If you are reading this article, it seems that you are intending to set up a new business in the great country of China. This is a market that cannot be ignored, because it is the second biggest economy in the world after America. Companies have gone on to be massive enterprises after setting up in China, and Apple is one such example. Every foreign entity setting up in this country needs to have a proper business license, but your need to set up a WFOE makes perfect business sense.
If you are currently setting up a wholly foreign-owned enterprise (WFOE) in China, you may not be completely aware of all that it entails. It is a very smart business strategy to do so, and it will help your business to grow in this country. If you would like to find out more, the following are some of the benefits that can be enjoyed by taking the route of WFOE.
- You’re always in control – There are many countries, especially in the Asia region, that insist that if you want to set up a business in their country, you must share joint control with one of their citizens. This is a stumbling block almost immediately, and many businesses decide not to set up in these particular countries. This is why taking advantage of WFOE allows you to have full operational control of your business. It is your idea after all, so it makes sense that you get to enjoy the spoils.
- You can immediately hire staff – No business can operate properly without the correct staff members, and once again, WFOE allows you to do that almost immediately. It would be completely legal for you to employ staff, and you can have contracts drawn up that will be in full compliance with all of the Chinese labour laws. You will also be able to receive tax invoices to make accounting somewhat easier and to provide you with a steady flow of cash.
- It is going to save you money – These are the words that every business owner wants to hear when setting up in a new country. You do not want to be restricted at all, and you certainly don’t want there to be any costs that are hidden. Going through the WFOE process does involve more details, but it will end up saving you money.
- It provides you with flexibility – You can expand further into other business activities, if you wish. Depending on the type of business license that you get, your WFOE can permit you to do business in areas such as manufacturing, retail and even consulting services. This will allow your business to expand when needed.
As in your home country, you always want to be able to take advantage of tax breaks and other government incentives. By going through the WFOE procedure, you get to enjoy things like reduced income tax, exemptions from VAT, and others.