GUANGZHOU CHINA (WOFE) company:

A GUIDE TO THE INCORPORATION OF GUANGZHOU WOFE

OVERVIEW OF WFFE IN GUANGZHOU
The WFFE is a Limited liability company wholly owned by the foreign investor(s). In Guangzhou China, WFFE was originally conceived for encouraging manufacturing activities that were either export orientated or introduced advanced technology. However, with China's entry into WTO, these conditions were gradually abolished and the WFFE is increasingly being used for service providers such as a variety of consulting and management services, software development and trading as well. 

THE CONCEPT OF WOFE
The WFFE means the foreign investors (including Hong Kong and Macao investors) established the enterprises within Chinese territory, in accordance with the PRC Wholly Foreign Funded Enterprise’s Law, with capital provided solely by the foreign investor. The foreign investors could be the foreign enterprises, individuals or partners. ( including Hong Kong’s and Macao’s).

PREFERENTIAL POLICIES OF WOFE IN GUANGZHOU
1. The manufacturing enterprise enjoys tax net profit holidays for the first two years and half tax for the following three years since the company makes profit.
2. The preferential profit tax that Shenzhen offers to the WFFE is as low as 15%, while Guangzhou and other areas in China usually is 33%, in some coastal areas the rate is 22%
3.The high-tech manufacturing enterprises in Guangzhou can enjoy more preferential policies.
4. There are some preferential policies esp. for manufacturing when the manufacturers buy the land which would be used as workshop within Chinese territory.

Important Note: The preferential policies for WOFE are valid till January 1st 2008.

COMPANY’S NAME
In China, only Chinese company’s names are officially used, while English company’s names are for reference only. NOT every name will be accepted by the Industrial and Commercial Administrative Bureau (ICAB), known abroad as Company Registry. And in China some sectors need special license. It is important to know that the wording of a company’s name should be in conformity with the registered capital. If a company’s name is in the wording of “international”, “investment”, the registered capital could be as more as RMB 10 millions. While “group’’ or “holding” should be more than RMB 30 millions (The detailed information depends on the local stipulations). Your company’s name must be distinguished from the others’ if you want it to be accepted by the ICA.

REGISTERED AND PAID-UP CAPITAL
The registered capitals for trading enterprises are usually required as much as RMB 500,000 or above. For manufacturing enterprises, RMB 1 million or above is required, for consultancy and technology 100,000RMB or above is required. In China, the registered capital should be paid-up within one year, you have to pay 15% in the first three months, while pay the balance in the remaining 9 months. If the investment is large enough, you can negotiate with the government on the matter.

BUSINESS SCOPE
Before filing the documents required with the ICAB, the applicant should confirm the business scope, which ultimately appears on the business license. Amending the business scope requires further application and approval. General business scope usually includes, investment consulting, international economic consulting, trade information consulting, marketing and promotion consulting, corporate management consulting, science and technology, manufacturing, wholesaling, retailing, import and export, etc.

PROCESSING STEPS AND TIME
Fill in the application form or sign the agreement =》Payment =》Name check and reservation=》Provide documents required =》Filing the papers with the relevant government departments.=》Open bank A/C =》Certificates and Matters for collection =》Tax return service and business follow-up

DOCUMENTS REQUIRED FOR INCORPORATING WFFE INVESTED BY A NATURAL PERSON
1. One proposed company name (in Chinese), and provide two back-up names in case the first name is not available;
2. Lawyer’s notarization (Notarized by the local notarization department and approved by the Chinese embassy or consulate in their country)
3. The original and copies of ID cards or passports of the investor, legal representative, directors if any, supervisors of WFFE, and 8 pieces of 1”color photos of the legal representative;
4. Detailed information about the business scope and registered capital;
5. The original articles of association signed by members of the Board;
6. Two original bank reference letters;
7. The lease or property certification;
  For a manufacturing enterprise, the approval by the relevant government departments, such as environmental and fire departments are required. And the area should be 200square meters or above, for more than two year’s duration.
  For a trading company, the area should be at least 30 square meters, and for more than one year’s duration.

DOCUMENTS REQUIRED FOR INCORPORATING WFFE INVESTED BY A LEGAL PERSON
1. One proposed company name (in Chinese), and provide two back-up names in case the first name is not available.
2. Lawyer’s notarization (Notarized by the local notarization department and approved by the Chinese embassy or consulate in their country)
3. The original and copies of ID cards or passports of the legal representative, directors if any, supervisors of WFFE, and 8 pieces of 1”color photos of the legal representative;
3. Detailed information about the business scope and registered capital;
4. The original articles of association signed by members of the Board;
5. Two original bank reference letters
6. The lease or property certification
  For a manufacturing enterprise, the approval by the relevant government departments, such as environmental and fire departments are required. And the area should be 200square meters or above, for more than one year’s duration.
  For a trading company, the area should be at least 30 square meters, and for more than one year’s duration.

NOTARIZATION OR LEGALIZATION
For overseas company who intends to invest in China, it should be notarized by its overseas lawyers. For investors from HONGKONG or MACAU, the notarization will be valid only after being notarized by the HONGKONG or MACAU lawyers which were recognized by the Chinese government first. And then, send it to the China Lawyer Service ( HONGKONG) co., Ltd which was appointed by China Justice Department to stamp. As the overseas investors, the subject of investment should be notarized by the local lawyer and signed at the back by the local Chinese Embassy or Consulate, or it is invalid. In addition, the purpose and receiver of the notarization should be clearly indicated in it. To avoid unnecessary troubles, some overseas investors would like to set up the subject of investment in HONGKONG and finished the notarized formalities. For the legal person, two original notarizations are required. For the natural person, notarization is also necessary.

BANK REFERENCE LETTER
No matter the subject of investment is a natural person or legal person, two original Bank Reference Letters are required. Both in English and Chinese versions.

THE LEASE
The Chinese governments attach a great importance on the operating address. For a trading company, the address must be for commercial use only. As a manufacturing company, it must be for workshop use only. Each address allows to be operated by one company. Before registration, the applicant needs to summit the lease or property certification. In addition, the owner of the company should be in conformity with the owner of the property or the lessor. The lease agreement is valid only stamped by the housing authority uses the contract special purpose stamp.

Note: it is invalid to use the contract stand-by stamp for the lease agreement.

OUR SERVICES
7 copies of Investment Approval Documents;  2 copies of original articles of association signed by members of the Board and with company chop;  2 copies of foreign invest enterprise approval license;  Both original and duplicate copy of business license;  cachet, financial ,custom and legal representative private chop;  Seal carving registration card;  Opening and canceling account confirmation;  Both original and duplicate copies of Organization Code License & card;  Registration license and form of State &Local Administration of Taxation;  Foreign exchange registration license and approval certificate;  Customs declaration registration certification;  Finance registration license and form.