A wholly foreign-owned enterprise WFOEsometimes incorrectly WOFE is a common investment vehicle for mainland China -based business wherein foreign parties individuals or corporate entities can incorporate a foreign-owned limited liability company.

WFOEs may be limited-liability companies, as distinct from corporations, partnerships limited or generaland proprietorships organized by foreign nationals and capitalized with foreign funds.

WFOEs are often used to produce the foreign firm's product in mainland China for later export to a foreign country, sometimes through the use of Special Economic Zones which allow the importation of components duty-free into China, to then be added to Chinese-made components and the finished product then re-exported.

In addition, WFOEs now have the right to distribute their products in mainland China via both wholesale and retail channels. Dividends cannot be distributed and repatriated overseas if the losses of previous years have not been covered while dividends not distributed in previous years may be distributed together with those of the current year.

Repatriation of the registered capital is possible upon dissolution of the WFOE. As a WFOE is a type of limited liability company, it requires the injection of foreign funds to make-up the registered capital ; something unnecessary with a Representative Office. It is important to note that regional differences in regulations and practical differences in the application of Starbucks Holding Company legislation can also apply.

The liquidation is divided into four steps and might take up to 12 months notification of the relevant authorities, setting up a liquidation committee, submission of a liquidation report to the authorities, deregistration of the company and closing of the bank account.

From Wikipedia, the free encyclopedia. Retrieved 15 November Retrieved 6 June Dezan Shira and Associates. NH Global Partners. Wholly Owned Company Wholly Owned Company Beijing. Archived from the original on Hidden categories: Articles containing Chinese-language text.

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