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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 FOREIGN INVESTMENTS
CITY INFORMATION - SHANGHAI


Shanghai Representative Office

Required Application Documents for Registration of Representative Office in Shanghai, China

Foreign enterprises apply to establish resident representative office should provide the following documents:

1. Two Sets of Application (original)
Application for establishing the representative office in Shanghai should be signed by the chairman of the board or the general manager of the enterprise, including the brief introduction of the enterprise, the purpose / reason for establishing the representative office, the name of the office, business scope, the name of the chief representative / resident representative, term of residence, the address of office.

2. Two sets of Business License (copy)
The Business Licence should be issued by the department concerned in the their country (for the Hong Kong enterprises, they should offer the certificate of incorporation and the business registration certificate valid for the year).

3. Two sets of Certificate of Capital Credit (original)
Issued by the financial institution which has business relations with the enterprise, including the amount of the registered capital, deposit digital number, the date when the account was opened and the enterprise's credit status.

4. One company constitution (copy)

5. Two sets of Certificate of Authority and the Resume of the chief representative or the resident representative (original)
The certificate of authority authorizes the chief representative or the resident representative, the resume shows the education background and the working experience of the authorized, both of which should be signed by the chairman of the board or the general manager of the enterprise. Besides, their passports and their identity cards (duplicate), eight two-inch bareheaded full faced photos of the authorized are necessary. (However, seven photos are needed for Taiwan company)

6. Two sets of contract of rent or purchase office location (copy).
Two sets of certificate of nominated location for handling official business which issued by Shanghai municipal people's government foreign economic relations & trade commission (copy).
Two sets of certificate of real estate of lessor (copy).
Certificate of residence for office location issued by lessor (original).

7. Two sets of Authorization letters for the chief representative and representatives (original)
The document should be signed by the chairman of the board of directors or the general manager of the enterprise). 2 sets, one for Shanghai municipal people's government foreign economic relations and trade commission, the other for Shanghai administrative bureau for industry and commerce.

8. Company brief introduction

9. Provide other application material which is defined as necessary by the examination and approval authorities.

Note:
A. The application, the certificate of entrustment, the certificate of authority and the resume of the authorized should be written on the office letter paper of the enterprise, and affixed with seal and signed by the chairman of the board or the general manager of the enterprise.
B. The copy of the business license should be signed by the chief of the company and also be stamped.
C. The certificate of capital credit issued by the bank should by affixed with seal and signed by the chief of the bank.
D. As to the chief representative, his or her passport or the home-return card for compatriot is needed.
As to the freight forwarder company, not only should offer the membership certificate of international federation of freight forwarders associations , but also might provide the agent agreement with the class first freight forwarder in Shanghai , if it is the subordination of the Sino Transportation Group, the approval from the group is indispensable.

The recommended structure of the documents and materials concerned
(should be written on the office letter paper of the enterprise)

Material 1

The application for establishing the representative office in Shanghai

Shanghai foreign economic and trade commission:
Shanghai industrial and commercial administration:

Dear sirs:

Our company is a legal company registered in … (country or region) which mainly specializes in … business and established good economic relations with Shanghai. For further developing business with Shanghai region, hereby our company applies to establish office in Shanghai and entrust … as undertaking company.
1. Name of the office: … Shanghai representative office
2. Business scope: … liaison
3. Chief representative:
4. Address of the office:
5. Term of residence: (max. 3 years)
We report to you and look forward to your approval.

Material 5:

Certificate of Authority

For the need of the business, We … hereby appoint Mr. … as our lawful chief representative for the Shanghai representative office and entrust him with full power of authority would be …
Thanks in advance!

Resume

Name:
Date of birth:
Birthplace:
From … to … (education background)
From … to … (working experience)

Material 7:

Certificate of Entrustment


We …, hereby authorize … to establish our representative office in Shanghai.

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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Shanghai Office   TEL +86 (021) 64394114 64399276 FAX +86 (021) 64394414
Beijing Office   TEL +86 (010) 68748420 68748422    FAX +86 (010) 68748421