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What is a WFOE and how to open it

A WFOE is a Wholly Foreign-Owned Enterprise, meaning a Limited Liability Company (LLC) whose owners are foreigners.
Considering that many foreigners have also the option to open a joint venture with a Chinese, the WFOE is not always the best option, but surely it is an interesting one, especially for already established businesses which do not want to risk by having a partnership with somebody outside the company.

The registered capital for the WFOE can be set entirely at discretion of the business owner, with no apparent advantages for going above the minimum. Usually the minimum is pretty low, but remember: your registered capital is the perfect representation of your interest into the Chinese market and your effort invested in this company. It will be almost impossible for you to quietly talk business with many companies if your registered capital is just 10.000 RMB. Chinese people are usually using this information (besides several others) to judge whether a company is worth contacting or not. There are so many businesses in China that this is generally a good filtering method and it is indeed used by a lot of people.
Furthermore, the capital can be usually deposited up to 20 years after the foundation, so it will not be an major concern in the majority of the cases.
A WFOE can also be owned by a Holding.

For ownership or legal responsibility transfer, they can be done only if the current owner is in China, so make sure you know this when opening your company.

Every company in China will require to state their operational field (or fields) depending on the business it is going to have to do. An example is the manufacturing of electronic products, selling spare parts for automotive market or doing general import/export trade.
Many rules are locally managed so in different cities you might find out things do not work in the same way. This is perfectly normal and it reflects the Chinese local government system.
Our advise is to settle down in big cities only if it is really useful: for example, if company image will benefit a lot, or the location is close to the major suppliers, or because of the relatively cost-effective situation for import/export business, and so on. Depending on your business scope, it might be better to go to another area according to the local regulations: for example, several local governments of China are subsiding innovative businesses, which means you should not look only into the technological centers of Shenzhen, Beijing (and Hebei), Shanghai, and so on.

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