WOFE (Wholly Owned Foreign Enterprise)Widgets
What is the JOINT VENTURE ENTERPRISE?
Joint venture is a legal corporate that just hasforeign investor(s) and Chinese investors.
Some requirements on JV
1. Chineseinvestor should be corporate, individual investor is not allowed except inPudong district of Shanghai.
2. Foreigninvestor generally need to have minimum 25% share in JV: According to thelatest Chinese law, there is no minimum capital for JV since March 1, 2014.
What important documents require to register a JV in China?
1. Non-hinese Investor business licenseauthenticated by Chinese Embassy of investor country if the investor iscorporate, or non-Chinese passport authenticated by Chinese Embassy of theinvestor country. For the detail please review the website of Chinese Embassyof the investor country. (two originals, prepare it at investor country)
2. A letterissued by a fWidgetsinancial institution which testifies its financial and creditstanding for non-Chinese investor. ( two originals, prepare it at investorcountry)
3. Officelease contact, to register a JV the Chinese government requires a place tocarry out business, the place should be in commercial building or industrybuilding. The resident building is not allowed to register as a WOFE address.
4. Articleof incorporation
6. Legalrepresentative 1 inch pictures (6 pieces)
How long to complete the registration and start to dobusiness?
Normally it takes 3 months
When it comes to the following changes of your JV, wecan assist you apply for the new licenses and certificates.
1. Company shareholder change
2. Company Name Change
3. Registered capital changes
4. Registered address changes
5. Transfer of shares
6. Business scope changes
What is Represntive Office(RO)?
Representative Office (RO) is established by foreign companies to engage in business liaisons, quality control, product promotion, market research, exchange of technology and other permitted activities in China.
ROs are not allowed to directly engage in operational activities, RO can’t issue official invoices, nor receiving payments from it’s clients. State Administration of Industry and Commerce (SAIC) usually specifies in scope of business, as it shown in the Registration Certificate of ROs, that ROs can not engage in direct operational activities. Therefore, it’s not a form of foreign direct investment (FDI) in China. However, some ROs are engaged in operations in a lawful or tacitly permitted way and constitute one of the direct foreign Investment forms in China, for instance: ROs of foreign law firms, ROs of foreign airlines etc.
What important documents require to register a Representativeoffice in China?
1. Non-ChineseInvestor business license, power of attorney, article of incorporation, chiefrepresentative appointment resolution and passport copy, credit standing issuedby bank which are authenticated by Chinese Embassy of investor country, itrequires this investor lasts at least two years. ( 1 originals, prepare it atinvestor country)
2. Officelease contact, to register a JV the Chinese government requires a place tocarry out business, the place should be in commercial building or industrybuilding. The resident building is not allowed to register as a WOFE address.
3. ROsminimum registered capital: no capital required by Chinese government.
RepresentativeOffices (ROs) are established by foreign companies to engage in businessliaison, product promotion, market research, exchange of technology and otherpermitted activities in China.
ROs are not allowed to directly engage in operationalactivities. The AIC usually specifies in the Business Scope, as shown in theBusiness License of ROs, that a RO should not engage in direct operationalactivities. Therefore, ROs are not a form of foreign investment in China.
However, some ROs are engaged in operations in alawful or tacitly permitted way and constitute one of the direct foreignInvestment forms in China.
The tacitly permitted way is applicable to thoseindustries that do not require special material conditions or environment fortheir operations. For example, a consulting business does not needmanufacturing equipment and raw materials. It only needs offices, employees andoffice articles.
These physical conditions are necessary for other ROsas well. In practice, many ROs that are established by foreign consultingcompanies directly engage in consulting activities. Chinese government does notprohibit them in practice and this is reflected by the fact that the taxauthorities collect business tax from these ROs. The lawful operationalactivities engaged in by ROs refer to those business activities permittedpursuant to the bilateral treaties between China and other countries. In theevent that a bilateral treaty provides that certain types of ROs are permittedto engage in operational activities, these bilateral treaties should prevailover Chinese domestic law.
|1||Identification Certificates or Certificate of Registration of the investor||Identification Certificates for personal investor, Certificate of Registration/Business Certificates for company investor, and both should be notarized by local, state or national registration office or authentication deparment and then be authenticated by chinese embassy or consulate HongKong, Macou and Taiwan companies should be notarized by local registration office or authentication department only||1 original, 2 copies|
|2||Certificate of legal representative of the investor||Certificates of legal representative of the investor should be notarized by local, state or national registration office or authentication department and then be authenticated by chiniese embassy of consulate||1 original, 1 copy|
|3||Credibility Certificate issued by the investor’s cooperation bank||The certificate has a validity of a half year||1 original, 1 copy|
|4||Application letter||Signed by the legal representative of foreign investor||1 original, 1 copy|
|5||Feasibility report||Signed by the legal representative of foreign investor||1 original, 1 copy|
|6||Article of Association||Signed by the legal representative of foreign investor||3 originals, 1 copy|
|7||Appointment letter for general manager and for directors of the board (executive director)||Signed by the legal representative of foreign investor There should be at least 3 directors for the Board of directors||1 original, 1 copy|
|8||Identificaiton Certificate for the directors of the new company||Foreigners provide passport copy and chinese citizens provide ID card copy||2 copies / each|
|9||Resume of the directors of the new company||The resume should cover period from age 18 to now without time interruption and detailed to month||2 copies / each|
|10||Name list of the board||Each person in the board signs at the list and provide your own chinese name according to the orders of the relevant departments in China||1 original, 1 copy|
|11||Identification Certificate of general manager and supervisor,and their resumes||Foreigners provide Passport copy, chinses citizens provide ID card copy Provide chinese name on the chinese translation of the resume||2 copies / each|
|12||Photo of the legal representative||2 inch size or passport size||2|
|13||Lease Agreement||At least one year agreement||1 original, 3 copies|
|14||Property Certificate||Copy and stamped with property owner’s chop||1 original, 4 copies|
|15||The last year audit report of the investor||Provide the original copies and the translation||1 original, 2 copies|
|16||The name of the new company||Need to provide five Chinese name of new company|
|17||Filling Forms||BIS provide all requisite application forms|
* The list above was prepared based upon the relevant PRC laws and our experience in assisting foreign companies in establishing a WFOE in Beijing. However, the approval and registration process in the PRC can be arbitrary and subjective and the authorities may request additional documents.
Q1.How can a foreign invested enterprise establish its branches?