Incorporating a WFOE in China: Special Benefits for Entrepreneurs


If your company is underperforming back home or you want to achieve exponential potential, one of the best options for success is registering it in an offshore jurisdiction. China stands out as an investment destination because of its rapidly growing economy.

Following the reforms initiated back in 1979, the Chinese economy has been growing at an average rate of 10% per annum and is showing no sign of slowing down. This makes it an excellent time to join and see your firm burgeon into a multinational. To do this, you require a good investment vehicle, and a wholly foreign-owned enterprise, simply known as WFOE China, is the best. 

Keep reading to learn more about WFOs and unique benefits to anticipate for going offshore into China. 

What is a WFOE?

As the name wholly foreign-owned enterprise (WFOE) suggests, it is a type of company where the foreign owner(s) has 100% shareholding. It is the most preferred type of company because it provides the owner or parent company full autonomy over the offshore firm. Although initially created to support manufacturing, China changed its stand after the entry into the World Trade Organization. Now, you can set up a WFOE in almost every industry. 

There are three main categories of WFOEs that you can form in China: 

Manufacturing WFOEs:

If your business involves processing or developing new products, from industrial machinery to pharmaceuticals, the best company structure is a manufacturing WFOE in China. The process of registering a manufacturing WFOE is the most stringent because of the parameters involved. For example, you have to provide a comprehensive plan for waste management and carbon footprint reduction. 

Consulting WFOEs

These are best suited for investors targeting to offer services to other companies, institutions, government departments, and individuals. Consulting WFOEs are the simplest to create, especially when no specialized pieces of equipment are needed. 

Foreign-Invested Company Enterprise (FICE)

This type of company provides investors access to export & import licenses and allows them to trade via local retailers. These firms are required to be created at the provincial level, not locally like other models. 

Special Benefits of Opening a WFOE in China

Opening a WFOE offers your enterprise an excellent chance to take advantage of the large Chinese market. If your local market is shrinking, China is offering you a bigger one of more than 1.4 billion people. Here are other special benefits associated with incorporating a WFOE in China. 

Favorable Government Policies 

Over the last few decades, the Chinese government has intensified its focus on installing and enforcing pro-business policies. As a WFOE, you can be assisted to incubate business ideas and advance innovation. The taxes have also been structured competitively, with companies in high-technology industries and free trade areas enjoying as low as 10% in corporate taxes. 

Abundance of Skilled 

China is a country with a large pool of potential employees who are competent and talented. Every year, Universities and Colleges release millions of skilled people that you can work with to build a strong brand. They can also help you with marketing and product development

Social and Political Stability 

One notable thing about China is that it is politically and socially stable. Unlike other regions on the globe where we hear of regular protests and inflation, such cases are rare in China. This stability makes it easy for WFOE in China to make long term plans, grow, and optimize profits.

As you can see, China is one of the leading jurisdictions that every investor can count on for fast growth. To enjoy the benefits that we have listed above and others with your WFOE in China, it is crucial to have a professional by your side. An agency of experts, such as Hawksford, can also help with WFOE registration, crafting a good strategy for growth, payroll management, and accounting. 

About Carson Derrow

My name is Carson Derrow I'm an entrepreneur, professional blogger, and marketer from Arkansas. I've been writing for startups and small businesses since 2012. I share the latest business news, tools, resources, and marketing tips to help startups and small businesses to grow their business.