3 Steps to Set Up Wholly Foreign Owned Enterprise in China

There is no denying this fact that China is the fastest growing country where you can find some of the best opportunities to further expand your business. However, the process of setting up a business in China is not as easy as it may sound. Every country has their own rules and regulations for the foreign investors. You need to follow the complicated procedure for obtaining a business license but if you are planning to set up Wholly Foreign Owned Enterprise in China, then you must follow this step-by-step guide.


The establishment process of a WFOE can vary somewhat depending on the chosen structure, namely a service WFOE, manufacturing WFOE or trading WFOE and its associated business scope. To Make your task easier, this blog has provided you step by step guide so that foreign investors can easily understand the process.

3 Steps to Established WFOE in Shanghai:

Step 1: Company Name Approval

One of the first steps for foreign companies is to decide on an appropriate name for the Chinese market. The key pieces of legislation governing this are the regulations on registration and management of Enterprises name. The basic condition for deciding the company name is that it should not be copied or misleading consumers, no hidden competitions, damages or contradicts national unity. Your proposal for name approval will be immediately rejected if you use any special characters as well.

Step 2: Submit the Details of the Offices Space

As the company name contains the city of registration, careful consideration should be made before engaging a local estate agent or landlord. The lease should be made before submitting the application for incorporation and a rental period must be of 12 months.

Step 3: Submit Your File For Registration

As long as company’s business scope is not restricted by the negative list for foreign investment or is not subject to the special administrative measures for foreign investment, the application can go through a simplified record-filing process. This process requires:

●An application form
●Commitment letter by all investors or their representatives
●Business license or pre-approval documents for the name of the WFOE
●Power of attorney and identity paper of the representatives
●Certificates or identity document of investors.

These are the few simple steps that can help you process your file and enable you to get the approval for your new business setup in Shanghai.


How Does A Foreigner Start Up A Company In Shanghai?

There is no surprise in this fact that China is the fastest growing country but starting a business in China is not an easy task. Every country has their own set of rules and regulation for starting a business but China has the most challenging one.

wfoeOver the years, many experts have moved to China with the dream to start their own business and realized that it is not as easy as it seems. Without hiring the professional agent, it is hard to get energy into the Chinese market. That’s why some of the important information has put together into this blog that can help you easily understand the entire process.

Here are the few things to consider while planning to get entered into the Chinese market for setting up your own company:

1. Understand The Business World

It’s easy to make assumptions about what your customers will want and what will make your business successful but instead of making assumptions, you should do your own research and find out the what goes well and suit your business needs.

2. Play by the Rules

There are a lot of laws you have to abide by when you open a business in China and a lot of paperwork to get approved. Sometimes it may seem like an unnecessary hassle and you might get tired of jumping all these hurdles but keep in mind that complaining will just cost you time. To avoid all these hassles, it is best to know exactly which document you need and where you have to submit them or get them approved, which will save you a time.

3. Choose The Type Of Business Entities

Once you have an idea of what type of services or product you want to offer, you have to register your new company with the government. There are different types of business entities you can choose from, the most common among foreigners being representative offices, joint ventures and Wholly Foreign-owned enterprises (WFOE Shanghai). Each one of them comes with their own limitations and benefits.


Planning To Set Up A Business in Shanghai? 4 Steps To Follow

There is no doubt in this fact that China is one of the fastest growing countries where investors can find a large number of opportunities.

So if you want to start your own business in Shanghai and think that it’s going to be easy, then it is important to know that it requires a lot of time, efforts, and hard work. If you think that you’re ready to start your first business, here’s a step-by-step overview that you need to follow:

Wfoe Shanghai

1. Build A Business Plan

To make a perfect business plan, you need to ask yourself a few important questions: What is the purpose of your business? What is your targeted audience? What are your end goals? How will you finance your startup costs? Once you get the answer to all these questions, you’ll able to build a better business plan.

2. Determine Your Legal Business Structure

Before you can register your company, you need to decide what kind of entity it is. Your business structure legally affects everything from how you file your taxes to your personal liability if something goes wrong. If you own the business entirely by yourself and plan to be responsible for all debts and obligations, you can register for a sole proprietorship.

3. Choose The Entity Status

Before you get to register with the government, you need to decide what type of business entity to register. The most common for foreign businesses are joint ventures, representative offices and wholly foreign-owned enterprises (WFOE Shanghai).

4. Find A Liaison Officer

No matter how informed you are, you won’t get very far without consulting a representative to register your business. With the help of your liaison officer, you can easily cope up with the legal formalities and able to register your company more easily.


Important Things To Consider While Setting Up Business in China

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.