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WFOE (Wholly Foreign-Owned Enterprise) Registration in China

To start your business in China, the first step is to register an operational entity in this country. In this rapidly developing and opportunity-filled market, Hongda is your trustworthy partner to help you overcome cultural and legal challenges, ensuring a smooth launch of your business. From choosing the type of WFOE to completing all registration steps, we will provide a one-stop solution to ensure a smooth journey for your business in China.

What Is A Wholly Foreign-Owned Enterprise?
Embark on Your Business Journey in China with a WFOE

As its name indicates, a wholly-foreign owned enterprise, or WFOE, is a China-registered limited liability company 100% invested by foreign capital and owned by only foreign investors. WFOEs are the most popular business structure for foreign businesses entering China and allow foreign companies to establish a presence in the country without the need for a local partner. They operate in the same way as any company does and can trade freely in China, make profit and revenue in CNY, issue invoices, transfer its profits abroad, and import/export goods. Once your WFOE is successfully set up, you will not need to de-register and re-form a new WFOE to introduce or delete an operation item from your business scope, unless the operation category is altered completely.

Now let’s take more information about everything you should know about setting up your own WFOE in China!




The Three Types of WFOEs You Can Consider

As long as your company will not be engaged in industries listed in the ‘Market Entry of Foreign Investment (Negative List)’ published by the Chinese government, you will be allowed to operate with 100% of foreign capitals, bringing singnificant advantages than other business types in China (click here to read more about the pros and cons of a WFOE). In general, based on the main business, WFOEs can be classified into three types:


Service industrial WFOE

A service industrial WFOE (also called consulting WFOE) is the simplest foreign-owned legal entity to set up, is usually used for most types of business purposes including marketing, legal consulting, staff training, software development, international logistics, and financial services. However, industries such as education, telecommunications, and healthcare cannot be wholly owned by foreign investors. There are also different regulations regarding the proportion of Chinese holding in these sectors. In these cases, you should consider forming a Joint Venture (link to JV page) with a Chinese partner to start your business.

some businesses may require a special license to legally operate. For example, if you wish to engage in internation logistics industry, a non-vessel operating common carrier license (NVOCC) is compulsorily needed is issue the bill of landing to your customers. More information about Hongda’s special license application services, please click here or book a free consultation with us.


Trading WFOE

A trading WFOE, which involves importing goods from abroad or exporting goods from China, will have "import and export of goods" or "import and export of technology" included in its business scope. Consequently, trading WFOEs must also apply for an "import and export license" to legally conduct import and export activities. In most cases, trading WFOEs can import and export various types of goods or technologies. However, some "special category" goods, such as cosmetics, medical devices, pharmaceuticals, as well as meat, seafood, and dairy products, require additional certification and inspection. Furthermore, after importing certain goods into China, you will still need to apply for special permits. For example, if you want to deal in medical devices, you need to apply for a Medical Device Operation Permit; if you want to deal in food, you also need a Food Operation License.


Manufacturing WFOE

A Manufacturing WFOE in China represents a fully foreign-owned entity established to engage in manufacturing activities within the Chinese territory. This type of WFOE is specifically designed for foreign investors aiming to produce goods in China, whether for domestic consumption or international export. By setting up a Manufacturing WFOE, foreign companies can benefit from full control over their production processes, quality standards, and supply chain management.

When preparing to set up your manufacturing WFOE, the location selection of the manufacturing facilities or factories might be the most important issue you need to consider, thinking about the significant differences on the supported industries encouraged by various industrial parks and the tax incentives from the local governments. Please book a free meeting with Hongda’s consultants to obtain more information on how we can help you decide your optimal business location with our industrial location selection services.




Hongda's All-in-one Business Solution to Start Your Business with a WFOE

For you to understand what we are doing, we will report different steps and stages to finally set up your WFOE. Our thorough WFOE checklist will also guide you in every process.


Step one: Company Name Pre-approval.

The first step in establishing a WFOE in China is to come up with a name for your company. According to the regulations in China, you need to follow a format when giving your company a name. You can read more about ‘how to name a Chinese company (for foreign investors)’

Step two: Application Materials Preparation.

After the company’s name is pre-approved, you will then need to prepare the registration materials and documents. Hongda will help you prepare the documents and guide you through all the difficulties while gathering the materials.

  • Legal representative's passport or the copies of overseas company registration documents (required the foreign company serves as the investor). The passports or incorporation documents need to be certified by either consulate authentication or Hague authentication. You can click on this blog to learn more about Hague authentication.
  • Company director’s passport copy;
  • Copy of company supervisor's passport or ID card (the supervisor can be either a foreigner or Chinese citizen who is not the same as the legal representative);
  • Company office lease rental contract: the office will be used as the ‘registration address’ shown on the business license. Hongda also provides affiliated registration address services to save your budget by cutting the fees of renting physical offices.
  • Company’s information description: the registration information of the company including the business scope, investment capital, operation period, and the holding ratios of shareholders.

Among all the information mentioned above, the most important item might be the investment capital of your company. It is important to note that the Chinese Company Law has been revised in 2023, introducing significant changes to the investment capital system. To read more about the changes brought by the revised Chinese Company Law, please click our latest blog: the key changes by the Revised Chinese Company Law.

Step Three: Obtain Business License and company stamp.

Once all the documents are prepared, your company registration application will be submitted to the Administration for Industry and Commerce. After review, if your materials are complete and correct, the Industry and Commerce Bureau will issue a business license, marking the successful registration of your company.

Step Four: Tax Registration

Tax registration is the legal registration process that must be completed before WFOEs can officially commence operations. This process is designed to ensure that enterprises legally pay taxes and comply with Chinese tax laws.

Step Five: Open Corporate Bank Account

For normal operations in China, you need a company bank account to manage your daily income and expenses. You may go through various steps such as on-site visits, submission of documents, and account activation. Depending on the requirements of different banks, you might need to submit various application materials. Hongda's China Bank Account Opening service will assist you in selecting the most suitable bank and support you through the entire account opening process. You are welcome to visit our bank account service page to learn more about the relevant information.

Step Six: Obtain Work Permit and Employment Residence Permit

According to Chinese legal regulations, foreigners residing or staying in China are required to hold the corresponding type of visa. This means that if you want to work legally in China, you need to apply for and hold a work-type work permit and residence permit, otherwise, you may face penalties from the Chinese immigration authorities. Applying for a work permit is a relatively complex process, requiring the preparation of many documents and taking about 1.5 months. Let Hongda assist you in applying for a work permit and residence permit to comply with the regulations of Chinese immigration law. Please click here to learn more.

Step Seven: Hire Qualified Employees

Depending on the needs and scale of your enterprise, you may need to recruit employees to support the operation of your business. Before hiring employees, you need to clarify job requirements, develop a recruitment plan, and conduct recruitment according to local labor laws. Hongda now provides comprehensive HR services including EOR, PEO, and headhunt to find the ideal candidates for you! We are also happy to support your employees with our payroll services. Please read related service pages or book a free meeting with us to know more!

Step Eight: Ongoing Compliance
Now your WFOE is ready to start operation. However, during this process you will still need to face several compliance affairs needed to be done throughout the life cycle of your WFOE.

  • Bookkeeping and tax report: Bookkeeping involves the systematic recording, organizing, and maintaining of all financial transactions of a company. This practice is fundamental for tracking income and expenditures, financial analysis, and strategic planning. Outsourcing bookkeeping to Hongda will help you save money while enjoying high-quality services. We will provive daily transaction recording and monthly tax report for your company!
  • Annual Maintenance: Annual Maintenance refers to a series of tasks performed yearly to comply with legal, regulatory, and operational requirements. These tasks may include renewing licenses and permits, completing annual filings with regulatory bodies, updating corporate records, and performing financial audits. By choosing Hongda’s yearly maintenance service, you will easily pass the annual inspection process without any stress!


Documents Required For WFOE Setup

Gathering the documentary evidence needed to apply for a WFOE is difficult and time-consuming. Hongda will guide you through this every step of the way.
We will require, roughly, the following documents from you in order to open a WFOE (updated May 2020):

  • Company director/s passport copies
  • Legal representative's passport copy and details
  • Company supervisor's passport copy and details
  • Company office lease rental contract
  • Chinese name of company (Hongda will assist with this)
  • Business scope (Hongda will assist with this)
  • Copies of overseas company registration documents (required if a company is the foreign investor)

What Is The Capital Investment Needed For China WFOE Registration?

Capital investment was traditionally required to demonstrate that the WFOE, or WOFE as it is often called, would not run out of money before being able to break even.

In recent amendments to the foreign investment laws, perhaps in a bid to spur more investment by lowering the barrier to entry for foreign firms, the government has since removed the minimum capital investment requirement when incorporating a WFOE in the country. 

Companies can now determine how much capital will be required to maintain their operations and must simply ensure that they meet those targets within a period of 30 years. The amount that you commit to will vary depending on the business that you're doing. While it may be more flexible, please note that you will need to commit to registering an appropriate amount of capital upon forming the WFOE (for instance, a factory will require more than a trading company). 

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Rent office space

Registered address

Online registration via


Company Seals

Seal engraving for the company




Issue contracts and hire employees

Apply for name

Approval and registration

Business license

Apply for a "5 in 1" business license from AIC

Bank account

Opening of bank account

Special Licenses

Customs and import-export Registration - Only Trading WFOE

Everything You Need To Do


Consult and confirm proposal

Book a free consultation with our experts and receive our comprehensive proposal for you to confirm.


Contract Signing and make payment

Sign the service contract and make payment.


Preparing Documents

We will send everything that you need to prepare, not hard at all.


Wait for the good news

Leave rest of the work to Hongda and we will inform you in 1-2 weeks.


How should I name my WFOE in China?

To name your WFOE in China, according to the Company Law of the P.R.C., you will have to follow the regulated format:

  • Location of company + Company name/title + Category of operation + Business type.

You can know more about the naming regulations in our blog: How to name a Chinese company (for foreign investors).

What are the general types of WFOE in China?

There are three types of WFOE that you can choose to register, depending on the main operation activity of your company:

  • Manufacturing WFOE: manufacture and resell goods and products;
  • Trading WFOE: trading, wholesales, retail, or franchise in China;
  • Consulting WFOE: consultancy & services;

Do I need to travel to China to register my WFOE?

No, you don’t need to travel to China. By partnering with Hongda, you can enjoy remote WFOE registration service. All you need to do is to prepare some documents and deliver them to Hongda and let us take care of the rest of the work.

What is the minimum investment required to set up a WFOE?

In 2014, China amended its Company Law to abolish minimum capital requirements. However, every city may impose its capital requirements, especially for manufacturing WFOE or WFOE engaging in special industries requiring additional licensing.


For most companies, the amount of minimum capital will depend on the location and the nature of the business. You can book a meeting with our experts to discuss your business plan and I can help you determine the amount of your register capital.

What are the benefits of setting up a WFOE?

One of the features of a WFOE was limited liability. This is also considered advantageous to individuals who plan to own or run a WFOE in China, as they would have protection. Having a WFOE is one of the best ways of remitting money back to the originating country of the enterprise. A WFOE allows owners to employ staff, and trade, as well as all the other actions that only a company set up by an individual in China could usually perform.


What are the ongoing compliance requirements for a WFOE?

The basic compliance requirements for a WFOE include:

  • Monthly accounting and bookkeeping;
  • Filing quarterly and monthly tax returns;
  • A renewal of documents such as the business registration certificate;
  • Examination or auditing of financial documents;
  • Tax filing;

It is a great idea to choose Hongda’s all-in-one package for life-long support to keep you compliant all year long.

How long does it take to set up a WFOE in China?

The period of setting up a WFOE may vary in different cities. Generally, it will take about 1 week or a little bit longer to register your WFOE once every material is prepared correctly. In some cities, for example, Shenzhen, the headquarter of Hongda, the process can take only 1 working day if everything goes smoothly.

What are the company seals and why they are important?

Company seals are also called company chops or company stamps. They are generally used to replace signatures as used in Western countries. A company seal is the official representative and legal evidence of the company’s activities.


The most important one of all the seals is the official company seal. It has the widest scope of use among all the seals and it stands for the company itself. All letters, official documents, or contracts issued in the name of the company can be stamped with the official seal, which will legally bind the company. Keep it SAFE!

What is the role of a supervisor in a WFOE?

Each company should have at least one supervisor, both for Chinese companies and WFOEs. The supervisor has to be Chinses citizen and should not be appointed as the general manager, board director, or financial director at the same time.


The supervisors' main role is to protect the interest of the company and the shareholders. The supervisors will above all be required to oversee the business of the company; for such purpose, supervisors have the right to check the financial affairs of the company and inspect the company's books. In general, whenever they find that the company is not running normally, supervisors are required to conduct an investigation.


Sound United

Jack Peng
Sound United Vice President > Asia Pacific

Sound United is the leading designer and manufacturer of consumer audio products in the US. Sound United has been using Hongda since 2013. Moving one’s operation to China is not a small task, But Hongda’s expert services helped us set up a company and deal with tax issues so we could get on with growing our business in no time at all, and that’s why we continue to use them today.


Business Service Guidance

Hongda Business Services helps foreign businesses looking to establish in the PRD (Pearl River Delta, Guangdong), Shanghai and Hong Kong take advantage of everything that China has to offer. We typically work with companies in Shenzhen, Guangzhou, Zhuhai, Zhongshan, Shanghai, and Hong Kong.


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