What is the Advantages of WFOE in China?

[Barker Hicks]

Hello Guys,

I have little view on WOFE in China. The Wholly Foreign Owned Enterprise (WFOE or WOFE) is a Limited liability company wholly owned by the foreign investors. In China, WFOEs were originally conceived for encouraged manufacturing activities that were either export orientated or introduced advanced technology. However, after China's entried into the WTO, these conditions were gradually abolished and the WFOE is increasingly being used for service providers such as a variety of consulting and management services, software development and trading as well. With that, any enterprise in China which is 100% owned by a foreign company or companies can be called as WFOE. I want to know regarding the advantages of WFOE in China. Any idea on it, kindly share with me.

Thanks a lot!
Barker Hicks

[Dave A]

I'm out of date with the current issues on this. My last exposure was in 2005, and in those days the bone of contention was that China was interested in acquiring access to "foreign" technology to use both internally and to compete against the technology owner in the international market, but was denying access to foreigners to market and sell into the China market themselves. Where was the "win" for the foreign company in that deal?

Sounds like WFOE breaks the impasse - but how it's working out for all the parties in practice I've got no idea.