Wholly Foreign Owned Enterprise (WFOE)

A Wholly Foreign Owned Enterprise (WFOE) is a limited liability company wholly owned by the foreign investor(s). WFOEs allow foreign investors to manufacture, process, assemble, trade, distribute, deliver services or provide retailing facilities 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. WFOE’s can only be operated within the scope of business as approved by the authorities. If, at a later date, the WFOE 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.

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.”

Service WFOE:
Business Scope is determined by the service provided of the WFOE.