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    Company Formation

    China WFOE

    Wholly Foreign Owned Enterprise
     

Introduction

A limited liability company wholly owned by foreign investor(s) with full control over management and operation in China.

Pros and Cons

Pros

  •  With separate legal entity in China;
  •  Feasible to carry out all business activities (subject to the business scope stated in business licence);
  •  Negotiable for tax incentive with local government;
  •  Allow to hire local staff;
  •  More flexibility in company strategic management.

Cons

  •  More complex application process and each step may have profound impact in future development of the company: business scope, financing, tax rates, director board management etc.;
  •  Capital injection is required to meet the minimum level for specific industry and in specific territory of China (such as free trade zones and export processing zones). The minimum capital is around USD 140,000;
  •  Even though WFOE is limited liability in nature, a legal representative needs to be appointed and take up unlimited liability of the WFOE.
Types of WFOE
Types Minimum Registered Capital
In Free Trade Zone RMB 10,000
Consultancy RMB 100,000 - RMB 500,000
Servicing RMB 100,000 - RMB 500,000
Hi-Technology RMB 100,000 - RMB 500,000
Trading / FICE / Retail RMB 500,000 - RMB 1,000,000
Food & Beverage RMB 500,000 - RMB 1,000,000
Manufacturing / Production RMB 1,000,000 or USD 140,000

 

Registered capital may be varied based on the setup location.

 

 

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Hong Kong Most Valuable Companies Award 2014

Hong Kong's most proactive local and foreign companies setp upstage to be honoured with the Hong Kong's Most Valuable Companies Trophy of Excellence. Thanks again for the nomination from Mediazone Group 2014.