1. OVERVIEW OF GUANGZHOU
Guangzhou is the capital city of Guangdong Province, the political ?economic and cultural center of south China as well as the wholesale market worldwide. It is located in the north of the Pearl River Delta, adjacent to Hong Kong and Macao. Guangzhou has an area of 7,434.4 Square Kilometers and with a population of more than 10 million. Recent years, Guangzhou has paid highly attention on the basic infrastructure and ecological environment construction. The GDP of Guangzhou exceeded RMB800 billion in 2008, so it is being considered to be an ideal city for investment.
2. THE CONCEPT OF WFOE
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 from Hong Kong, Macau, Taiwan or overseas.
3. COMPANY NAME
In Guangzhou China, only Chinese company names are officially used, while English company names are for reference only. Not every name will be accepted by the ICAB (Company Registry). For some sectors such as education, logistics, medicine and food industries, a special pre-approved license is needed. It is important that you know the wording of a company name should conform to the registered capital and business activities. The words "international" or "investment" or "industrial" within a company name suggest that the registered capital should be more than RMB 10 million, while a "group'' or "holding" should be more than RMB 30 and 50 million respectively.(The detailed information depends on the local stipulation). Your company name must be distinguished from the other registered names. If the word “China” is within the company name, it is required to be pre-approved by ICAB at national level in Beijing.
4. SHAREHOLDER,DIRECTOR, MONITOR &LEGAL REPRESENTATIVE
Shareholders, directors, monitor and legal representative should be considered and arranged before the business setup.
1. A shareholder could be a legal person (foreign company) or a natural person (individual).
2. A director could be acted by a foreign person or a Chinese person.
3. A monitor should be appointed to supervise the company’s operation and management. A monitor could be acted by a foreign person or a Chinese person.
4. A legal representative is a person in charge of corporate operation, management and development, responsible for all the legal affairs arising from the running of the business. The position could also be held by non-shareholder or non-director.
5. BUSINESS SCOPE
The WFOE can conduct business within its approved business activities described on the business license. We will help you for more business activities during the application. Amending the business scope requires further application and approval. Generally speaking, different business activities are confined according to different business sectors.
6. REGISTERED AND PAID-UP CAPITALS
In Guangzhou China, the registered capital could be as low as RMB 30,000 yuan. Different business sectors are subject to different requirements. In Guangzhou, the registered capital is equal to the paid-up capital. For the trading enterprise, the registered capital is usually required RMB 1 million or above. For the manufacturing enterprise, the registered capital is usually required RMB 1 million or above. For the service sector, such as consultancy, technology, market research and development, the registered capital is usually required RMB 800, 000 or above. All of the registered capital can be paid in one time (within 3 months after the date of the issuance of the Company's business license) or be paid for many times within two years (In the first 3 months, 20% of the registered capital is mandatory). The terms of payment is determined by the volume of registered capital. If the registered capital is paid in one time, the fee of paid-up capital verification can be reduced.
7. PREFERENTIAL POLICIES FOR WFOE IN GUANGZHOU
Although most of the preferential policies have been abrogated since January 1st, 2008, but for some sectors within some free trade zones or hi-tech development zones, qualified enterprises are still enjoying tax holidays or special financial subsidies. In 2009, preferential policies for business outsourcing sector in the 20 cites around the country are good news and good chances for those who are interested in the service industry. For more information, you are welcome to contact us.