
orientated or introduced advanced technology into China. However, with China's entry into the WTO, these conditions were gradually abolished and the WFOE is increasingly being used for service providers such as a variety of consulting and management services, software development and
trading as well.

ADVANTAGES OF WFOE

From the foreign investors point of view, the advantages of establishing a WFOE include: Independence and freedom to implement the worldwide strategies of its parent company without having to consider the involvement of the Chinese partner; Ability to formally carry on business
rather than just a representative office function, Issue invoices to their customers in RMB (Chinese Currency) and receive RMB revenues. Convert RMB profits to US dollars for remittance to their parent company outside
China, Employ staff directly within China, Protection of intellectual know-how technology and trademark. Not required to share profits with Chinese counterpart; and Greater efficiency in its operations, management
and future development.

TERM AND TERMINATION

In China, terms of 15 to 30 years are typical for a manufacturing WFOE(although some may have a longer term). It is also possible to obtain extensions of the WFOE's duration. For projects in which the amount of investment is large, or the construction period is long and the return on investment low, projects producing sophisticated products using advanced or key technology provided by the foreign partner, or for projects
producing internationally competitive products, the term of WFOE may be extended to 50 years. With special approval from the State Council, the term may be even longer than 50 years.
The WFOE may be terminated under certain conditions, for example, the inability of the WFOE to operate due to heavy losses, in the occurrence of an event of force majored, etc.

REQUIREMENTS FOR RELEVANT APPLICATION FORMALITIES
If you want to set up a WFOE IN Hangzhou, China, you should offer the following documents:
1. A project proposal and feasibility study report ( in print and under the company seal)

2. Original copies of the application paper and the resolution by the Chairman of the Board of the foreign investor (in printed form signed by members of the Board and with company chop),
3. Copies of the business licenses or certificates of incorporation of the foreign investor (usually with the permission chop from the government
department.

4. An original copy of leasing agreement with chop of the Housing Department.

5. Directors name list of board or management institution name list,importing equipment list.

6. An original copy of the corporate ratification paper (2 copies in duplicate).

7. Two original bank credibility letters for the foreign investors,
stating a 7-digits bank balances, issued within 6 months in both English and Chinese language.

8. A copy of the approval paper for corporate formation and other papers for company alterations (the original are required for check-up).

9. Notice of enterprise's name confirmation appraised by the Industry & Commerce Administrative Bureau.

10. Contracts and charter versions (signed by legal representative or Bailor).

11. Two photos of the legal person of WFOE.

12. An application form for company alteration.

13. A copy of the stub of corporate certificate of approval.

14. Whole set of materials for application of project establishment and approval documents (original) for project establishment.

Hope this helps!

If you want to set up a WOFE you need to consult a law firm in China.

depending on accessibility and what you plan on doing, setting up in HK could be more beneficial with certain transactions (tax wise)

If you talk with someone at China Star, I believe all of your questions can be answered.

there are many difference between HK and China in setting up a business.(market,tax,registered capital,policy,etc)

for an instance,HK allow foreigners to establish a business without registered capital(which means you have to bear unlimited liability),however, in china, the government only allow foreigners to establish three types of business:WFOE,Joint venture,representative office.the chinese government just released a report that foreiger can establish unlimited liability corporation, but we are not sure whether this report will come into practice.

we are a professional company registration agency in beijing,We can provide you beijing Company Registration: representative office(Beijing RO);beijing wholly foreign owned enterprise(WFOE);Beijing joint venture (beijing JV)registration; visa; work permission.

please contact amy for more information.
Contact: Amy
Mobiel: 15011464429
Phone: 010-51506763
Email: beijingcorporationsetup@hotmail.com
MSN: zenger72@hotmail.com
Address: 310 Room, Building 1,BeiXinDaSha,HaiDian District, Beijing.