WFOE SERIES – SECTION 1.2 – WFOE PROS AND CONS

Advantages： 

• Do not need a Chinese partner: giving WOFEs greater control.   
• Can issue, and receive, Fapiaos: A Fapiao is a legal slip that validates financial transactions in China. Being able to issue and receive these makes it much easier for you and your supplier/client to claim back VAT.  
• Can issue work permits: making it easier for owners and employees to carry out work in China 
• Have legitimacy in China: Clients and suppliers will have greater confidence to do business with you.  
• Gain entrance to the Chinese Market 
• Have protection under Chinese law: with regard to intellectual knowledge and technological assets. 
• Have  sole control over human resources, as long as they comply with Chinese law. 
• Can buy real estate in China 

Limitations：  

• High Establishment Difficulty. The application process is very involved, and each step may have a profound impact on the future development of the company. The whole process usually takes 3 to 6 months. Patience and perseverance is needed to avoid mistakes, and ensure the WFOE has a clear idea of its planned business scope. 
• Investors must provide foreign funding for the company’s registered capital, something that isn’t required for a Representative Office. 
• Chinese legislation is constantly evolving. This can make it quite difficult for those that are new to China. 
• There are regional differences in regulations within China.