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8 STEPS TO START A BUSINESS IN CHINA Part I
发起人:wangjinmeng  回复数:1  浏览数:8850  最后更新:2022/9/27 12:37:26 by nihaosb

发表新帖  帖子排序:
2019/3/29 10:28:21
wangjinmeng





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8 STEPS TO START A BUSINESS IN CHINA Part I
8 STEPS TO START A BUSINESS IN CHINA Part I



1. What is a China WOFE?The most obvious way for foreigners looking to do business in China is to set up a Wholly Foreign Owned Enterprise, abbreviated as WOFE or WOFE.

A Wholly Foreign Owned Enterprise is a limited liability company, also know as LLC, that is fully owned and capitalized by foreign investors and operated without a local Chinese partner. This provides you with greater control over your businesses operations, revenue and profit targets. A WOFE is the favorable option for an both individuals or overseas company that wants to enter the Chinese market.




2. Types of WOFE categoriesA WOFE is a commonly used investment vehicle for mainland China-based businesses and it can be roughly classified into:

China Trading WOFE



Importing and Exporting

Purchasing Products for Export

Selling in China Local Market

Claiming VAT Tax Back

China Consulting WOFE / China Service WOFE:



All types of Consulting Services

Overseas Investment Consulting

Issue ” Fapiao” Tax Invoices

China Food & Beverage WOFE



Coffee Shop or Restaurant

Food Import & Export

Wine or Alcohol Import & Export

China Local Food sales

China Manufacturing WOFE



Set up a Factory

Manufacture products for export

Assemble products

Engineering Factory





3. What are the Advantages and Disadvantages of Registering a WOFE?In one hand, the majority of companies coming to China brainstorm on the sales strategy part of the plan of how to explore and conquer such a huge market. But on the other hand, some might overlook the fact that in order to successfully operate the new company, choosing the right structure is crucial to truly achieve a solid expansion. To better help on your decision process, here is a list with some of the key factors that makes a WOFE one the best options in China.

– Independence and freedom to implement the worldwide strategies of its parent company without having to consider the involvement of the Chinese partner; Take control, be the boss.

– Ability to formally carry out business rather than just function as a representative office and being able to issue invoices to their customers in RMB and receive revenues in RMB;

– Capability of converting RMB profits to US dollars for remittance to its parent company outside of China; Working in China and not being able to enjoy the outcomes of your work out of China? Not what most would want for themselves.

– Protection of intellectual know-how and technology in China;

Imagine you start operations in China and suddenly realizes that someone else holds the trademark of “your” brand. Don’t let that happen to you.

– For Manufacturing WFOE, no special requirements for Import / Export license for its own products; Always good to save time and efforts.

– Full control ofhuman resources

, greater efficiency in operations, management and future development.


In addition: no need of minimum registered capital, no need of office rented, and no need to physically come to China to start it.

Here are some of the potential disadvantages:

Setting up a WFOE does not mean that you can engage in any type of business activity, as is the case in some Western countries. In China, WFOEs can only operate within the business scope initially approved by the authorities. Business operations other than those initially authorized are subject to further approval by the relevant authorities. Hence, it is vital to determine what you want to do from the onset.

Setting up a WOFE can take from 2 to 3 months.






4. How Does a WOFE Compare to Other Types of Companies?Setting up a WFOE in China means independent control of management and the ability to carry out worldwide strategies. In addition, it provides a legal status to protect know-how and technology, full control of human resources, great efficiency in operations, and self-financing…

If your business strategy in China just covers market survey, technology communication, and other indirect business activities, then a Representative Office is a more suitable option in your case. Unlike a WOFE, a RO is not considered to be a separate legal entity from the parent company and thus cannot carry out direct revenue earning business activities. Since it cannot enter into purchase/sales contracts and cannot receive payment for products or services, it cannot generate any income by itself, issue invoices or repatriate money overseas.

Another way to enter the Chinese market is via a Joint Venture (JV). In China, a JV is a form of enterprise created through the partnership between foreign and Chinese investors. The joint venture partners share the profits, losses and management of the JV. If you want to acquire the intangible assets of a JV (such as brand, etc.) and marketing channels, then a Joint Venture in china is also the right choice for your business.

[size=medium]For more information, please feel free to contact us.



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2022/9/27 12:37:28
nihaosb





角  色:普通会员
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