How to Set Up a WFOE in China: A Quick Guide

China’s vast consumer market and rapidly evolving economy make it an attractive destination for foreign investors. One popular structure is the Wholly Foreign‐Owned Enterprise (WFOE), which allows complete foreign ownership and direct control over day‐to‐day operations. However, as with any major business move, navigating the setup process can be confusing at first. Below, we’ve put together a general timeline and checklist to help you understand the core requirements of forming a WFOE in China.

1. Name Check (1–3 Working Days)

Before you begin the application process, you must confirm that your chosen business name is available. This search is conducted at the local Market Regulation Administration (formerly known as the Administration for Industry and Commerce, or AIC).
Tip:

Prepare a few alternative names in advance; if your top choice is taken or doesn’t meet certain requirements, you can switch quickly without prolonging the process.

2. Obtaining a Business License (15–25 Working Days)

Once your preferred name is approved, you submit formal documents to the local Administration for Industry & Commerce for your business license. This license officially registers your company, stating its scope of operations, legal representative, and other essential info.
At a Glance

Scope of Business: Must align with China’s regulations on encouraged, restricted, or prohibited industries for foreign investment.

Legal Representative: Often a company’s director or CEO; this individual will sign official documents on the WFOE’s behalf.

3. WFOE Approval Certificate (7–10 Working Days)

In some regions, you may need an additional approval or filing from specific government bodies (e.g., local Economy, Trade, and Information authorities). While requirements vary by location and industry, you typically apply after obtaining your business license.
What It Involves

Confirming the scope of the WFOE’s business fits within local foreign‐investment guidelines.

Submitting any needed clarifications about your shareholding structure or initial registered capital.

4. Company Seals (3 Working Days)

In China, company chops (or seals) carry legal authority: they’re used in contracts, official letters, and transactions. Once you have your business license, you work with an authorized seal‐making provider to create:

Legal Representative Seal

Company Seal

Financial Seal

They’ll register these seals with Public Security Bureau records, ensuring legitimacy.
Note: These seals effectively act like signatures in Chinese business culture—keep them secure.

5. Tax Registration (3 Working Days)

Tax registration is handled at the local Tax Bureau. In most locales, you’ll register your WFOE’s accounting method, VAT or other applicable taxes, and designate a financial officer.
Typical Steps

1. Provide your business license and legal representative ID.

2. Submit proof of your company’s location and a short explanation of your expected transactions.

3. Align on bookkeeping methods, tax categories, and invoicing procedures (often with fapiao, the official Chinese tax invoice system).

6. Foreign Exchange Certificate (7–14 Working Days)

When opening your bank account in China, your business may be required to secure a foreign exchange certificate through the bank itself (depending on the bank’s policy and local practice). This certificate enables your WFOE to handle foreign exchange transactions more smoothly—important if you’re planning cross‐border deals or investments.

7. Opening a General Bank Account (15 Working Days)

With your WFOE license, tax registration, and (if applicable) foreign exchange certificate in hand, you can open a corporate RMB account for daily operations. Bank requirements differ slightly, but expect:

Application Documents: Business license, legal representative’s ID, official company seals.

In‐Person Verification: The legal rep may need to visit the branch to sign paperwork and confirm identity.

Tip: Choose a bank familiar with foreign business clients if possible—they’ll be quicker to answer questions regarding international wires or currency conversions.

8. Additional Licenses (15–20 Working Days)

Depending on your activities, you might require further approvals, such as:

Import/Export Licenses for trading physical goods.

E‐port IC Cards for quality inspection or quarantine registration, relevant to particular industries (like food or cosmetics).

If your WFOE focuses on trading, manufacturing, or certain specialized fields (e.g., medical equipment), factor in these extra steps and extended timelines.

Documents You’ll Typically Need

Shareholder Identification:

If the shareholder is an individual: A copy of the passport.

If the shareholder is a foreign company: Certificate of Incorporation (or equivalent), authenticated by local authorities and the Chinese consulate in that jurisdiction.

If the shareholder is a Hong Kong–registered company: Hong Kong Certificate of Incorporation, Business Registration Certificate, plus NC1 or Annual Return (whichever confirms your current directorship/shareholding).

Registered Address Evidence: Lease agreement or proof of a physical location in China.

Appointment Letter for the company’s legal representative and finance manager.

Articles of Association outlining share distribution, registered capital, management, and scope of business.

Tips for a Smooth Setup

1. Plan for Timelines:
   Each stage has a separate authority, from Market Regulation Administration for the name check to specialized bureaus for import/export. Delays at one step can affect the next—build a bit of buffer time into your schedule.
2. Draft Your Business Scope Carefully:
   Overly broad scopes might face delays, while too narrow a scope can limit future growth. Aim for a balanced description that accurately reflects your mid‐term intentions.
3. Maintain Good Communication:
   Local staff or a reputable service provider can bridge language gaps and help keep processes on track. Even small details like the correct formatting of foreign names or properly authenticated documents can speed up approval.
4. Prepare for Regulatory Changes:
   China’s regulatory framework evolves. Make sure to consult recent guidelines or a professional service if you’re reading this well after 2018, as specifics (like required forms or time frames) could shift.

Getting Expert Help

If this process seems intricate, you’re not alone. Many foreign founders rely on professional registration consultants or business service providers to streamline the bureaucratic puzzle. Here at HIBC, we’ve guided numerous international clients through company name checks, licensing procedures, bank account openings, and more, ensuring each step is completed on schedule and in full compliance with Chinese regulations.

Ready to Get Started?
Whether you plan to establish a small trading WFOE or a larger subsidiary in China, our team can help tailor the registration timeline, gather required documents, and coordinate with local authorities on your behalf. Contact us for a consultation, and we’ll make sure your WFOE setup is smooth from day one.

By following the steps above and preparing the necessary documents in advance, you’ll be better positioned to launch a successful WFOE in mainland China. With the right support and a clear roadmap, the vast opportunities of China’s market can soon become a core part of your global strategy.