A WFOE is 100% foreign owned, but can trade freely in China.
What Is A Wholly Foreign Owned Enterprise?
A wholly owned foreign enterprise means that an overseas investor (company or individual) has 100% stock equity. As its name suggests, a wholly foreign owned enterprise also known as a WFOE or WOFE. The investor independently takes and manages the company, and gets the company profit. WFOE has become one of the highest priorities for foreign investors.
A WFOE in China offers independence to foreign companies.
Advantages of A WFOE in China
Its advantages include:
Reasonable requirement on investment capital
Independence to operate in China the way you see fit, without needing to answer to a local business partner.
Liberalized and efficient operation, as there is little need to get bogged down in politics or red tape.
Direct management and implementation
Invoicing in local currency, CNY, as well as the reception of revenue in CNY as well.
Can transfer profits in USD to the parent company outside of China.
Ability to hire low cost local labor and decide who to hire and when.
Ability to protect intellectual property, as it remains private.
All profits belong solely to the WFOE.
Minimum capital injections for foreign companies entering China are No longer a requirement.
What Is the Capital Investment Needed For China WFOE Registration?
Capital investment was traditionally required to demonstrate that the WFOE, or WOFE as it is often called, would not run out of money before being able to break even.
In recent amendments to the foreign investment laws, in a bid to spur more investment by lowering the barrier to entry for foreign firms the government has since removed the minimum capital requirement when incorporating a WFOE in the country.
Companies can now determine how much capital will be required to maintain their operations and must simply ensure that they meet those targets within a period of 20 years.
Chinajobvisa are on hand to answer your questions, explain the process and costs, and to advice on the details; all for free with no strings attached.