CentreO Blog

SHAREHOLDERS

 WFOE requires one shareholder/member, whose details are registered in the local Administration for Industry and Commerce. The director can be of any nationality, except Chinese, and meetings can take place anywhere.

DIRECTOR/BOARD OF DIRECTORS

A minimum of one director is required, whose details must be registered in the local Administration of Industry and Commerce. The sole director is the executive director or managing director, who can be of any nationality and reside anywhere.  Corporate director is not allowed.

There are no requirements to hold meetings within China.

If the director decides to set up a board of directors, there is a minimum requirement of three directors and the maximum limit of 13.

LEGAL REPRESENTATIVE

A WFOE is required to appoint a legal representative, whose full details should be registered in the local Administration of Industry and Commerce. A legal representative can be of any nationality and does not have to be a resident of China.

SUPERVISOR/BOARD OF SUPERVISORS

A WFOE is required by Company Law to appoint at least one supervisor, who can be of any nationality and does not have to be a resident of China.

The minimum requirement for registered capital is RMB 30, 000 (USD 4, 950). Under the company’s laws the paid-up capital is equal to the registered capital. Investors and shareholders must contribute the full amount of registered capital and deposit the money into a specified bank account in the name of the WFOE.

In case of a service-type company in Shenzhen, the minimum registered capital required is RMB 100, 000 (USD 16, 400).

The investor has two options as to the timing for contribution of the registered capital.

–       The investor can choose to contribute the capital in one installment within 6 months after the date of incorporation

–       OR the investor could choose to do that in two installments within a period of two years. The first installment must be more than 20% of the registered capital and contributed within 3 months. The balance should be paid within 2 years after the date of incorporation.

Note: The amount of registered capital should be audited by a firm of certified public accountants. This is called contribution verification.

WFOE is a Wholly Foreign Owned Enterprise, which is a limited liability company fully owned by foreign investors.

In China WFOEs were originally conceived for encouraging manufacturing activities that were export oriented or introducing advanced technology. However, with China’s entry into the WTO, these conditioned were extended, and now a WFOE is increasingly being used for service providers (consulting, management, software development, trading and more).

WHAT ARE THE RESTRICTIONS ON SERVICES FOR A WFOE IN CHINA?

Wholly Foreign Owned Enterprises in China are allowed to engage in business activities, outlined in the Articles of Association and Business License.

Business scope in narrowly defined for all types of enterprises in China and the WFOE can only do business within its defined business scope, which appears in the business license. Any changes to the business scope require additional applications and approval.

General business scope usually includes: investment consulting, international economic consulting, trade information consulting, marketing and promotion consulting,  technology consulting, manufacturing, trading and so on.

ARE THERE ANY RESTRICTIONS TO NAMING A WFOE?

Your company’s name will need a pre-approval. It is possible to reserve a name of the proposed WFOE for a long as six months. You should also check that there is no similar or identical name on the register.

You are a young ambitions college graduate, ready to take on the working world. You are looking for a summer internship to get experience and are being luckily presented with two options: Google or a small startup in somebody’s  garage. What do you choose? It seems like a no-brainer. Yet, according to a recent article in Muse, there is more to the question then it seems.

“There’s a lot to be gained by working for a smaller company, especially when you’re first making your entrance into the workforce. Working for an up-and-coming tech company may not have the brand-name recognition that your friends in finance and consulting are looking for, but it will give you a host of real-life experience that will be hard to get in any other industry. Here are just a few reasons why working for a startup this summer makes a ton of sense”.

1. Real Responsibilities

Unlike a big company, most startups are always in lack of time and human resources. This means you will be assigned more responsibilities and will be working on projects that directly impact users.

Being thrown out in the field like that may be scary, but it has a lot of benefits. You will be able to show ownership of important projects and you’ll gain the confidence and independence to run them.

2. You’ll learn how companies work

Being part of a small team, means that you will naturally be involved in every part of the company and will stay in the loop, whether it’s overhearing debated in the conference room or chatting with the CEO over lunch.

As an intern in a large company, your exposure will probably be limited to the small section of the company where your primary responsibilities lie.

3. You’ll Get To Try Our Multiple Paths

If you are still not sure about what you want to do as a career, working in a startup can give you a great tour of various fields and titles. As a marketing intern, you may find yourself writing blog posts (communications), researching keywords (marketing research and SEO) or managing client account (sales and customer service).

You will also be in close contact with people working in different departments and areas, giving you a chance to learn more about alternative career paths.

4. You’ll Build Great Contacts

A great thing about startups, is that with a smaller number of employees, you’ll probably get to know everyone. And these people could turn into great friends and business contacts for years to come.

And even if the startup you interned for does not make it, you’ll walk away with an extensive knowledge of the industry and connections that may help to get you your next internship or even a future full-time job.