If you are one of those who is planning to set up business in China then it is essential to determine such Chinese law regarding the minimum registered capital requirement for forming a WFOE. In fact, there are only few business types that your can start up in Shanghai that too after following proper terms and conditions. Do you know that you can’t ask any existing Chinese businessman about the latest market trends? In that case, it is tough to set up a business on their own.
This blog guides few important things that you need to consider before forming WFOE in Shanghai:-
1. Determine Whether Your Business Scope Is Legal Or Not?
There are a number of industries that have been restricted for a foreign investor, so before signing a lease in Shanghai make sure your business scope must be legal in China. This is the only reason that many foreign investors tries to get the entry ticket through Joint ventures in China instead of forming WFOE.
2. Make Sure You Are Investing In Right Business
In China, forming an independent company is a big challenge as you need to come into compliance with a variety of applicable laws before getting the approval for the business setup. The most challenging part about this approvals is, that all are based on the business scope of your WFOE. Getting an approval not only required a hefty fee but also required great documentation without which you can’t attain the approval.
3. Find Out The Sound Location For Your Business Type
For a successful business, you should find out the city and the district where your WFOE will be located before starting the process. It is important to finalize the location in advance as the rules applicable to formation process is usually vary city to city and district to district.
4. Hire A Local WFOE Agent
You can cut down the stress of business set up by hiring the reliable WFOE agent. He will not only guide you throughout the setup process but also take the responsibility of paperwork. These agents are very well familiar with the process and help foreign investors in getting the business license without any hassles.
5. Hire A Good Local Accountant
Hiring a local accountant can be less expensive than hiring it from big four companies to handle day-to-day accounting. Generally, the basic accounting can be handled by the senior staff member. China has many reputed accounting firms from where you can easily hire the local accountant for making a financial projection of WFOE.