Wholly Foreign-Owned Enterprise
A wholly foreign-owned enterprise (WFOE, sometimes incorrectly WOFE) is a common investment vehicle for mainland China-based business wherein foreign parties (individuals or corporate entities) can incorporate a foreign-owned limited liability company. 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 Starting January 2020, per new Foreign Investment Law, WFOE has been abolished and superseded by a new type of business referred to as "foreign-funded enterprise" (外商投资企业). Existing businesses are expected to transition to the new designation within five years.