Formation of China Company

There are 2 common ways for you to set up a company in China:

1. Set up a Wholly Owned Foreign Enterprise (WOFE)
2. Set up a Representative Office (RO)

Wholly Owned Foreign Enterprise (WOFE)

It is an independent legal entity in China with limited liability, wholly owned by one or more foreign investors and established entirely with foreign capital. "WFOEs" can carry business within its registered business scope. This kind of company is increasingly being used for service providers such as a variety of consulting and management services, software development and trading.

Capital requirement for “WFOEs”

Nature of business	Minimum capital requirement (RMB)
Consulting	0.1 – 0.5 million
Service	0.1 – 0.5 million
High Technology	0.1 – 0.5 million
Wholesales	0.5 – 1 million
Retails	0.5 – 1 million
Food and Beverage	0.5 – 1 million
Manufacturing	0.5 – 1 million

Representative Office (RO)

RO" is formed for engaging business liaisons, quality control, product promotion, market research, exchange of technology and other permitted activities in China. It may be a "Entry Level"to start business in China by "RO". But "RO"is not allowed to directly engage in operational activities like issue invoices and get payment from customers.

“RO” Functions

• Conduct research and survey for its parent
• Liaise with clients in China on behalf of its parent
• Provide data and promotional material to potential client and trading partners
• Act as coordinator for its parent’s activities in China
• Make travel arrangements for parent’s representatives and client