Monday, June 24, 2024


How To Set Up A WFOE In China – A Beginner’s Guidebook!

A Beginner's Guidebook



Who does not know that China has a clear advantage when it comes to manufacturing in China. China, for some great reasons, went on to become the factory of the world. Every now and then, ships stuffed with finished goods are deported to the Chinese ports. They proudly make for the world.

No other country beats China in the segment of price. No matter why entrepreneurs like to set up manufacturing units in some Chinese cities to leverage.

Do you also want to establish a manufacturing unit in China?

Want to ride the growth express?

Well, you need to have a thorough understanding of the WFOE set in China. In this article, we are going to discuss the steps that you need to follow for a WFOE set up China. Come, let’s understand these in detail.

Advantages Of Using Wfoe In China

According to inferences, the number of SMEs in China in 2020 is set to increase by about 10.9 percent. When you are using WFOE in China, you are definitely getting some benefits for sure:

  •       This is good, especially when you are targeting a long-term presence in China.
  •       Here, you enjoy total control over each and every minute decision in a company.
  •       You can engage in all the activities, and there will be no such bar.
  •       If you are engaged with WFOE, this facilitates the protection of patents.
  •       With the WFOE registration, you don’t really need to share profits with your partners.
  •       When you are hiring companies, you can have your own say, and you can work freely according to your own requirements.

These are the elements that you need to keep in mind when you are opening a WFOE business in china.

A Step-By-Step Guide To Opening Wfoe In China

If you are opening a WFOE in China, you need to follow certain steps to do it. We all know that if you open a manufacturing plant in China, you will earn quite handsomely. The government in China provides a great many facilities so that you don’t find any problem running a wholly foreign-owned enterprise ( WFOE). So let’s discuss the steps that companies follow in order to open a wholly foreign-owned business enterprise in China. You, being a potential investor, are advised to enlist some professional assistance.

Step 1: Name Approval

In order to apply, you need to keep abreast with the guidelines of Regulations on Registration and Management of Enterprises Name. The laws and regulations are put in detail on how a company should be structured. This includes:

Administrative region name.

  •       Brand name.
  •       Industry of Business.
  •       ‘Company Limited.’

While you are opening a foreign enterprise, remember, you can not keep words like “China,” “Chinese,” “National,” or “State.”While designing a logo, you can not use some special characters like Arabic numerals, foreign alphabet, or symbols.

Whatever name you give, make sure that it is consistent with the preexisting brand strategy. If you use some Chinese alphabet, please pay heed to the nuances.

Step 2:Office Facility

You will have to lease the space of your company from the concerned authorities. Make sure that you are leasing for legal operations in China. You are to prepare the lease well before submission. Also, remember that the rental period needs to be 12 months starting from the date of submission of the application. Don’t be so lenient with the formatting of the entire paper. This is important.

Step3: Environment Impact

Your manufacturing or other business is structured on the impact on the environment. This means the plant that you are making causes a “significant” impact, “moderate” or “small” impact.

This will determine whether you need to provide some “statement,” “report,” or “registered forms”.

Step 4: Five-In-One Business Licence

When you receive the MOFCOM certification, you can now go for the licence. For setting up any plant, you need to procure a business licence. Previously it used to be a three-in-one Licence. But now, it is a five-in-one licence. This standardised Credit card will have:

  •       Social security registration certificate.
  •       Statistical registration certificate.

Step 5: Carving Chops

The official seal in China has legal authority and the power to validate important testimonials, documents, and contracts.

If you are operating a company in China, you need to have a valid official seal. This bears the official name of the company in the Chinese language. Only having an official seal is not enough; you also need to have a financial seal, a legal representative seal, and a seal for use in fapiao. You need to keep your connections with the company’s financial officers, which safeguards all the seals. You need to have a strong mechanism to track each and every development.


Apparently, it may look like you need to go through a good many steps in order to own your dream WFOE. But in China, the officials sit with red carpets and work to reduce your burden.

What is just required is the right intent for opening up your business. You also need to show some  disciplined approach by s working according to the state’s rules, regulation and guidelines.

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