As located at the geometrical center of China, Chongqing has become a transportation hub on the upper reaches of Yangtze River. Chongqing extends its highway in all directions; Chongqing Jiangbei International Airport, one of the top ten airports in China, and the largest port on the upper reaches of the Yangtze River are both located in Chongqing. The completed Three Gorges Project improves the navigation capacity. Through the golden waterway, Chongqing is directly linked to the rivers and seas.
Once an old industrial base, Chongqing has
rapidly emerged as one of the fastest growing and fastest urbanising cities in
China and, according to some reports, the world. Located in China’s west, the
municipality of Chongqing boasts a population of over 30 million (one of the
largest in China) and a GDP growth rate of 11% year on year (also one of the
fastest of China). It is also the centre of China’s ‘Go West’ Strategy which
has created a unique business and investment environment for foreign companies.
Despite its profile, Chongqing still remains largely unknown to the West who
often look to Beijing and Shanghai when entering the China market. For foreign
companies wanting to launch into the China market, we believe that Chongqing
should be there next destination.
WFOE stands for wholly foreign owned
enterprise, which is a limited liability company wholly owned by either a
foreign legal entity or a foreign natural person. The foreign investors may be
foreign enterprises or individuals.Wholly owned foreign entities (WOFEs) are the
vehicle of choice for most people and companies doing business in China. It is
less complex than a joint venture (JV) and allows you to concentrate on what
your employees are up to as opposed to your partners. It is required to
register as a legal person who is restricted to certain businesses. The
enterprise is able to implement strategies that effectively conform to the
interests of the parent company aboard. Moreover, technology and know-how are
given better protection.
No. minimum registered capital is required for WFOEs with scope of business of consulting, Trading, retailing, information technology etc. in China. There are minimum registered capital still required for some industries for instance: Banking, Forwarding etc Since China still maintains foreign currency control policy, it's still advisable to choose registered capital within RMB 100,000 ~ RMB 500,000 as the minimum registered capital. 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 10 years.
Advantages of WFOE
1. Independence and freedom to implement the worldwide strategies of its parent company without having to consider the involvement of the Chinese partner;
2. Ability to formally carry on business rather than just a representative office function;
3. Issue invoices to their customers in RMB and receive RMB revenues. Convert RMB profits to US dollars for remittance to their parent company outside.
4. cheap labor, which can lower your cost;
5. not required to share profits with Chinese counterpart;
6. Greater efficiency in its operations, management and future development.
The procedure to Setting up WOFEs in Chongqing
China
Stage 1: Preliminary approval - Project
Proposal
The application procedure for setting up a
WOFE is simpler. The project proposal will be prepared by the foreign investors
and submitted directly to local authorities. The foreign investor may appoint a
local agent to liaise with the government. To do so, he has to sign an
authorization letter stipulating the agent’s scope of services, responsibility
and fees.
Generally, the authority will give an
official reply within 30 days upon receipt of the proposal and other relevant
documents. The approval or rejection letter will be issued to the foreign
investor. If a favorable reply is received, the foreign investor can proceed to
register the company’s name at the local AIC.
The report must contain information regarding
the objectives of the WOFE, business scope, scale of operation, products to be
produced, technology and equipment to be used, land area required, conditions
and quantities of water, electricity, gas and other forms of energy resources
required, and requirements for public facilities.
Stage 2: Formal approval - Articles of
Association
After the foreign investor receives a written
reply from the relevant government authorities, a formal application supported
by all the required documents should be filed with the local Ministry of
Commerce at a county, municipal or provincial level. After receiving the formal
approval, the foreign investor should apply to the Ministry of Commerce again
for an approval certificate by presenting all the necessary documents.
The required documents include the
application letter for establishing the WOFE; a feasibility study report (if
any), articles of association, list of legal representatives (or Board of
Directors), the foreign investor’s legal papers and credit report, a list of
materials to be imported, written replies from the local approval authorities
at county level or above, application for registration of the name of the
enterprise approved by the provincial or municipal administration AIC, comments
on the project by various government departments such as environmental
protection, fire services, health and land administration. In the case where
two or more foreign investors are involved, copies of the contracts signed by
them should be submitted to the approval authority for their records.
Stage 3: Business License
Upon collection of the approval certificate,
an application for a business license has to be filed with the provincial or
municipal AIC within 30 days. The local AIC will issue the business license
within 10 working days to projects that have passed the examination. Likewise,
the date the business license is issued will be considered the official date of
the establishment of the enterprise.
Having acquired the business license, the
WOFE has to finish up with procedures such as applying for an official seal and
enterprise code, opening a bank account, and registering for tax payment and
customs declaration with the local public security, technical supervision,
taxation, customs, finance, foreign exchange administration, banking, insurance
and commodity inspection departments.
Compared to registering a business in most
Western countries, registering a business in China is challenging work filled
with paperwork and bureaucratic red tape. It is practically impossible to
properly complete the registration process without a qualified agency. Be sure
that the agency is qualified and the agency has good connections and
relationships with the various local authorities, and that they possess
comprehensive knowledge about the numerous important aspects involved with
legally and properly registering a WFOE
Tommy China BusinessConsulting has
direct connections in the local government
Since 2006, TCBC has been focusing on consulting services for our clients to invest in Chongqing China, . We are specialized in establishment of wholly foreign owned enterprises (WFOEs), setting up of offshore companies, trading services, tax minimization Assist in obtaining government approvals and certificates for running business, negotiate and draft various legal documents provide legal advice, negotiate government officer for Land acquisition,Advising on formation of WOFE and business structures ,managing and controlling WOFE in Chongqing China, , drafting privacy policies and structuring commercial transactions. TCBC will manage all aspects of incorporation to get you a business license in Chongqing China. We offer a range of company formation services including helping you to set up:
Since 2006, TCBC has been focusing on consulting services for our clients to invest in Chongqing China, . We are specialized in establishment of wholly foreign owned enterprises (WFOEs), setting up of offshore companies, trading services, tax minimization Assist in obtaining government approvals and certificates for running business, negotiate and draft various legal documents provide legal advice, negotiate government officer for Land acquisition,Advising on formation of WOFE and business structures ,managing and controlling WOFE in Chongqing China, , drafting privacy policies and structuring commercial transactions. TCBC will manage all aspects of incorporation to get you a business license in Chongqing China. We offer a range of company formation services including helping you to set up:
-Wholly Foreign Owned Enterprises (WFOE )
-Representative Offices
-Joint Ventures (Equity/Co-operative)
-Foreign Invested Partnership Enterprises (FIPE)
-Hong Kong Holding Company
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