May 23, 2006

WFOE Logistics Companies

Has the Chinese Government Started Taking Applications?

I have heard conflicting points of view regarding whether or not foreign companies are currently allowed to set up wholly foreign owned logisitics companies (WFOE Logistics Company) in China. Some lawyers tell me Shanghai has begun accepting applications while others say it is still not possible for a foreign company to establish a WFOE logistics company in China, they must form a joint venture (JV).
I spoke with the Beijing MOFCOM office. According to the person I spoke with they have already approved many WFOE logistics companies this year. According to another source, Beijing is accepting applications for wholly-owned foreign enterprises in the distribution or import/export sector. Some say logistics is not a recognized industry. However, freight forwarding, distribution or import/export are recognized. It is important to carefully draft your articles of incorporation taking this into consideration.

The confusion thus seems to be caused by using the term "logistics". Currently, the government defines logisitcs as part of freight forwarding. See link below in Chinese for the 2005 announcement specifying the scope of operations allowed for foreign "freight forwarding" companies.


	MOFCOM 2005 No.19 Announcement Regarding Direct Investment in Freight Forwarding
	Foreign Companies Can Establish WFOE Freight Forwarding Agencies
	http://www.mofcom.gov.cn/aarticle/b/c/200512/20051201001331.html

Topic Tags: china logistics, china supply, foreign companies, logistics, shanghai, SMERT, supply, supply chain, WFOE, wholly owned foreign enterprise

by Dustin Mattison

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