Introduction and Different Types of Wholly Foreign Owned Enterprise

Update time:2016-02-23  source:

Introduction 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.


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.


The registered capital of a Wholly Foreign Owned Enterprise (WFOE) should be subscribed and contributed solely by the foreign investor(s).


A WFOE does not include branches established in China by foreign enterprises and other foreign economic organizations. The Chinese Laws on WFOE do not have a clear definition of the term of "branches".


The term of "branches" should include both the branch companies engaged in operational activities and representative offices, which are generally not engaged in direct business activities. Therefore, branches and representative offices set up by foreign enterprises are not WFOE.

 

Different types of WFOE


There are many businesses for WFOEs. The following are frequently chosen by our clients:


1.If the WFOE manufacture here, we call it a it's Manufacturing WFOE.


2.If the WFOE is allowed to do Consultancy or Service, we call it Consultancy (or Service) WFOE.


3. If the WFOE is allowed to do trading, wholesale, retail or franchising in China, we call it a Trading WFOE or Foreign-Invested Commercial Enterprise (FICE). (You can check "FICE Registration" on the right menu for more information and details about the FICE)


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