Wholly Foreign-Owned Enterprise

[1] The unique feature of a WFOE is that involvement of a mainland Chinese investor is not required, unlike most other investment vehicles (most notably, a Sino-foreign joint venture).

Starting January 2020, per new Foreign Investment Law, WFOE has been abolished and superseded by a new type of business referred to as "foreign-funded enterprise" (外商投资企业).

Such advantages include: A key feature of a WFOE is that it allows for any profits made in running the business to be repatriated without prior approval of the State Administration of Foreign Exchange (SAFE).

[6][7] The disadvantages of establishing a WFOE include the inability to engage in certain restricted business activities, limited access to government support and a potentially steep learning curve upon entering the mainland Chinese market.

As a WFOE is a type of limited liability company, it requires the injection of foreign funds to make-up the registered capital; something unnecessary with a Representative Office.