1. THE CONCEPT OF Wholly Foreign Owned Enterprise
WFOE stands for wholly foreign owned enterprise, which is a Limited liability company wholly owned by the foreign investor(s). WFOE means the foreign investors(including Hong Kong, Macau, Taiwan) established the enterprise within Chinese territory, in accordance with 《PRC Wholly Foreign Owned Enterprise Law》, with capital provided solely by the foreign investor. The foreign investors refer to the foreign enterprise, individual or partner. (Including Hong Kong, Macau and Taiwan).

In Guangzhou China, WFOE 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 such as a variety of consulting and management services, software development and trading as well.

2. COMPANY NAME
In China, only Chinese company names are officially used, while English company names for reference only. Not every name will be accepted by the Company Registry. For some sectors such as education, logistics, medicine and food industries, pre-approval special license is needed, it is important for you to know the wording of a company name should be in conformity with the registered capital and business activities, such as with the words "international" or "investment" or "industrial" within a company name.

Your company name must be distinguished from the others registered name before. If the word “China” within the company name, must do pre-approval by CICB at national level in Beijing.

3. SHAREHOLDER, DIRECTOR, SUPERVISOR AND LEGAL PERSON
A shareholder could be foreign company or individual.
A director could be acted by foreign person or Chinese person.
A supervisor should be appointed to supervise the company’s operation and management. A supervisor could be acted by foreign person or Chinese person. But the supervisor can not be the same person with director, legal person or general manager.
Legal Person is a person in charge of corporate operation and management and development, responsible for all the legal affairs arising from the business running.

4. BUSINESS SCOPE
One of the most important issues covered in the project documentation is the business scope of the WFOE. Business scope is narrowly defined for all businesses in Guangzhou China and the WFOE can only conduct business within its approved business scope on the business license. Amending the business scope requires further application and approval if it is not available.

General business scope usually includes, investment consulting, international economic consulting, manufacturing, products wholesale and import and export, logistic service, etc. Cucheng Service Group would help you to standardize the business scope to insure your business activities in Guangzhou.

5. REGISTERED AND PAID-UP CAPITALS
In China, the registered capital is related to the business sector. For the manufacturing enterprise, the registered capital is usually required RMB 500,000 or above. For the trading enterprises, the registered capital is usually required as much as RMB 500,000 or above. For the service sectors, such as consultancy, technology, market research and development, the registered capital is usually required RMB100, 000 or above. All of the registered capital can be paid in one time (within 6 months after the date of the issuance of the Company's business license) and can also be paid for many times in two years (In the first 3 months, 15% of the registered capital is mandatory). The terms of payment is determined by the volume of registered capital. The fee of paid-up capital confirmation will be reduced if the registered capital can be paid in one time.

6. PREFERENTIAL POLICIES FOR WFOE in Guangzhou
Most of the preferential policies have been abolished since January 1, 2008, but for some sectors preferential policies still remain there, such as hi-tech or environmental protection sectors.