China is emerging to be one of the leading economies in the entire world. Investment is one of the main areas which boosts the growth of the Chinese economy. Investments from various areas take place everyday in the mainland China region. Therefore, there has to be a regulatory body that will make the process of the investment easier, and the investors do not face any trouble while investing.
Wholly Foreign Owned Enterprise, known as the WFOE is responsible for looking into the investment activities in the Mainland China region. It is very important that certain laws are made for its’ regulation.
Factors To Be Kept In Mind For The Formation Of WFOE
There are several steps to be taken for the formation of WFOE which are:-
Wholly Foreign Owned Enterprise, known as the WFOE is responsible for looking into the investment activities in the Mainland China region. It is very important that certain laws are made for its’ regulation.
Factors To Be Kept In Mind For The Formation Of WFOE
There are several steps to be taken for the formation of WFOE which are:-
- A Legal Representative Has To Be Elected:- This is the first step towards the formation of the WFOE in China. The legal representative will play an important role in looking into the overall investment activities that take place in the mainland China. He has to be elected based on the criteria such as, he has to be either the chairman of the board of the directors, or an executive director of the companies, or a general manager. In many cities, only the chairman of the board of directors can become a legal advisor as well.
- Formation Of A Pre Bank Account:- Mostly, WFOE is not usually allowed to form a bank account until it is completely functional. But most of the investors incur their profit and the losses during the formation itself. Keeping this in consideration, China has allowed to form a bank account of it’s own before it acquires a business license to pay such costs.Money in the bank account is not treated as taxable. It is basically a down payment of WFOE registered capital.
- To Have An Information About The Minimum Amount Of Registered Capital:-It is a necessity to check the minimum amount of the investments made in WFOE. In-fact, it is a law in China. It is implemented to ensure that nobody can easily get away with the the little money in the capital. It is essentially used by the bureaucrats in China.
- Using The Proper Pen For Signing:- Most often it is very important that the important documents pertaining to WFOE are mostly signed with an ink pen. It has become a law in China.
