Establishing a WFOE
We intend to set up a WFOE in Shanghai by using a BVI-registerd company as an investor. We thought of proceeding the notarization of the certificate of incorporation documents of investor in Singapore and endorsement by China embassy in Singapore.
However,we have been advised that we have to do the notarization of certifiate of incoporation documents of investor in BVI and endorsement by China embassy in London as required by the China government. Which is the correct procedure?
Kindly advise. Thank u.
Regards,
Dave
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June 27th, 2008 at 8:24 pm
If the parent company of your intended China WOFE is a BVI corporation, you would normally complete the notarization of your certificate of incorporation in BVI; the Chinese Embassy in London most likely is the proper embassy to endorse your notarization as BVI is a British Overseas Territory. If Singapore is more convenient for you, you can organize a Singapore company immediately, as the initial parent of the WOFE, and add the BVI parent relationship some time later.
July 1st, 2008 at 12:47 pm
Indeed, it is the investor’s certificate of incorporation that needs to be notarized / legalized, and so if you are channeling your investment through a BVI company, then you need to have the endorsement done in London.
Do note that from a PRC law perspective, I would advise against adding the BVI parent relationship some time later like James suggests. Changing investors in China can be a complicated process, better to put your preferred structure in place immediately - even if it takes another step.
By the way, from your question it is not clear who is helping you, but I would strongly suggest that you seek professional advise when establishing your China WFOE. You want to be avoiding future problems.
July 1st, 2008 at 3:46 pm
I am currently in the processes of incorporating a WFOE in China with a holding company i Hong Kong. This gives several tax-benefits and allows flexibility if you later want to transfer the ownership of your WFOE. The Hong Kong holding company is owned by a BVI entity.