Setting up a wholly-foreign-owned-enterprise (“WFOE”) is usually the first step for a foreign investor to carry out direct business in China.  Compared with representative offices or joint ventures, WFOE perhaps is the most commonly used vehicles adopted by foreign investor for investment in China today.  WFOE, in its legal nature, is a limited liability company with independent legal person status and is owned by one or more foreign investors .   

  1.  Application for name pre-verification
  2.  Application for filing for foreign investment
  3.  Application for registration and the issuance of business license with local Administration of Market Regulation (AMR)
  4.  Post-AMR registrations
    • Registration with local and state tax bureau
    • Open RMB and foreign exchange bank account
    • Registration with customs (if necessary)
  1. Application Form for the Establishment of Foreign Invested Enterprise
  2. Certificates of Incorporation of the Investor
  3. Articles of Association
  4. Passport copy of directors, supervisor and General Manager of the WFOE
  5. Letter of Appointment
  6. Lease Agreement
  7. Other applicable documents
  1. document preparation and execution: 2 – 4 weeks
  2. name pre-verification: 1 week
  3.  AMR registration: 2 weeks
  4.  Post-AMR registrations: 3 – 4 weeks

Every business entity established in China, whether domestic or foreign invested enterprise, is required to have a legal representative, who shall be a natural person with full civil capacity. Legal representative shall be either the chairman, managing director or general manager of a company. As to a WFOE, legal representative is the main person in charge of the WFOE and is the person with the legal power to represent and enter into binding obligations on behalf of the WFOE in accordance with the law or Articles of Association of the WFOE.

The legal representative of the WFOE will be shown in most certificates of the WFOE, like business license. Once the legal representative is changed for whatever reason, the WFOE shall go through the formalities with competent authorities in relation to the replacement of such legal representative.

Normally, a WFOE should have a board of directors with at least three directors. A small-scaled WFOE may have one managing director without establishing a board of directors.

The functions and duties of the Board or executive director shall comply with the stipulations of laws and Articles of Association of the WFOE. The term of director is usually no more than 3 years but can continue to serve the post upon expiration of term if he/she is re-elected. The directorshall be appointed or removed by the shareholder of WFOE. Once it is changed, the WFOE shall go through relevant procedures to change the registration

All WFOEs must have a registered office, which must be a situated at a physical location in the region of registration. This registered address is also referred to as “domicile” or “business premises”, which is the most important registered information for a WFOE and will be shown in all certificates of the WFOE.

Once the WFOE changes its registered address for whatever reason, it shall file the change application with all competent authorities to update the certificates. By comparison, it is much easier for a WFOE to change its registered address within the same district than cross the district, as the competent authorities of different districts will get involved in the latter case, which will be more time consuming and uncertain in the course.