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  • Guangzhou WFOE Registration
  • Author Date Time:2010-03-30 09:05:32
  • Compass Consulting limited provide professional and one-stop service to you for Guangzhou Wholly Foreign Owned Enterprise formation and management. The detail information is as follow.


    Concept of WFOE

    Wholly Foreign Owned Enterprise (WFOE) is a limited liability company wholly owned by either a foreign legal entity or a foreign natural person. The foreign investor(s) can be foreign enterprise(s) or individual(s).


    Company Name

    The name of Guangzhou WFOE should be in Chinese. It consists of four parts, administrative division+ name+ industry expression+ limited, e.g. Guangzhou compass consulting limited. Company name should conform to the registered capital and business activities. Your company name must be distinguished from the other registered names. If the word “Guangdong” is within the company name, the registered capital should be 10 million RMB. If “China” is within the company name, it is required to be pre-approved by ICAB at national level in Beijing.


    Registered Capital & Paid-up Capital

    Registered capital is the amount for running a company’s business, which can be used by the company. The government has minimal registered capital is only for reference. 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, at least 15% of the registered capital should be paid up during 3 months. The rest of registered capital should be paid 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.


    Business Scope

    The WFOE can conduct business according to its approved business activities described on the business license. Business scope is affected by varied business names and registered capital.


    Shareholder(s), Director(s), Legal Responsible Person, Supervisor

    1, The shareholder are investors of a company, which can be natural person or legal entity. The shareholder can be one or more, but not over 50.

    2, The director could be acted by a foreign person or a Chinese person,above18 years of age.

    3, The legal responsible person is responsible for a company’s business activities and exercises legal right in accordance with the will of the enterprise. A company has only one legal responsible person.

    4, Supervisor should be appointed to supervise the company’s operation and management.

    Attention: Director, shareholder and legal responsible person can be the some person. While the supervisor and the legal responsible person could not be the same person.


    Required Documents for WFOE registration

    -----prepared in oversea

    1. For company investor---Three copy of the business license or certificate of incorporation of invest company;

    For individual investor----Three copy of investor’s passport copy with signature on it.

    2. For company investor---Three original Certificate of Incorporations, Articles of Incorporation or Equivalent document notarized by local lawyer and endorsed by Chinese embassy or consulate.

    For individual investor---- Three original Passport copies of Investors need be notarized by local lawyer and endorsed by Chinese embassy or consulate.

    3. Two original bank reference letters (from investor's bank) indicating foreign investors' creditability, issued within 6 months.

    4, Five passport copy with signature on it for directors, legal responsible person and supervision.


    -----prepared in Guangzhou

    1. Confirm company name (in Chinese), business scope and registered capital.

    2. The lease contract between leaser and lessee needed to be endorsed by the Housing Management Authority. The lesser should be acted by shareholders, directors, legal representative, monitors or manager. The area is required no less than 30 ㎡ and for commercial or office use only with more than one year’s rent.


    Working Procedure:

    Step 1, Enquiry and Consulting

    Step2, Fill out the application form, sign the agreement and arrange advance payment

    Step 3, Prepare statutory documents for investors to sign personally.

    Step 4, Forward documents to related government department

    Step 5, Keep clients informed of the processing.

    Step 6: Fulfill the agreement and settle accounts

    Step 7, Hand over all the company kit to clients, and sign the receipt.


    Compass Service

    7 copies of Approval document; 2 copies of original articles of association signed by members of the Board and with company chop; 2 copies of certificate of approval; Both original and duplicate copy of business license; 3 stamps for different use; Stamp carving registration card; Bank account documents; Both original and duplicate copy of Organization Code License & card; Registration license and form of National &Local Administration of Taxation; Foreign exchange registration license and approval certificate; Customs declaration registration certification; Financial Registration For Enterprises With Foreign Investment.


    Needed Time

    For the trading and service enterprise: 50-80 working days

    For manufacturing enterprise: 50-70 working days


    WFOE Taxation

    1. Overview of Taxation in China
    The Tax System in China has undergone tremendous changes in recent years. Currently, there are 24 different types of tax imposed on a wide range of incomes and transactions. Taxpayers can be individuals, entities or economic organizations. To fulfill its WTO commitments, the Chinese government is currently preparing for another round of tax reform, which is expected to take place in 2010. Keeping place with compliance obligations in such a rapidly changing regulatory environment can be a major challenge. You are advised to seek professional advice from ATAHK regarding your particular circumstances.
    2.  Business and Taxation in China

    Any investors, who want to succeed in their business-doing in China, are strongly advised to better understand tax departments, tax categories, tax rate and official invoices in China.

    As far as China tax department is concerned, China has two functional tax departments: national tax department (NTD) and local tax department (LTD), the former is for national use while the later is for local use. In every city or town there are national and local departments. Any person can contact these departments for information. Taxpayer should know which tax department to go to and the tax rate before tax return, here are some guidelines for you:  Value Added Tax should be paid to NTD at rate of 0-17% monthly, Business Tax to LTD at rate of 3-20% monthly, Individual Income Tax to LTD at rate of 5-45% monthly, Enterprise Income Tax (EIT) is 25% to NTD at basis of quarterly return and annual renew,

    3. China Tax Category and rate

    The China tax could be classified as follows: Value Added Tax (VAT) at rate of 0-17%, Business Tax (BT) at rate of 3-20%, Enterprise Income Tax (EIT) at rate of 25%, Individual Income Tax (IIT) at rate of 5-45%, Consumption Tax by customs (CT) at rate of 3-5%, Resource Tax (RT), City Maintenance and Construction Tax (CMCT) at rate of 1%, House Property Tax (HPT), Stamp Duty (ST) at rate of 0.5-1%, Urban and Township Land Use Tax (UTLU)

    4. Tax Return

    Tax Return should be done monthly, quarterly and annually, Tax is collected on the basis of invoice volume, in China the invoices are granted from the NTD or LTD,

    5. Tax Rebate China government is stimulating its economy by encouraging export-orientated businesses; Any exporters can enjoy the export tax rebate as high as 17% according to their categories.



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