Ningbo is a
harbor city in Zhejiang province and one of China’s most prominent ports. The
Ningbo-Zhoushan port is the fifth-largest in the world and the third-busiest in
China after Shanghai, Shenzhen and Hong Kong. It is bound by the East China Sea
and Zhoushan Archipelago in the east, by Hangzhou Bay in the north, by Shaoxing
in the west, and by Taizhou in the south. In 2007, the Hangzhou bay bridge was
built, connecting Ningbo with its neighbors. Ningbo has established intermodal
rail services that connect it to 13 inland ports. It also has the largest
specialized dock for storing liquefied chemical products in China.
Ningbo serves as the economic center for
the southern Yangtze River Delta and has been ranked among the most competitive
cities in China. The municipal government of Ningbo encourages foreign
investment and various multinational corporations (MNCs) have established
operations in and around Ningbo. In 2013, Ningbo’s GDP reached US $108.3
billion (RMB 712.89 billion), up 8.1 percent year on year with an annual growth
rate of 9.26 percent. Ningbo’s exports totaled US $65.7 billion while imports
amounted to US $34.6 billion. The city ranked second in economic performance
for Zhejiang province in 2014, trailing only Hangzhou
Ningbo has a sister city relationship
with four cities in the U.S. – Wilmington, Delaware (1988), Houston, Texas
(2000), Milwaukee, Wisconsin (2006) and Norfolk, Virginia (2013).
WFOE stands for
wholly foreign owned enterprise, which is a limited liability company wholly
owned by either a foreign legal entity or a foreign natural person. The foreign
investors may be foreign enterprises or individuals.Wholly owned foreign
entities (WOFEs) are the vehicle of choice for most people and companies doing
business in China. It is less complex than a joint venture (JV) and allows you
to concentrate on what your employees are up to as opposed to your partners. It
is required to register as a legal person who is restricted to certain
businesses. The enterprise is able to implement strategies that effectively
conform to the interests of the parent company aboard. Moreover, technology and
know-how are given better protection.
No. minimum registered capital is required for WFOEs with scope of business of consulting, Trading, retailing, information technology etc. in China. There are minimum registered capital still required for some industries for instance: Banking, Forwarding etc Since China still maintains foreign currency control policy, it's still advisable to choose registered capital within RMB 100,000 ~ RMB 500,000 as the minimum registered capital. Companies can now determine how much capital will be required to maintain their operations and must simply ensure that they meet those targets within a period of 10 years.
Advantages of WFOE
1. Independence and freedom to implement the worldwide strategies of its parent company without having to consider the involvement of the Chinese partner;
2. Ability to formally carry on business rather than just a representative office function;
3. Issue invoices to their customers in RMB and receive RMB revenues. Convert RMB profits to US dollars for remittance to their parent company outside.
4. cheap labor, which can lower your cost;
5. not required to share profits with Chinese counterpart;
6. Greater efficiency in its operations, management and future development.
The procedure to Setting up WOFEs in
Ningbo China
Stage 1: Preliminary approval - Project
Proposal
The application procedure for setting up
a WOFE is simpler. The project proposal will be prepared by the foreign
investors and submitted directly to local authorities. The foreign investor may
appoint a local agent to liaise with the government. To do so, he has to sign an
authorization letter stipulating the agent’s scope of services, responsibility
and fees.
Generally, the authority will give an
official reply within 30 days upon receipt of the proposal and other relevant
documents. The approval or rejection letter will be issued to the foreign
investor. If a favorable reply is received, the foreign investor can proceed to
register the company’s name at the local AIC.
The report must contain information
regarding the objectives of the WOFE, business scope, scale of operation,
products to be produced, technology and equipment to be used, land area
required, conditions and quantities of water, electricity, gas and other forms
of energy resources required, and requirements for public facilities.
Stage 2: Formal approval - Articles of
Association
After the foreign investor receives a
written reply from the relevant government authorities, a formal application
supported by all the required documents should be filed with the local Ministry
of Commerce at a county, municipal or provincial level. After receiving the
formal approval, the foreign investor should apply to the Ministry of Commerce
again for an approval certificate by presenting all the necessary documents.
The required documents include the
application letter for establishing the WOFE; a feasibility study report (if
any), articles of association, list of legal representatives (or Board of
Directors), the foreign investor’s legal papers and credit report, a list of
materials to be imported, written replies from the local approval authorities
at county level or above, application for registration of the name of the
enterprise approved by the provincial or municipal administration AIC, comments
on the project by various government departments such as environmental
protection, fire services, health and land administration. In the case where
two or more foreign investors are involved, copies of the contracts signed by
them should be submitted to the approval authority for their records.
Stage 3: Business License
Upon collection of the approval
certificate, an application for a business license has to be filed with the
provincial or municipal AIC within 30 days. The local AIC will issue the
business license within 10 working days to projects that have passed the
examination. Likewise, the date the business license is issued will be
considered the official date of the establishment of the enterprise.
Having acquired the business license,
the WOFE has to finish up with procedures such as applying for an official seal
and enterprise code, opening a bank account, and registering for tax payment
and customs declaration with the local public security, technical supervision,
taxation, customs, finance, foreign exchange administration, banking, insurance
and commodity inspection departments.
Compared to registering a business in
most Western countries, registering a business in China is challenging work
filled with paperwork and bureaucratic red tape. It is practically impossible
to properly complete the registration process without a qualified agency. Be
sure that the agency is qualified and the agency has good connections and
relationships with the various local authorities, and that they possess
comprehensive knowledge about the numerous important aspects involved with
legally and properly registering a WFOE
Tommy China BusinessConsulting has direct
connections in the local government
Since 2006, TCBC has been focusing on consulting services for our clients to invest in Ningbo China. We are specialized in establishment of wholly foreign owned enterprises (WFOEs), setting up of offshore companies, trading services, tax minimization Assist in obtaining government approvals and certificates for running business, negotiate and draft various legal documents provide legal advice, negotiate government officer for Land acquisition,Advising on formation of WOFE and business structures ,managing and controlling WOFE in Ningbo China, , drafting privacy policies and structuring commercial transactions. TCBC will manage all aspects of incorporation to get you a business license in Ningbo China. We offer a range of company formation services including helping you to set up:
Since 2006, TCBC has been focusing on consulting services for our clients to invest in Ningbo China. We are specialized in establishment of wholly foreign owned enterprises (WFOEs), setting up of offshore companies, trading services, tax minimization Assist in obtaining government approvals and certificates for running business, negotiate and draft various legal documents provide legal advice, negotiate government officer for Land acquisition,Advising on formation of WOFE and business structures ,managing and controlling WOFE in Ningbo China, , drafting privacy policies and structuring commercial transactions. TCBC will manage all aspects of incorporation to get you a business license in Ningbo China. We offer a range of company formation services including helping you to set up:
-Wholly Foreign Owned Enterprises (WFOE )
-Representative Offices
-Joint Ventures (Equity/Co-operative)
-Foreign Invested Partnership Enterprises (FIPE)
-Hong Kong Holding Company
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