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WFOE (wholly foreign owned enterprise) is a business entity formed in China entirely with foreign capital. It is totally under foreign control and does not have any formal Chinese ownership participation. For a foreign company to be able to issue receipts and export goods from China, it must be able to legally registered as a local company or a WFOE. A WFOE is set up as limited liability entity and represents separate legal persons and is taxed according to local legislation.
Guangzhou WFOE Registration-Advantages of WFOE in Guangzhou
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 and receive RMB revenues. Convert RMB profits to US dollars for remittance to their parent company outside.
Cheap labor, which can lower your cost;
Not required to share profits with Chinese counterpart;
Greater efficiency in its operations, management and future development.
Guangzhou WFOE Registration-Application Documents for WFOE in Guangzhou
A project proposal and feasibility study report (in print and under the company seal);
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);
Copies of the business licenses of certificates of incorporation of the foreign investor (usually with the permission chop from the government department.)
An original copy of leasing agreement with chop of the Housing Department.
Directors name list of board or management.
An original copy of the corporate ratification paper (2 copies in duplicate).
Two original bank credibility letters for the foreign investors, stating 7-digits bank balances, issued within 6 months in both English and Chinese language.
A copy of the approval paper for corporate formation and other papers for company alterations (the original are required for check-up).
Notice of enterprise's name confirmation appraised by the Industry & Commerce Administrative Bureau.
2 photos of the legal person of WFOE.
A copy of the stub of corporate certificate of approval
Guangzhou WFOE Registration-General Procedures and Estimated Time Frame
WFOE company name reservation-1 work day
Certificate of Approval Application-7 work days
Business License Registration-5-7 work days
Application and engraving of Company stamps-1work day
Organization Code License Application-1 work day
State Tax Registration-1 work day
Local Tax Registration-1 work day
Foreign Exchange Registration-1 work day
Bank account opening-10 work days
Financial Registration for WFOE-3 work days
Registration with local Customs-3 work days
Registration with China E-Port-3 work days
Total Time required-7~8 weeks
Guangzhou WFOE Registration-Taxation of WFOE in Guangzhou
The China tax could be classified as follows: Value Added Tax (VAT) at rate of 0-17%, Business Tax (BT) at rate of 3-20%, Enterprise Income Tax (EIT) at rate of 25%, Individual Income Tax (IIT) at rate of 5-45%, Consumption Tax by customs (CT) at rate of 3-5%, Resource Tax (RT), City Maintenance and Construction Tax (CMCT) at rate of 1%, House Property Tax (HPT), Stamp Duty (ST) at rate of 0.5-1%, Urban and Township Land Use Tax (UTLU)information depends on the local stipulation). Your company name must be distinguished from the other registered names. If the word “China” is within the company name, it is required to be pre-approved by ICAB at national level in Beijing.