WFOE is the Wholly Foreign-owned Enterprises. They are companies wholly owned by foreign investors. In China, the first purpose of setting up WFOE was to encourage production activities. Another is to export or introduce new technologies. So, we relaxed the restrictions. In addition, China WFOE formation also appear in various industries.
China has improve our commitments since we joined the WTO. And reduced the average tariff to 7.5%. It’s much lower than other emerging economies and developing countries. China’s business environment has risen from 78th to 31st place in the past two years.
So, China has greatly reduced market access conditions, and opened up manufacturing. It accelerates the opening up of the service industry.
Meanwhile, China will carry out the new foreign investment laws. It is because China is a more regulated and favourable investment environment.
So, under the new situation, how do we set up a WFOE, and what are the requirements?