Complete WFOE Establishment Plan

Table of Content

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Phase 1: WFOE Establishment

WFOE Setup

Phase 2: Ongoing Operational Support

Additional Considerations

WFOE Establishment Plan

This comlete plan outlines the steps for establishing and supporting your Wholly Foreign-Owned Enterprise (WFOE) in China, along with potential service offerings from a local partner.

To learn more about WFOE checkout our Complete WFOE Guide

Phase 1: WFOE Establishment

Pre-Registration:

  1. Market Research and Plan (Local Partner Involved):
    • Conduct thorough market research with the help of a local partner to understand the Chinese market, competition, and regulations specific to your industry.
    • Develop a comprehensive business plan outlining your WFOE’s goals, strategies, and financial projections.
  2. Business Plan:
    • Finalize your business plan, considering the findings from the market research and incorporating any insights from your local partner.

Looking for a professional market research and tailored business plan? Let us know!

WFOE Setup

Local Partner Service Offerings: The following services can potentially be provided by a local partner to assist with WFOE setup. It’s important to confirm the specific services offered by your chosen partner.
  • Registration Address:
To register the WOFE in China, a registration address is necessary for company registration. Your local partner can help you with two options: Option 1: Virtual Registered Address:
  • Suitable for companies with few employees or no immediate need for a physical office.
  • Provides a registered address solely for company registration purposes, not for office use.
  • Typically less expensive compared to renting a physical office.
Option 2: Serviced Office:
  • Provides a physical office space that is qualified for company registration and can be used as your workplace.
  • Your local partner can help you search for or verify the suitability of an office for registration.
  • Consider verifying with the landlord (your local partner can assist with this) to ensure the office meets registration requirements.
Incorporation of WOFE:
  • Consulting & Documentation:
    • Advise on the set up of a WOFE and necessary documents for registration.
    • Highlight relevant tax, regulatory, and accounting requirements.
    • Address queries on treasury considerations and other setup-related questions.
    • Provide relevant sample documents for reference.
  • Application Preparation & Submission:
    • Prepare and compile all necessary application forms and documents.
    • Conduct a Chinese name search and register the chosen name.
    • Submit the registration application with all documents to relevant authorities.
  • Banking & Seals:
    • Assist with opening a capital bank account and an RMB bank account for daily operations.
    • Assist with obtaining company chops (stamps) for official documents and contracts.
  • (Optional) Assist with import/export license application and SAFE registration.

Phase 2: Ongoing Operational Support

Local Partner Service Offerings (Potential): In addition to the WFOE setup services, a local partner may offer ongoing operational support. Confirm the specific services provided by your chosen partner.
  • Accounting Outsourcing:
    • Set up your chart of accounts according to Chinese accounting standards.
    • Prepare documents for accounting and taxation.
    • Assist with agreeing on the chart of accounts with your overseas parent company (if any).
    • Provide accounting advisory services related to bookkeeping, management reporting, and tax filing.
    • Handle monthly bookkeeping, voucher & account preparation.
    • Prepare monthly financial statements in both Chinese and English.
    • Provide monthly notes to the accounts/balances breakdown.
    • Assist with quarterly tax filing.
  • Expenses Verification and Payment Assistance:
    • Help establish payment procedures and approval processes within your company.
    • Consider offering outsourced expense verification and payment assistance.
  • Invoicing Services:
    • Verify your invoicing information and issue invoices.
    • Courier invoices to customers.
    • Purchase invoices from local tax authorities and verify VAT invoices.
  • Payroll Compliance:
    • Assist with setting up social security and housing fund accounts.
    • Calculate and file social contributions, housing fund contributions, and individual income tax (IIT) for employees.
    • Manage employee salary payments and prepare payslips.
    • Consider offering outsourced payroll services.
  • Work Permit and Visa Application Service (Optional):
    • Assist with obtaining work permits and visas for foreign employees.
  • Annual Compliance Services:
    • Facilitate a statutory financial audit (PRC GAAP).
    • Assist with filing for annual tax clearance.
    • Help with the Unified Annual Examination (UAE) covering financial, statistical, foreign economic and trade cooperation, industry and commerce, and SAFE records (and customs if applicable).

Additional Considerations

  • Local Partner Selection: Carefully choose a reputable local partner with experience in your industry to navigate the complexities of WFOE establishment and ongoing operations. Consider factors like:
    • Experience with your specific industry and its regulations.
    • Track record of successful WFOE establishment and support.
    • English communication capabilities for smooth collaboration.
    • Service offerings that align with your needs.
    • Competitive pricing and transparent fee structure.
  • Ongoing Compliance: Maintaining compliance with Chinese regulations is essential. Consider engaging a local accounting firm to assist with bookkeeping, tax filing, and annual audits.

By following these steps and seeking professional guidance, you can successfully establish and operate your WFOE in China.

Ready to Establish Your WFOE in China?

Navigating the complexities of WFOE establishment and ongoing operations in China can be challenging. Partnering with Sapience Pro can streamline the process, ensure compliance, and empower you to focus on your core business goals.

Contact Sapience Pro Today!

Discuss your specific needs and obtain a quote for comprehensive WFOE solutions, including:

  • Market research and business plan guidance
  • WFOE registration and incorporation services
  • Assistance with obtaining necessary licenses and permits
  • Ongoing accounting, tax, and payroll support
  • Annual compliance services

By leveraging the expertise of Sapience Pro, you can ensure a smooth and successful entry into the Chinese market.

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