Corporate income tax:
- Foreign investors have 100% control over the company (share capital).
25% (lower rates may apply depending on the company)Value added tax:
3% - 13% of sales revenue (export is not taxed)Consumer tax:
1% – 45% of the profit from sales (export is not taxed)Stamp duty:
0.005% – 0.1%
- Since the WFOE is not required to be in partnership with a local enterprise, it provides investors with control/independence related to personnel issues and the management of the organization.
- WFOE is allowed to carry out direct commercial activities, including trade, service and production, provided that the specified business is within the approved scope of activity.
- WFOE can hire both foreigners and local Chinese directly, without any restrictions on the number of foreigners working (in most cities), and apply for work visas for foreign specialists.
- All profits earned in China can be transferred to WFOE in the form of dividends directly to the company's investors.