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Frequently Asked Questions
Wholly Foreign Owned Enterprises (WFOE)
A Wholly Foreign Owned Enterprise (WFOE) is a Limited Liability Company established in China by foreign investor(s). A WFOE is very much like a LLC in the USA that it requires one member only.
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The registration procedures of a Wholly Foreign Owned Enterprise (WFOE) could be divided into 3 phases: aproval phase, registration phase and post-establishment phase.
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A Wholly Foreign Owned Enterprise (WFOE) could be terminated by way of liquidation or deregistration by its investor(s) or when the conditions of termination in its Articles of Association occurs.
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China Taxation
Under the current tax system in China, there are 25 types of taxes which could be divided into 8 categories. The major ones are Business Tax, Value Added Tax and Enterprise Income Tax. More
Representative Offices are also liable for Business Tax and Enterprise Income Tax. However, a RO could be exempted if its parent company is in the manufacturing business.
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Any individual who has domicile in China or who has no domicile in China but has resided in China for one year or more shall pay Individual Income Tax on his world-wide income.
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CHINA BUSINESS REGISTRATION
WHOLLY FOREIGN OWNED ENTERPRISES


Powers and Reponsibilities of Board of Supervisors
(Supervisory Board)

(1) Composition of Board of Supervisors

As an internal supervisory body, the BOS (Board of Supervisors) is designed to closely monitor the directors, managers and other officers. Both CLS and LLC except the SMEs shall have the BOS with no less than three supervisors. The directors, managers and financial officers may not act as supervisors. Unlike the BOD, the BOS must have representatives from both the shareholders and employees. The shareholder's representative(s) is/(are) elected by shareholders, while the employee's representative(s) is/(are subject to democratic election by the employees. The term of office of the supervisors is uniformly three years. The supervisors are eligible to offer themselves for re-election upon expiration of their terms of offices.

(2) Powers and Functions

The powers and functions of the BOS in both LLC and CLS are identical. In order to discharge its powers and functions the supervisors may attend the BOD meetings, but have no right to vote so as to keep informed. Of course the supervisor shall fulfil his duties faithfully in accordance with the laws, administrative regulations and the articles of association. That is to say, the monitors shall also follow the law and be monitored.

Please feel free to Contact Us for further information.

Hong Kong Head Office              Room 803, Futura Plaza, 111 How Ming Street, Kwun Tong, Hong Kong
                                                 TEL +852 2341 1444      FAX +852 2341 1414      E-mail info@bycpa.com

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