WFOE in Shenzhen

WFOE stands forwhollyforeign owned enterprise. The Wholly Foreign Owned Enterprise (WFOE) isaLimited liability company wholly owned by the foreign investors. InShenzhen,WFOEs were originally conceived for encouraged manufacturingactivities thatwere either export orientated or introduced advanced technology.Any enterprisein Chinawhich is 100% owned by a foreign company or companies can be called asWFOE.Shenzhen, as one of the best developed economic zone in mainland China,hasmany benefits for WFOE setup.

AdvantagesofShenzhen WFOE

1.Independence and freedomto implement the worldwide strategies of its parentcompany without having toconsider the involvement of the Chinese partner;

2.Ability toformally carry on business rather than just a representativeoffice function;

3.Issue invoicesto their customers in RMB and receive RMB revenues. ConvertRMB profits to USdollars for remittance to their parent company outside.

4. Cheap labor,which can lower your cost;

5.not required toshare profits with Chinese counterpart;

6.Greaterefficiency in its operations, management and future development.

Different TypesofWFOE in Shenzhen

Following aredifferent types of WFOE:

1.If the WFOE onlybe allowed to manufacture here. We can say it'smanufacturing WFOE.

2. If the WFOE isallowed to do Consulting & Service, we call themConsulting WFOE.

3. If the WFOE isallowed to do Trading, Wholesale, Retail or Franchise inChina, we call4.Trading WFOE or FICE (Foreign-Invested Commercial Enterprise)

Name ofShenzhenWFOE

Choosing thebusiness name The official company name of a WFOE in Shenzhenshould be inChinese. The Chinese name should be formatted as: first word-companyname/product (For instance: MCK; second word: activity (For instance:businessconsulting); third word: location/name of city (For instance:Shanghai,Beijing);fourth word - company structure. (For instance: Co., Ltd.)With that a companycalled MCK register in Beijing engages BusinessConsultingService LLC will be called: MCK business consulting (Beijing) Co., Ltd. Thename then has to beregistered with the local Administrative Bureau forIndustry and Commerce(SAIC).