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In this section you will find information on how to register a Wholly Foreign Owned Enterprise (WFOE) in China, how to handle its accounting, taxation, human resources, office, and the steps to follow during the incorporation process. |
What is a WFOE?
WFOE (Wholly Foreign Owned Enterprise) is the most direct form of investment and the easiest in terms of management in China. For the time being, foreign investors are allowed to set up WFOEs in many industries.
Hong Kong enterprises can have more advantages according to CEPA. In the step by step link, you can find the procedures for all types of WFOEs.
If you would like to know more about the various aspects of setting up and running a WFOE in China, you can contact us via livechat, email or phone or more information.
You can also request a quote for the following services:
- Incorporation of a WFOE
- Accounting & tax services for WFOE
- Tax strategy for WFOE
- Annual financial audit
If you would like to find out more information about the industry you want to join in China, please visit our market-entry services section.
Tax & Accounting
All foreign invested organizations in China are subject to tax declaration, including enterprise income tax, business tax, individual income tax, stamp tax, value added tax etc.
The kind of taxes applicable and their level may vary for different organizations due to their business scopes and operations.
If you would like to know more about the various aspects how to deal and manage tax & accounting for a WFOE in China, you can contact us via livechat, email or phone for more information.
You can also request a quote for the following services:
- Incorporation of a WFOE
- Accounting & tax services for WFOEs
- Tax strategy for WFOEs
- Annual financial audit
If you would like to find out more information about the industry you want to join in China, please visit our market-entry services section.
Human Resources
Chief Representative of JV in China can either be Chinese nationals or foreigners. If the Chief Representative is a Chinese national, he/she must hold a certification issued by a human resources company regulated by the Government, which provides services for foreign companies. JVs can both hire Chinese employees and foreign staff, or or foreign staff only. However, management of Chinese HR must be controlled by a human resources organization regulated by the government.
Generally speaking, in Beijing and Shanghai, the wage of an employee with English sklills is as follows: The salary of a SEC is no less than 3000RMB per month, an accountant or a legal consultant is no less than 4000RMB per month, a marketing sales is no less than 5000RMB per month, a department manager is no less than 8000RMB per month.
Different requirements determine different salaries. WFOE should bear the employees' social insurance premiums and housing fund for Chinese nationals. This amount is equal to 50% of an employees' salary and partially paid by the employee, but most part of it should be born by the employer. Details are as follows:
| I. Social insurance (take Ceiling 2008 for example, implemented in line with relevant policies of the state) | |||||||
| S.N. | Item | Ceiling(2008) | Pay by enterprise | Pay by individual | Charge | ||
| % | Amount | % | Amount | ||||
| 1 | Pension insurance | 9,966.00 | 20.00 | 1,993.20 | 8.00 | 797.28 | 2,790.48 |
| 2 | Unemployment insurance | 9,966.00 | 1.50 | 149.49 | 0.50 | 49.83 | 199.32 |
| 3 | Medical insurance | 9,966.00 | 10.00 | 996.60 | 2.00+3rmb | 202.32 | 1,198.92 |
| 4 | Work injury insurance | 9,966.00 | 0.50 | 49.83 | - | - | 49.83 |
| 5 | Maternity insurance | 9,966.00 | 0.80 | 79.73 | - | - | 79.73 |
| 6 | Housing fund | 9,966.00 | 12.00 | - | 8 or 10 | - | Payment by separate account |
| Subtotal of social insurance | Remarks: | Enterprise shall set the ceiling based on the average salary of personnel of last year. Ceiling of social insurance shall be adjusted in every April in line with relevant policies of the state Ceiling of housing fund shall be adjusted in every July in line with relevant policies of the state | 4,318.28 | ||||
The Chinese government does not have the requirement of paying social insurance premiums for foreign employees, nor regulations about the salary of the Chief Representative. However, this salary should correspond with the practical minimum that is required by the government and the Taxation Bureau. This minimum is no less than the income of a foreign employee from foreign countries which is equal to 15,000RMB /m, a Chinese employee's income per month.
The Office
An address for the WFOE office is demanded. This address should be the official business office. The houses of a foreign organization or an individual are not allowed to be offices.
In China, different cities have different office requirements and the rent is different, too. In Beijing and Shanghai, the rentals are the highest, from 1.5RMB to 12RMB per sq.m. per month. An apartment with one bed room is at the rent of over 4,000RMB per month, with two bedrooms is more than 6,000RMB per month , with three bedrooms is more than 8,000 RMB per month.
How to find it? Chinasolution can help you to obtain information from the leasing agency, avoiding you the hassle of being cheated.
Contact us via livechat, email or phone for more information.
WFOE Step by Step
Below you can find a list by business scope category of the procedures needed to set up a W.F.O.E. in China. Though the steps are complete and accurate, we invite you use our services rather than attempting yourself. We can save you time and long, stressful queues.
