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Wholly
Foreign Owned Enterprise
OVERVIEW
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A
Wholly Foreign Owned Enterprise (“WFOE”) is a limited
liability company wholly owned by foreign investors. In China,
WFOEs were originally conceived for encouraged manufacturing
activities that were either export orientated or introduced
advanced technology. However, with China's entry into the WTO,
these conditions were gradually abolished and the WFOE is
increasingly being used for service providers and trading for
certain cases.
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The
board of directors is the highest decision making body of the WFOE and the
general manager who is responsible for the daily management.
Some
advantages of a WFOE :
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Independence
and freedom to implement the strategies of its parent company
and complete
management control as there is no need for a Chinese partner;
not required to share profits with another party.
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Carry
on business formally in China.
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Ability
to carry on business rather than just a representative office; pay
tax on profits only of WFOF compared with pay tax for actual
overheads for a Representative Office.
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May
receive RMB and issue invoices; May convert RMB profits into US$
for remittance offshore.
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Legal
entity status.
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Employ
staff directly.
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Greater
efficiency in its operations, management and future development;
better protection of intellectual know-how technology.
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The
information provided on this web site is for your general guidance
only. Before you take any action or decision based on this
information, you should obtain professional and legal advice which
apply to your specific circumstances. Advantage Hong Kong, its affiliates and staff do not accept any
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information on this web site. |
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