Every time that the word China is mentioned, most people, especially entrepreneurs, will be quick to tell you it is the fastest emerging hub for manufacturing. Indeed, it is not just in manufacturing but almost all other industries, from hospitality to technology. The nation is very attractive to some of the globe’s biggest conglomerates because of its supportive regimes and numerous opportunities for growth. However, there are so many challenges along the way, which partly explains why some investors fell on the way five years after WFOE set up in China.
This post takes a closer look at WFOEs in China to establish how you can successfully open one and achieve massive growth in no time. It is time to move to this high-potential nation and see your business burgeon into a multinational.
Challenges on the Way of WFOE’s Setup in China
A WFOE is a type of legal business structure where the foreigner/s has 100% shareholding. This means that you get full autonomy in making the decisions about the company. Unlike a representative office (RO), which bans profit-making deals, a WFOE is completely different. Despite its unique design and freedom of operations, opening a WFOE comes with a host of challenges, including the following:
- The process of registration is complex.
- The list of documents required for company registration is long. Some of these documents, such as the feasibility report, and articles of association, can be pretty challenging for people outside the legal field.
- You have to deal with multiple offices and departments for a WFOE set up in China.
- Selecting a good location for a WFOE can be challenging, especially with the fast-changing legislation.
- A WFOE set up in China can also be pretty expensive, especially when you have to make multiple trips to different offices. With limited capital, it might be challenging to meet all business obligations and take advantage of emerging opportunities.
The Main Requirements for a WFOE Set Up in China
Before looking at the best method of overcoming the challenges of setting up a WFOE, it is important to appreciate the process of company registration. Here are the main steps that you have to follow when registering a WFOE in China.
- Select the preferred company scope and name.
- Carry out a feasibility study and prepare a report.
- Prepare all the documents required for registration. These include a list of controlling partners, managerial structure, articles of association, legal address, registered capital, and details of the shareholders and directors.
- Apply for an approval certificate from the State Administration of Industry and Commerce (SAIC) and Ministry of Commerce (MOFCOM).
- Apply for a business license certificate.
- Register with the Public Security Bureau for company chops.
- Open a bank account.
- Get additional permits, where necessary.
Use Primasia to Overcome Challenges of Company Set Up in China
For most entrepreneurs, the long process or registration is pretty scary, but there is a simple and convenient method of overcoming every challenge on the way. Primasia is an agency of experts that was designed to help make company registration in China smooth. So, do not keep worrying about how to prepare the documents, deal with different departments, or get an address because Primasia has got you covered.
When it comes to cutting down costs, Primasia will also come in handy. The agency is way cheaper compared to trying to register a company on your own. So, let the experts handle company registration as you direct more efforts into growing the capital base for supporting the company after registration.
Note that Primasia will not leave you alone after a WFOE set up in China as explained here. The experts will be there to help with the formulation of new market entry strategy, accounting, tax matters, and payroll management. Visit Primasia now for all the assistance you want with company registration.