A Wholly Foreign Owned Enterprise (WFOE) / Foreign Invested Commercial Enterprise (FICE) is a limited liability company wholly owned by the foreign investor(s). WFOEs / FICEs allow foreign investors to manufacture, process, assemble, trade, distribute or deliver services in China, without joining together with a Chinese partner.
Setting up a Limited Company does not necessarily mean that you can engage in any sort of activities, as may be the case in the West and certainly in Hong Kong.

WFOEs / FICEs can only be operated within the scope of business as approved by the authorities.
If, at a later date, the WFOE / FICE wishes to add other activities, these are subject to further approval by the relevant government authorities. It is therefore very important from the onset of your establishment to determine what will be the functions of the WFOE / FICE.
The difference between a WFOE and FICE business scope is that the FICE is able to have distribution rights (ie. import and export rights) included into the business scope.

Business Scopes of Companies
(The following are examples. It can vary depending on the activities the Company would like to perform.)

Trading WFOE (within a Free Trade Zone):
"The Business Scope of the Company shall mainly be involved in: international trade, transit trade, foreign trade and trade agency between enterprises in the Zone; foreign trade agent business for domestic enterprises with self-export and import operating rights with enterprises outside the Zone; simple commercial processing business in the Zone as well as commercial consulting services for enterprises in the Zone (only those approved by the Administration of Industry and Commerce)."

Trading WFOE with distribution rights (FICE):
"The Business Scope of the Company shall mainly involve: the import and export of commodities; wholesale and/or retail of the engaged commodities"

Manufacturing WFOE with/without distribution rights:
"The Business Scope of the Company is: Produce and develop a certain product(s), sell self-made products and provide the related technical consulting service."