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Guangzhou Wholly Foreign Owned Enterprise (WFOE) Registration
Information provider:zanya consultants    Updated:2014/10/23    Website:www.companyformation86.com

Concept of Guangzhou WFOE

 

Guangzhou WFOE stands for Guangzhou Wholly Foreign Owned Enterprise, is a limited liability company wholly owned by either a foreign individual a or foreign legal entity. Hong Kong-, Macao-, Taiwan-, investors is also included.

 

Advantages of Establishing a Guangzhou WFOE

 

1. Ability to formally carry out business rather than just function as a representative office which is restricted in many ways.

2. There is no requirement for investors to be established for over 2 years while parent company of Representative Office should as least has 2 years history.

3. Protect Intellectual property and Independent technological patents

4. Greater efficiency in management, operations and future development

5. Ability to receive RMB revenues and issue official invoices.

6. Legal profits, lawfully-earned income and funds after liquidation can be remitted abroad.

7. Able to convert RMB profits to US dollars for remittance to its parent company outside of China

 

Guangzhou WFOE Company Name

 

Not every name will be accepted by local Administration for Industry and Commerce in China. The name of each WFOE shall be unique and not be the same with or similar to the registered name in the same industry. The official company name of a WFOE in China should be in Chinese, while English company names are for reference only.

 

The Chinese name is divided into four parts, first part is name of city (for example: Guangzhou), second part is company name (for example: ZYC), third part is Sector Expression (for example: trade), and fourth part is type of company (for example: limited).With that an enterprise called ZYC set up in Guangzhou engage in trade business will be called Guangzhou ZYC trade limited.

 

If the words "investment" or “international” within a company name, the registered capital should be more than RMB 10 million, the use of the word 'China' in a company name, it is required to be pre-approved by ICAB at national level in Beijing.

 

Business Scope of Guangzhou WFOE

 

Business scope is one of the most important issues in WFOE registration application, divided into the licensed business item and the general business item. Licensed business item means a pre-approval is needed before business license application. General business item means ordinary item which can be registered in Bureau of Industry and Commerce directly.

In China, Business scope of a business is a "one sentence description" covering all of the present and future activities of the WFOE; In China, Business scope of a business is a "one sentence description" covering all of the present and future activities of the WFOE; It is essential this encompasses every envisaged scope of future activity. Guangzhou Wholly Foreign Owned Enterprise (WFOE) can only conduct business within its approved business scope, which ultimately appears on the business license. Any alteration to the business scope requires further application and approval. There is some connection between business scope and register capital. Generally speaking, larger register capital, more business items can be approved.

 

Registered Capital and Paid-Up Capital  of Guangzhou WFOE

 

The minimum registered capital could be as low as RMB 30,000 in China. But registered capital is the amount that it’s required to run the business until it can break even - the 'minimum registered capital' is a guideline only, thus it is impossible to establish a WFOE with RMB 30,000 which means you will run out of money pretty soon, which leads to increased costs in reapplying for permission to increase capital. The amount of registered capital needed depends on factors like industry, scope of business as well as location. Generally speaking, for manufacturing and trading enterprise, the registered capital is required RMB 1 million or above. For service enterprises, such as consultancy, technology, market research and development, the registered capital is usually required RMB 500, 000 or above. Once business license is issued, 15% of registered capital should be paid up during 3 months, with the balance being remitted within 2 years. All the registered capital can be paid in one time or several times, fewer times, fewer capital verification fees are needed.

 

Shareholder, Director and Manager, Legal Representative, Supervisor

 

1. Shareholder must be foreign investors (companies or individuals), including Hong Kong-,

Macao-, Taiwan-, investors.

2. Director and Manager can be the same person, acted by shareholder, non-shareholder, foreigners or Chinese.

3. Legal representative is a very important position, represents the interests of enterprise as a legal person, acted by director, manager, shareholder or non-shareholder.

4. Supervisor shall not serve concurrently as legal representative and senior management, acted by shareholder, non-shareholder, foreigners or Chinese.

 

Needed Documents for a Guangzhou WFOE Registration

 

1. 2x Original Bank Reference Letters from investor’s bank (declare a good standing).

2. 2x Original Certificate of Incorporations, Articles of Incorporation or Equivalent document notarized by local lawyer and endorsed by Chinese embassy or consulate. For individual investor: 2x original Passport copies of Investors need be notarized by local lawyer and endorsed by Chinese embassy or consulate.

3. The latest annual audit report copy of Investor Company provided by a Certified Public Accountant (CPA) (For foreign companies established over one year)

4. Certificate of Guangzhou Company domicile: 2x original leasing contracts, 2x copies of house property certificate with company stamp or signature of lesser and 2x landlord identification documents (The lessee should be acted by legal representative or investor. The area is required no less than 30 ㎡ and for commercial use only with more than one year’s rent and the lease contract should be endorsed by local Housing Management Authority)

5. ID or passport copy of directors, supervisors and managers

6. ID or passport copy and 4 photos (2 inches size) of legal representative

7. Appointment letter for legal representative, directors, supervisors and managers

8. Letter of authorization for service of legal documents

9. Other relevant documents and certificates;

 

Guangzhou WFOE Registration Procedure

 

Step 1: Name Pre-registration with Guangzhou Administrative Bureau of Industry and Commerce

Step 2:Pre-approval document or certificate for some special industries

Step 3: Approval application from Fire and Environment Bureau for manufacturing industry

Step4: Certificate of Approval issued by Bureau of Foreign Trade and Economic Cooperation of Guangzhou Municipality

Step 5: Registration for Business License

Step 6: Carving of Company Chops

Step 7: Registration for Organization Code License

Step 8: State tax certificate registration

Step 9: Local Tax certificate registration

Step 10: Registration and Approval with State Administration of Foreign Exchange (SAFE)

Step 11: Bank account opening including foreign currency and RMB

Step 12: Finance Registration

 

Processing Time for Guangzhou WFOE

 

1. Service enterprise: 50-70 working days

2. Trading enterprise: 50-80 working days  

3. Manufacturing enterprise: 50-70 working days (the time of approval papers application from the fire & environmental protection bureaus is not included)  

 

General Taxation Information

 

The Tax System in China has undergone tremendous changes in recent years. Currently, there are 24 different types of tax imposed on a wide range of incomes and transactions. Taxpayers can be individuals, entities or economic organizations. Since Jan. 2008, China's new corporate tax rates range from15% to 25%. (The rate depends on the places where the company is registered and the industry that a company engaged). To fulfill its WTO commitments, the Chinese government is currently preparing for another round of tax reform, which is expected to take place in 2010.

ZANYA provides part time accounting services for our clients; you are welcome to contact us for more information.

 

Annual Audit Report  

 

Any limited companies in China should summit annual audit report to the relevant authorities. Any company will be subject be to a fine if the Annual Audit Report is not submitted in a timely manner.

 

Profit Repatriation Procedure and Requirement

 

According to Articles of association of Foreign Invested Enterprise

Chapter Eight: Taxation, financial accounting, profit distribution

Article twenty-seventh: The Company distributes the annual after-tax profits; allocate ten percent of its profits to its statutory reserve fund. Once the accumulated amount of the company’s statutory reserve fund equal to fifty percent or above of company register capital, the profit can no longer be extracted.Before company loss is made up and statutory reserve fund is extracted, the profit should not be distributed. Repatriating the Registered capital to home countries is forbidden during the term of business operation.

 

Follow-Up Service of Guangzhou Wholly Foreign Owned Enterprise

 

1、General tax payer application

2、Guangzhou Export Tax Refund Application

3、Import and export license application

4、Business license alteration

5、Apply Capital Verification Report with Certified Public Accountant (CPA) (after Inject capital from investor’s overseas bank account).

ZANYA provides a series of business follow-up services such as, monthly bookkeeping and tax return, internal auditing, financial planning and tax layout, and China policy & market study. Other services include domain name registration, webpage design, website promotion, China trademark registration, Work Permit, Residence Permit, etc.

 

For further information or assistance, please feel free to contact us

 

Tel: (86.20); 61062981         Mobile: 13928789801 (You can inquire in English)

Fax: (86.20); 61062925         E-mail: info@zanyaco.net

Msn: zanyaco@msn.com        Skype: zanyaco                  

QQ: 1502027480             Website: http://www. companyformation86.com

Address: Room 1001, No.621, Tianhe Road, Tianhe District, Guangzhou, China

 

 

 

 

 

 

 

 

Zanya Consultants

Tel: (86 20) 61062981

Fax: (86 20) 61062925

Mobile: (86) 13928789801

Email: info@zanyaco.net

Skype: zanyaco

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Tianhe Dis., Guangzhou, China


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