WFOEs are the most popular business structure for US companies looking to establish a Chinese subsidiary. To set up a WFOE, you’ll need to prepare all legal documents — including articles of incorporation, audit reports, and letters of authorization — open bank accounts in China, and find a legal representative.
Does China allow wholly owned subsidiary?
11 – A wholly foreign-owned enterprise (WFOE) is a company established in China according to Chinese laws and wholly owned by one or more foreign investors. … After joining the World Trade Organization in 2001, WFOEs were allowed in consulting and management services, software, development and trading.
How much does it cost to set up a WFOE in China?
Typically, setting up a WFOE in China with this type of firm will cost around RMB10-20,000. Unlike large international firms, these companies care about and need your business, and so are likely to make a great effort to please clients at every turn.
Can I create a subsidiary?
An existing company, or parent, can create a new company as an independent subsidiary at any time with the approval of management. … Accordingly, the startup process for a subsidiary is the same as it would be for any company, namely drafting and filing the appropriate formation documents with the state.
How do you form a foreign subsidiary?
DIR-2 declaration from first Directors along with Copy of Proof of Identity and residential address. (Duly apostille or notarized in country of origin). Declaration from the foreign subscribers in respect of not having PAN. (Duly apostille or notarized in country of origin).
Can a US company own a factory in China?
No American or European or Australian company (or any other non-Chinese company) can own a Chinese factory directly.
Can foreigners own factories in China?
Can Foreigners Own Companies In China? The answer is, “yes.” They can own companies by incorporating them in China. For example, a foreigner can incorporate a wholly foreign-owned enterprise (WFOE), open a joint venture, or start a representative office.
How do I set up a foreign company in China?
10 Steps to Open a Foreign Invested Company in China
- Submitting your Chinese name for pre-registration (approved by SAIC)
- Register and obtain the Approval from the Ministry of Commerce (MOFCOM)
- Choose your Business Scope.
- Sort out your documents to obtain the Chinese Government Approval.
How do I set up a factory in China?
Setting Up Your Own Factory in China: The Basics
- Find the best location. The search for a good location should be started as soon as possible. …
- Form a WFOE. Once the location has been determined, the foreign company will be required to form a Chinese legal entity, or WFOE.
Is it easy to start a business in China?
As you could see, starting a business in China is not so easy, especially for many small and medium companies that many times don’t have the resources to deal with company formation, taxes, HR, regulations. In China, it is possible to start a business in an easier and low-risk way.
Do subsidiaries need to be registered?
If the company makes the business line a subsidiary, the company may also decide to incorporate it as a legally separate entity. The decision rests with the business owner or parent company, as subsidiaries aren’t legally required to be incorporated.
How do you get a subsidiary?
To purchase a subsidiary, your company must be legally structured as an independent entity that has the power to hold the ownership interest in another company in its own name, such as a corporation or LLC.
Can LLCs have subsidiaries?
An LLC subsidiary can be an excellent way to organize your business. The subsidiary provides a way for your LLC to expand and grow while still maintaining the same organization as the parent company.