WFOE Setup in Mainland China: A Strategic Move for Growth

ASC Consuluting
May 20
3 min read

Updated: Jun 24

Client Profile

An Australian entrepreneur is expanding operations from Hong Kong into Mainland China. This move aims to strengthen supply chain control and enable local business operations.

Overview of the Full Expansion Strategy

This project is the second step in a broader international growth roadmap. The client's journey includes:

Company formation in Hong Kong
WFOE creation in Mainland China
VAT registration in France
Integrated accounting across jurisdictions
Opening a corporate bank account in China
Implementation of Monday.com as a digital backbone
Sourcing optimization and supply chain management

Each case study shows how ASC Consulting ensured a seamless setup, operational visibility, and fiscal compliance at every stage.

Context & Objectives

The client required:

A fully licensed Chinese company for import/export activities
RMB invoicing and official Chinese tax invoices (fapiaos)
Local team hiring and salary payments
A compliant structure that allows for independent management from the Hong Kong HQ

Our Intervention – ASC Consulting for WFOE Setup in Mainland China

Entity Type

We advised on establishing a Trading WFOE structure (Wholly Foreign-Owned Enterprise), which is suitable for the client's business model.

Company Setup

Our team managed the full process. This began with name approval and continued through to business license issuance. We secured approvals from MOFCOM and SAIC, ensuring everything met local regulations.

Bank Accounts

We coordinated the opening of a local RMB account and a foreign currency capital account (in USD and HKD). This step is crucial for the client's financial transactions.

Customs & Tax Compliance

We registered the WFOE with Chinese customs and obtained General VAT taxpayer status. This enabled fapiao issuance, which is vital for tax compliance.

Trademark Protection

Protecting the brand locally was a priority. We guided the client through the process of filing for a trademark with CNIPA, ensuring their brand remains secure.

Employment Setup

Creating a local workforce was essential. We drafted labor contracts in both Chinese and English. Additionally, we registered social contributions and launched a compliant payroll system.

Digital Tools

To enhance operational efficiency, we synced the WFOE’s workflows with Monday.com for human resources, sourcing, and finance processes. This platform provides a digital backbone for the client's operations.

Results

The WFOE was fully registered and operational in just under three months. This was impressive, considering regional lockdowns and administrative slowdowns.

The bank account opening was completed remotely through our local partner. Capital injection and initial transactions were processed within two weeks.
The client onboarded their first Chinese employee six weeks after license approval. This included all necessary social security and tax registrations.
Fapiaos (official VAT invoices) were successfully issued from the first month of operation. This capability allows for both domestic and export transactions.
The brand was officially registered with CNIPA, providing essential protection in a core market.
All back-office processes were streamlined using Monday.com. This integration linked to the Hong Kong HQ’s tools (Xero + shared drives), ensuring real-time monitoring.

The WFOE now acts as the client’s anchor in China, supporting long-term procurement, hiring, and distribution.

Suggested Next Steps

Cross-Border Agreements

Activate cross-border agreements for service billing between China and Hong Kong. This will facilitate smoother financial operations.

VAT Refund Strategies

Implement VAT refund strategies for export sales. This can significantly enhance profitability.

Onboarding Management

Consider onboarding a Chinese operations manager. This individual can expand local sourcing capacity and improve overall efficiency.

The client’s successful WFOE setup in Mainland China illustrates the effective collaboration with ASC Consulting. This partnership empowers business growth and compliance in the complex Chinese market.