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Scope of Business of a China Representative Office
The business scope of a Permanent Representative Office (RO, also known as Resident Representative Office) should be clearly stated in the application document prepared by the applying foreign enterprise. After approval by the relevant authority and registration with the AIC, the business scope will be stated in the Registration Certificate of the Permanent Representative Office (RO).
China WFOE Registration Guide (1) - Main Features of a Wholly Foreign Owned Enterprise
Limited Liability Company (LLC), a Company type generally referred to as a Wholly Foreign Owned Enterprise (WFOE). The Wholly Foreign Owned Enterprise (WFOE, also known as Wholly Owned Foreign Enterprises, WOFEs) is a Limited liability company wholly owned by the foreign investor(s). In China, WFOEs were originally conceived for encouraged manufacturing activities that were either export orientated or introduced advanced technology.
China WFOE Registration Guide (15) - Materials Required for the Registration of a China Wholly Foreign Owned Enterprise (WFOE)
Name of the company to be registered,Particulars of the Shareholder,Legalised identification documents of the shareholder,Organisational Chart and Beneficiary Owner.Legal Representative,A photocopy of the identification document (i.e. passport for foreigner or identity card for Chinese national) and full residential address of the legal representative.
China WFOE Registration Guide (16) - Registration Licences and Certificates Obtained after Incorporation of WFOE
It is part of a company's incorporation process to obtain various certificates and stamps/seals from Chinese government authorities. These various certificates and stamps/seals are required in the company’s dealings with the government authorities. Many foreign investors may be confused about the usage of these items. What follows is a description of each of the certificates and stamps/seals obtained after the incorporation of a WFOE in China.
Legal Status of a China Representative Office
Permanent Representative Offices (ROs, also known as Resident Representative Offices) registered in China are non-legal entity and therefore not considered to be separate and independent from the foreign enterprises. Chinese laws do not expressly provide that ROs should bear liabilities independently with their own assets (i.e. limited liability), ROs may be deemed to be part of the foreign enterprise.
Chief Representative of a China Representative Office
The Chief Representative of a China Representative Office is the person who is responsible for the daily operation of the Representative Office (RO). However, Chinese laws do not clearly specify the limitation of the authorities of a Chief Representative or a Representative. In the absence of express statutory provisions, it is not clear whether or not documents signed by a Chief Representative
Employment of Chinese Staff by Representative Offices
Representative Offices, also known Permanent Representative Offices or Resident Representative Offices, cannot employ Chinese staff directly. Chinese staff can only be employed through local foreign service companies or other entities designated by the local government. These foreign service companies will enter into employment contracts with Chinese individuals and should be responsible for paying salaries
Statutory Audit of the Financial Statements of WFOE in China
According to the Company Law of the PRC, a one-person limited liability company shall prepare a financial report by the end of every fiscal year and have the report audited by a certified public accounting firm registered in China. The term "one-person limited liability company" refers to a limited liability company with only one natural person shareholder or legal person shareholder.
Setting up a Wholly Foreign Owned Enterprise in China
The Wholly Foreign Owned Enterprise (WFOE) in general refers to a Limited liability company wholly owned by one or more foreign investor(s). Company limited by shares, if all shares are held by foreign nationals or foreign enterprises, then it is also referred to as WFOE. In China, WFOEs were originally conceived for encouraged manufacturing activities that were either export orientated or introduced advanced technology.
China WFOE Registration Guide (18) - Setting up Different Bank Accounts And Their Functions of a WFOE
Before the official incorporation of a FIE, if it needs cash urgently for the purpose of pre-incorporation expenses, it can choose to set up a Temporary Capital Account. This account is to temporarily receive funds directly related to the investment in China. However, this account is not a necessity. It should be based on the needs and requirements of the company and approval by the State Administration of Foreign Exchange (SAFE).