How to Set Up Wholly Foreign-Owned Enterprises WFOE in Haikou, Sanya Hainan China, WFOEs Registration Procedure and Document Required in Haikou, Sanya Hainan China

Hainan is the smallest and southernmost province of the People's Republic of China, consisting of various islands in the South China Sea. Hainan Island, separated from Guangdong's Leizhou Peninsula by the Qiongzhou Strait, is the largest Chinese island and makes up the majority of the province.

Haikou is the capital and most populous city of Hainan province, China. It is situated on the northern coast of Hainan. Haikou exports substantial quantities of agricultural produce and livestock. There is a small amount of industry, including canning, textiles, rice hulling, and light engineering.

Sanya lies at the southern tip of Hainan Island at Sanya Bay, In recent years Sanya has become a popular tourist destination Numerous international hotel chains are now established in the area.

Company setup in Hainan free trade zone attracts so much attention in these days. As one of China's foremost tourist destinations, and with its year-long warmth, sunshine and beautiful tropical beaches, Hainan is an excellent investment destination for entrepreneurs and businesses. The Chinese central government decreed in April 2018 that HaiNan will open a pioneering free trade zone by 2020, and a similar free trade port by 2025. It is estimated that economic growth will be more rapid than that of the Mainland in the next 5 to 10 years.

Click here for Hainan Business Setup Foreign Investment Preferential Policies

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 Haikou, Sanya Hainan 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 Haikou, Sanya Hainan 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 Haikou, Sanya Hainan China, , drafting privacy policies and structuring commercial transactions

TCBC will manage all aspects of incorporation to get you a business license in Haikou, Sanya Hainan 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

Contact Us for  Setting Up Wholly Foreign-Owned Enterprises WFOE in Hainan Now