Definition of Service WFOE,Trading WFOE,Manufacturing WFOE

Update time:2018-01-15  source:

Service WFOE

A Service WFOE is a company that has as its core activity the provision of services to third parties.

It is the easiest type of limited liability company to set up as it requires a shorter establishment time frame and a lower capital requirement compared to a Trading WFOE or Manufacturing WFOE.

Below is an example of the business scope for a Service WFOE that provides technical services:

“To provide XXX technical services and consulting services for XXX technologies; technology transfer, technology consulting and technology development; and wholesale, import and export of related products associated with the provision of said technical consulting services and commission agency services (excluding auction) and other related services.”

Trading WFOE

To engage in import and export activities as well as domestic distribution (i.e., retail, wholesale and franchising trade activities) in China, a trading company – also known as a FICE – can be established.

Trading WFOEs can combine different business activities, e.g., assembling and providing services. Below is an example of a business scope for a FICE:

“Wholesale, commission agency (excluding auction), import and export of XXX products; after-sales services; technology transfer; technology consulting; technology development and other business consulting services.”

Manufacturing WFOE

Manufacturing WFOEs refer to companies engaged in industries such as machine manufacturing and electronics; energy; building materials and construction; medical equipment; transportation; and animal and plant raising and breeding.

A Manufacturing WFOE is required to rent a factory space as its registered address.

The local Administration of Industry and Commerce (AIC) will physically check the factory space before registering the WFOE.

In addition, Manufacturing WFOEs are required to obtain approval from the Environmental Protection Bureau.

In some cases, a full report on the estimated environmental impact of the factory issued by an appointed agent is required, which is intended to ensure that manufacturing production processes comply with specified environmental norms.

The Bureau will require information about the raw materials used, the machinery and equipment, consumption and safe disposal of toxic products.

An example of the business scope of a Manufacturing WFOE is:

“Design, develop and manufacture XXX products and related parts and components, sale of self-manufactured products; wholesale, import and export of similar products and commission agency (excluding auction); provision of after-sale services and other associated services to the products; technical consulting, technical development and technology transfer.”

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