Registering a Consulting Wholly Foreign-Owned Enterprise (WFOE) in China with JR & Firm
A Consulting Wholly Foreign-Owned Enterprise (WFOE) in China is primarily designed to engage in service or consulting businesses. This means they can offer professional services such as business consulting, business planning, and similar advisory services. However, it’s important to note that consulting companies in China are generally not permitted to engage in trading, import, or export activities.
Furthermore, while consulting WFOEs can offer a range of professional services, there are certain restrictions in place for financial and accounting services. These services can only be offered by Chinese-owned companies that have been properly licensed. Obtaining such a license requires a special permit from the government.
These regulations are designed to maintain the integrity and quality of financial and accounting services within the country. As such, foreign consulting WFOEs looking to offer these services would need to navigate these additional regulatory requirements.
We understand that the process of establishing a Consulting WFOE in China can be complex, and you may have questions that are not covered on this page. If so, please don’t hesitate to contact us at JR & Firm. Our team of experts is always ready to provide the guidance and support you need to successfully establish your business in China.
At JR & Firm, we specialize in providing comprehensive services for registering a Consulting Wholly Foreign-Owned Enterprise (WFOE) in China. Our team of experienced professionals is dedicated to guiding you through the complex process, ensuring that you meet all the necessary legal requirements and helping you establish your business presence in one of the world’s largest economies.
Required Documents & Personnel
To register a Consulting WFOE in China, you will need to provide the following documents and personnel:
1. Copies of passports & visas of all shareholders, the company director (also known as the legal representative), and the company supervisor.
2. Legalized passport copies for all shareholders. Legalization is done at the Chinese embassy.
3. Legalized passport copy for the legal representative of the company (aka company director) if he/she is outside of China.
4. Proposed three company names in English (and Chinese if our clients know Chinese, otherwise we will assist with ths part)
5. Copy of passport for the company supervisor.
6. One individual director (also known as the Legal Representative) is required. There cannot be more than one director, and the director cannot be the same person as the company supervisor.
7. One individual company supervisor. There cannot be more than one, and this should be a separate individual from the company legal representative (director).
Registering a WFOE in China as foreigner
Embarking on a venture in China can be an exciting prospect, but it can also be quite complex, particularly when considering the establishment of a Wholly Foreign-Owned Enterprise (WFOE). As a fully foreign-owned and capitalized business structure, a WFOE offers numerous advantages, such as full control over your business operations and the protection of intellectual property rights. However, the process to establish a WFOE, and the legal and business environment it operates in, often elicits a plethora of questions. In the following Frequently Asked Questions (FAQs) section, we aim to shed light on some of the most common queries related to setting up a WFOE in China, giving you a clearer understanding of what to expect when navigating this particular path in your international business journey.
1. What is the first step if I want to register a WFOE?
The first step towards registering a WFOE in China involves contacting a professional consultancy firm, such as JR & Firm, and signing a service agreement. In theory, the founders could handle the process themselves. However, since it requires an in-depth understanding of the company registration system and proficiency in Mandarin Chinese, it is generally more practical to hire a professional company to prevent potential mistakes during the process.
2. I have signed a service agreement with JR & Firm to register my WFOE, what's next?
After signing an agreement with our clients for WFOE registration in China, we issue a formal invoice. At this stage, we anticipate that our clients will make a payment for the service, allowing us to commence the process.
3. I have paid JR & Firm for the WFOE registration service, what should I do next?
Upon receiving full payment for the WFOE registration, we provide our clients with a detailed questionnaire. This document requests all the necessary information about the company, business activity, founders (shareholders), and executives (including the company director and supervisor). We request that our clients complete the questionnaire and return it to us via email.
4. What should I prepare for the WFOE registration questionnaire?
1. Company Name Choices: In China, WFOE names should follow this structure: [Place of Registration] + [Chosen Name] + [Business Direction] + Co., LTD. For example, Shanghai Silk Road International Trading Co., LTD, or for a consultancy company: Shanghai Silk Road Consulting Co., LTD. An alternative structure is: [Chosen Name] + [(Place of Registration)] + [Business Direction] + Co., LTD. For example: Silk Road (Shanghai) International Trading Co., LTD. Please note, in China, a company’s Chinese name is considered its main name. If our clients know Chinese, we ask for name choices in both Chinese and English, following the above structure. If not, English name choices will suffice, and we will select a corresponding Chinese name based on similar sounds. Avoid city, country, and historical names, as they’re typically disallowed. Also, we discourage direct translations of the English name due to high likelihood of them being taken. We recommend selecting similar-sounding Chinese characters to avoid delays. The Chinese name does not need to have a specific meaning, as meaningful characters are often taken.
2. Company’s Legal Person (Company Director): The legal person is an individual and cannot be a corporate entity. Please prepare their full name (as on the passport), a copy of their passport (not ID), along with their address, phone number, and email address.
3. Company’s Supervisor: The company supervisor is a separate individual from the company director, meaning they cannot be the same person. Please provide their full name (as on the passport), a copy of their passport (not ID), and their address, phone number, and email address.
4. Company’s Shareholder(s): Shareholders are the owners of the company and can be both individuals or corporate entities. Both the company director and supervisor can be shareholders. There can be up to 50 shareholders. Whether an individual or corporate shareholder, full information is required: full names, contact details, address, and either passport copies (for individual shareholders) or a full set of company documents (for corporate shareholders).
5. Company’s Business Activity: What products and/or services does the company plan to sell? Please prepare a detailed list.
6. Company’s Registered Capital: The registered capital is the amount the founders plan to invest in the company over a span of 30 years or more. The amount varies depending on the activity and place of registration. We recommend $300,000 for international trading companies and $100,000 for consultancy companies, as examples. The registered capital amount is usually suggested by the local government.
7. Full Contact Details for All Involved Executives and Shareholders: We need the complete contact details for all executives and shareholders. This includes addresses, emails, and phone numbers.
5. I submitted the WFOE registration questionnaire to JR & Firm via email, what's next?
Once we receive the completed WFOE registration questionnaire, we review it carefully and follow up with our clients accordingly. If there’s any missing information, or if the company requires additional permits or licenses based on its planned products or services, we will inform the client. If everything is in order, we prepare the application documents, attach our clients’ documentation, and submit the WFOE registration application. The estimated waiting period for feedback from the government on the registration application is approximately 10 business days. Please note that timeframes in China are approximate due to government bureaucracy.
6. How long does it take to get my WFOE license after the registration application is submitted?
Once the WFOE registration application is submitted, the government generally responds within 10 business days. If approved, they will issue the company’s structural documents, which the founders (shareholders) and executives (director and supervisor) are required to sign with a black gel pen and mail back to us (Note: In China, only black gel pens are acceptable for signing legal documents; other colors and ballpoint pens are not accepted). We then submit the signed documents to the company registrar and await the business license. The waiting period for the business license is roughly 10 business days unless expedited service was purchased. With expedited service, a business license can be obtained within 2-5 business days. Contact us for more details about the expedited service.
7. Great, I have obtained my WFOE business license, what is the next step?
Once we secure the WFOE business license, we will contact our clients and the bank to schedule an appointment to open a corporate bank account for the company. Please note, the company director must be present in China to open a corporate bank account and their citizenship should not be among the countries sanctioned in the bank’s system. Alongside being present, the director needs to provide a Chinese phone number linked to their passport and a second person’s passport and phone number linked to this second person’s passport. This second person can be anyone in China (provided their citizenship isn’t among the sanctioned countries) with a Chinese phone number. This requirement is due to the banks’ need to issue online banking devices that require two people’s information. Legally speaking, this second person doesn’t have any rights or obligations regarding the company’s finances or bank account. While this might seem unusual, it remains a requirement, so we advise clients to identify such an individual in China before opening a bank account. The bank account opening process takes around 5-6 hours, and we recommend our clients exercise patience during this process.
8. I have my WFOE bank account opened, what is the next step?
After your WFOE bank account is opened, we’ll proceed to contact the customs department to initiate the process for the e-port device (if you’re registering an international trading WFOE focused on import/export. Note that e-port isn’t required for consultancy or other types of companies). This process typically takes about 5 business days, and we’ll mail the e-port device to our clients once it’s secured.
9. I have obtained my e-port device, are there any other steps to be completed before I start my company’s operations?
Yes, following the acquisition of the e-port for the WFOE, we’ll register the company with the tax department. This process generally takes around 14 business days, and it requires the company director to visit the tax office in person for ID verification.
10. After the WFOE tax registration, are there any other steps involved before the company becomes active?
Indeed, the final step in the WFOE registration is the foreign currency permission application. This process typically takes around 7 business days and necessitates a visit to the relevant government department. After securing the foreign currency permission, the WFOE can commence its operations.
On the whole, the complete process for WFOE registration can span anywhere between 4 and 8 weeks. As we mentioned earlier, all timeframes are approximations due to the inherent unpredictability of government bureaucracy. Although these factors are beyond our control, we will do our absolute best to expedite the process.
11. Can students register a company in China?
Yes, but they cannot pay themselves a salary from this company. To receive a salary, they should first switch to their company’s work visa.
12. Can we register a company from a distance?
Yes, but you won’t be able to open a bank account for the company from a distance. The company’s legal representative (director) should visit Shanghai in person to open a bank account for the company.
13. What documents should I submit to start the process from a distance?
You should submit a legalized passport copy for all the individual shareholders of the company and the Legal Representative (director) of the company. These should be legalized at the Chinese embassy. You should also provide a passport copy for the Legal Representative (director) of the company and the company supervisor.
14. Can we pay in installments?
Sorry, but we don’t accept installments. We require full advance payment to our company account. We also accept WeChat / Alipay payments. An official invoice from the company will be provided in either case.
15. Can you offer any discounts?
We are ready to offer discounts up to 3000 RMB if you bring paying clients to us/client referral. Discounts will be offered only after the clients pay.
16. Can you help me get a work visa?
Sorry, we do not offer any visa services in China.
17. Can you send me a visa invitation to China?
Sorry, we do not offer any visa invitations to China.
18. Can you help me get a visa without company registration in China?
19. Can I open a USD account for my company in China?
If your company is registered in Shanghai through us, then it might be possible. We will still need to check your country of citizenship and confirm it with the bank. Unfortunately, most banks in China can be extremely strict towards certain nationalities – for e.g. Iran, Nigeria, Russia, Afghanistan, Pakistan, Cuba, Syria, Zimbabwe, and some others. i.e., they might not be able to open foreign currency accounts in China.
20. Can I open a company, get my work visa through it, and work as a teacher in China?
No. It will be illegal.
21. Can I open a company, get my work visa though it, and work for a different company in China?
No, it will be illegal.
22. Will the company supervisor be required to visit China during the company registration or after?
No. Only the passport copy of the company supervisor will be required during the process. He/She will not be asked to visit China at any time before, during, or after company registration.
23. I want to open a branch office of my company in China, can you help?
Yes, but please note, opening a branch office / representative office in China is not recommended, as these types of companies cannot trade in China, cannot receive income, cannot issue invoices. They can only engage in marketing and research activities, and represent their parent company in China only. If our clients wish to engage in trade / consulting activities, and be able to issue invoices to clients – local Chinese and international, then we recommend opening a fully functional company in China or a fully functional subsidiary of the existing company (not a branch office / representative office).
24. I want to open a subsidiary company of my existing company in China, can you help?
Yes, if you have a company outside of China and you want to open a company in China, which will be owned by this existing foreign company, then you will be required to provide legalized document copies of your existing foreign company. Set of documents differ from country to country, but in general we require 1) Certificate of incorporation 2) Articles of association 3) document which shows the list of shareholders – all these three documents will have to be legalized through the Chinese embassy and stamped by them, then you will have to send all the originals of the legalized documents to us by post. NOTE; original company documents of your existing company are not required, we only need the original legalized copies.
25. Should I send my original passport to China to register a company?
No. if you are the company Legal Representative or an individual shareholder of the Chinese company, please send us the original legalized copy of your passport. We do not need the original passport.
At JR & Firm, we are committed to providing you with the best possible service to ensure a smooth and successful registration process for your Consulting WFOE in China. Our team is always ready to answer any questions you may have and guide you through each step of the process. We look forward to helping you establish your business in China.
Jasur Mavlyanov, an experienced entrepreneur and legal expert, has built a notable career in international business, with a focus on China. With over 13 years of experience living and working in China, Mavlyanov has acquired valuable insights into the Chinese legal system and business environment.
As an entrepreneur, Jasur founded JR & Firm LLC, a company dedicated to providing legal services to global clients entering the Chinese market. His leadership has helped the firm become a reliable partner for businesses navigating the complexities of Chinese regulations and laws. READ MORE about Jasur.