Accompanied with China’s deepening reform and opening-up across the board, a wholly Foreign-owned Enterprise (WFOE), a business entity formed in China entirely controlled by foreign investors, has become the preferred entry mode to access the Chinese market. The differences in the business structure among the WFOE, Representative Office, JV, or the Branch are as follows:
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Business Structure
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Nature of Business
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Business Operation
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Employment
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Other Requirements
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WFOE
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Distinct legal entity
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Can trade within China
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Can hire local staff directly
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None
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RO
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Extension of foreign entity
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Cannot Trade at all
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Must use employment agency and limited to four foreign employees
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Must have a registered office
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JV
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Distinct legal entity
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Can trade within China
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Can hire local staff directly
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Minimum 100,000 capital
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Branch
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Extension of foreign entity
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Can trade within China
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Can hire local staff directly but limited to three local employees
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Not allowed to import/export
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Compared with other business entry modes, the WFOE allows foreign investors to have 100% control over its business equity. On top of that, foreign investors enjoy independence regarding HR, operational management, and strategic planning. WFOEs are also allowed to conduct a broad range of business activities within the specific business scope in China. Moreover, a WFOE is allowed to issue ‘fapiao’ official invoices to increase your credibility in transactions and increase the rate of foreign staff work permit applications in the future. Last but not least, a WFOE can hire both foreigners and local Chinese directly without the limitation on the number of foreign employees.
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TEL: 86-13717945838(Serene)
Email: beijing.tannet@qq.com
Website: www.beijing-company.net
Address: Rm 1902, Bldg 17, Jianwai SOHO West, No. 39 Dongsanhuan Rd, Chaoyang Dist, Beijing, China