The Right Time to Set Up a WFOE

Last updated: Oct 2020
Regulations Guide to WFOE Establishment, Registration & Liquidation

Setting up a WFOE in China can be beneficial, but it isn’t always necessary. The following section discusses the different scenarios that may lead to a decision to set up a WFOE.

PTL Group specializes in company registration in China. We make sure that China company registration is done right, because doing so will help us focus on the real goal: long-term WFOE management. To help our clients, we provide extensive operational support for registered entities. This is where our knowledge and expertise really make a difference.

We hope you find the following information useful.

The Right Time to Set Up a WFOE

You do not need a WFOE to:

  • Employ local employees
  • Employ foreigners and obtain visas and work permits
  • Sign a contract or obtain office space
  • Manage HR: salaries, social benefits, expenses, etc.
  • Manage finance flow
  • Import products into China
  • Claim an import VAT refund
  • Store products in a warehouse or logistics center
  • Sell products and issue RMB VAT invoices (Chinese: Fapiao)
  • Set up a Chinese website
  • Register a WeChat account
  • Set up an E-commerce store

Setting up a WFOE in China: The when & why

  • Stable market & income
  • You employ several loyal employees that have proven themselves professionally
  • Your business activity requires you to present your own license
  • Your products require a complicated license
  • You want to set up an E-commerce structure that requires you to own an ICP

Regulations in China change relatively frequently. For the most up-to-date regulations, please check in with us.