Guangzhou Company Formation (WFOE)

Definition of WFOE

The Wholly Foreign Owned Enterprise (WFOE) is a limited liability company wholly owned by the foreign investor(s).The foreign investor(s) can be a nature person or a legal entity. Investor(s) from Hong Kong, Macau, Taiwan is also defined as the foreign investor(s).

Company Name

Company name of WFOE consists of four parts which are administrative division, name, Industry expression and limited. Your Guangzhou company name must be unique in the same industry and administrative division .Company name is related to register capital and business scope. For some sectors such as education, logistics, medicine and food industries, a special pre-approved license is needed. Only with 10 million, the word Guangdong can be registered. If the word “China” is within the company name, it is required to be pre-approved by SAIC (State Administration for Industry and Commerce).

Company Business Scope

One of the most important issues in WFOE application is business scope. Business scope needs to be defined and the WFOE can only conduct business within its approved business scope, which ultimately appears on the business license. Any amendments to the business scope require further application and approval.

Registered Capital and Paid-Up Capital

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. The amount of registered capital needed depends on factors like industry, scope of business and 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 the business license is issued, 15% of the registered capital should be paid up during 3 months, with the balance being remitted within 2 years. All of the registered capital can be paid in one time or several times, fewer times, fewer capital verification fees are needed.

Shareholder, Legal Representative, Supervisor, Director and Manager

1.      A shareholder could be a nature person (foreign individual) or a legal entity (foreign company)

2.      The legal representative represents the interests of the enterprise as a legal person，exercises legal right in accordance with the will of the enterprise. An enterprise as a legal person endows the legal representative with authority, assumes civil liability for the normal activities of legal representative.

3.      Supervisor’s duty is that check the company’s financial condition; supervise executives’ behavior of performing his duties, propose suggestions on dismissing any director or senior manager whose behavior is contrary to laws and regulations, articles of incorporation or shareholder meeting resolution, etc.

4、Directors, the manager and financial officers shall not serve concurrently as supervisors，while the director, the manager and legal representative could be the same person.

Documents Required

1、3x 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.

2、2x original Bank Reference Letters from investor’s bank (declare a good standing)

3、The latest annual audit report copy from the parent company provided by a Certified Public Accountant (CPA) (For the parent company established over one year)

4、Office address in China, 2x original leasing contracts, 2x copies of 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、Passport copy or ID card of: (i) Parent company's director (ii) Guangzhou Company's Legal Representative (iii) Guangzhou Company's supervisor (iv) Guangzhou Company's director and (v) Guangzhou Company's manager

6、Guangzhou Company's Legal Representative provides: 6 photos (2 inches size),

7、Registered capital; Business Scope; 6 proposed Chinese names of Guangzhou Company

Government Processing Procedure

1、Name registration with Guangzhou Administrative Bureau of Industry and Commerce

2、Approval application from the Fire and Environment Bureau for manufacturing industry

3、Pre-approval for some special industries

4、Certificate of Approval issued by Bureau of Foreign Trade and Economic Cooperation of Guangzhou Municipality

5、Business License issued by Guangzhou Administrative Bureau of Industry and Commerce (GZABIC).

6、Apply for stamps with the Public Security Bureau

7、Organization Code License issued by Quality and Technical Supervision Bureau

8、Tax Certificates issued by National & Local Tax Bureau

9、Foreign Exchange Registration Card issued by State Administration of Foreign Exchange (SAFE)

 10、Apply for the permits for the bank account opening，open foreign currency and RMB account

 11、Financial Registration Certificate issued by Finance Bureau

Processing Time for WFOE

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

2、Trading and service enterprise: 50-80 working days

Service, Fee and Terms of Payment
1、Webond package services for WFOE formation include:
Company name check and confirmation；Document preparation for application purposes, such as a feasibility study report, M&A, etc.；Certificate of Approval；Business License；Having a corporate seal engraved by the public security authorities; Organization Code Certificate ；Digital Certificate of Organization Code Certificate；National Tax Certificate；Local Tax Certificate；Foreign Exchange Registration Certificate；Assist bank opening, but not including the bank charges；Permit of bank account opening；Finance Registration Certificate；Company stamp, financial stamp and personal stamp of legal representative. All the certificates above include original one and duplicate one.

2: Terms of payment: applicant can pay by cash, check or T/T to Webond’s bank account before the service begins.

General Tax Information

All enterprises are required to report to the Tax Administration Department monthly, quarterly and annually. Webond provides 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.

Follow-Up Service of WFOE

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

2、Business license alteration

3、Import and export license application

4、General tax payer application

Webond 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.