Wholly Foreign Owned Enterprise in Shanghai

The wholly foreign owned enterprises are a kind of company formed by the foreign entities in shanghai. They are basically created as a limited liability company to encourage the manufacturing activities of shanghai whether they are in the form of export or in the form of advanced technology. They are used to manufacture the foreign product in the land of shanghai and to export it later to the foreign country. A basic advantage on this practice is the availability to claim VAT on the product produced in the main shanghai. Beside this WFOE shanghai also have the option to exercise various activities in different fields if they permitted by appropriate authorities such as providing consultancy and services, foreign invested commercial enterprise.

In shanghai, wholly foreign owned enterprise is one of the most preferable business preferences in all other modes as it provides foreign entities the power to conduct business as conducted by any local person in shanghai. Forming a wholly foreign owned enterprise has several benefits which encourage the foreign entities to form it. Some of the benefits are

•   Full Control in human resources.
•   Security of intellectual property rights.
•   Efficiency and Effectiveness in the operations of the management.
•   These enterprise  can issue invoices to customer and receive revenue in RNB (currency of china)
•  Freedom to execute strategies of the parent company without any interference of the Chinese partner.

While making a WFOE you have to consider a prescribed method as well as give attention to several factors such as business scope and registered capital, taxation and lot more.

The business scope of the wholly foreign owned enterprise is the crucial thing which one needs to supervise when having an intention to create a WFOE. As the business scope of such enterprises is wholly dependable upon the approval of the appropriate authorities.  The scope of the business is generally mentioned in the business license, so any modification in the business scope requires the approval. You have to keep a certain amount of capital for being registered as WFOE in shanghai as well as it has to be updated according to the norms of shanghai.