Advantage and function
When first established, the WGQ was positioned as a special zone for investors to carry out international trade and entrepot trade. Therefore, the majority of companies in WGQ nowadays are trading companies.
A free trade zone in
free trade zones in
Companies in WGQ are able to import goods from overseas to Chinese domestic market and export goods from Chinese domestic market to foreign countries through a import and export company (also known as 'state trading company') or a general bonded commodity exchange market (E/M) in WGQ.
WGQ companies can also engage in domestic trade; i.e. buying goods of PRC
origin and selling them back to the PRC domestic
market. No import and export company is required and no customs procedures are involved for this type of trade.
However, VAT invoices should be issued through
an E/M. According to the WGQ customs, the sale of goods to a WGQ company for ultimate sales to other PRC buyers will not
be deemed export and the PRC company will
not be entitled to export tax refund. It implies that foreign investment enterprises cannot treat the sale of goods to WGQ as
a means of fulfilling their export commitment
if such goods will eventually be sold within
1. Import goods from overseas to
2. Engage in domestic trade directly, though it is not advocated for WOFE with nature of trading to engage entirely in domestic trade since it can be deemed as a clear departure from the government policies.
It is not advisable for a WGQ company to engage entirely in domestic trade since it could be viewed as a clear and complete departure from the central government policies. Import can be
done so long as the PRC buyer has import right or the transaction is done through an E/M. For certain restricted goods, normal import license and quota requirements are still applicable to
The only registered place is WaiGaoQiao Free Trade Zone (hereinafter as WGQ FTZ), the price reference of an office of a minimum of 50sqm in WGQ FTZ is about RMB 28,000 per year. This office can be used as service center or sales office.
The minimum authorized capital for a Wholly Foreign-Owned Enterprise with nature of trading is US$ 200, 000.
The installment of investment contribution:
Although investor may make the investment contribution by installments and the final installment can be made within 1 year, the entire functions of Trading WOFE shall not be actualized until the total amount be made.
Besides, to prevent the certificate of approval from becoming invalid automatically, the first installment shall be made with no less than 15% of the total amount within 90 days from the day when the business license is issued, the second installments shall be made strictly within 3 months afterwards.
Note: Project Proposal and Feasibility Study Report can be skipped.
The registration of a wholly foreign owned enterprise will normally take 50 working days to obtain business license from BAIC. A company is formally incorporated when business license is obtained. In order for it to be fully operational, post-registration process must be completed and it will take around 30 working days to complete.