The foreign investor may be a foreign company, enterprise, economic organisation, or a natural person.

1. For a company/enterprise, the Certificate of Incorporation of the Investor and Bank Reference Letter are required.
2. For a natural person, the Identity Certificate and Bank Reference Letter are required.

• The Certificate of Incorporation/Identity Certificate has to be certified by a Notary Public and the Chinese Embassy in the investor’s country.
• The Bank Reference Letter is issued by the bank in which the foreign investor has a working or trading account and has to be signed by an authorised bank officer.

A minimum capital contribution known as registered capital is required and it varies according to the nature of business. The registered capital should be able to support the expected scale of the WFOE’s business. The amount of the initial capital contribution cannot be less than 15% of the registered capital or the statutory minimum amount of registered capital.

The investor is allowed to contribute registered capital in cash, in kind, or in the form of technology/intellectual property rights, or other non-monetary properties that may be assessed on the basis of currency. The amount of the capital contribution in cash has to be no less than 30% of the registered capital.

Prior to any of the following applications, the investor should reserve a name for its prospective restaurant with the Shanghai Administration of Industry and Commerce (SAIC). The SAIC requires a proposed name and three alternatives.

The Chinese name should be in the following format:

• First part - company name;
• Second part - activity;
• Third part - location/name of town;
• Fourth part - company structure.

Use of the words “China”, “Sino” and “International” are not permitted in the Chinese name unless permission is given, although they are permitted in the non-Chinese name.

After applying and obtaining a name for the WFOE, the next step is to apply for the Approval Letter and Approval Certificate. At this point, the Articles of Association, Feasibility Study Report, Lease Agreement, etc. should be submitted to the Shanghai Foreign Economic Relation and Trade Commission. Approval and issuance of certificates are from 10 to 15 working days.

Within 30 days after obtaining the Approval Certificate, the foreign investor will need to register and apply for a Business Licence for the restaurant from the local SAIC. The foreign investor is also required to submit similar documentation to the Shanghai Foreign Economic Relation and Trade Commission for approval and filing.

Once the Business Licence is issued, the restaurant is deemed to be a legally established entity in the PRC with a Legal Representative and existing under PRC laws. It will have full operational rights to operate a business in China within the scope of its Business Licence.

The WFOE restaurant needs to apply to the Shanghai Municipal Health Bureau for a "Health and Food Hygiene Licence" if it is retailing food and all other food-related products. This application has to be done before the start of operation. Besides routine documentation, further information about ventilation equipment and sanitary fixtures are also required. The local Health Bureau will carry out on-site inspections, and give its authorisation within 20 working days.

According to the “Measures for Administration of Alcohol Circulation”, companies engaged in the alcohol retail trade need to register for a permit to sell wine and liquor from the Wine Monopoly Administration Bureau. The authority will process the application within 7 working days upon receipt of following materials: Registration Form, copy of Business Licence, etc.

WFOEs engaged in manufacturing, including restaurants, are required to obtain an Environment Evaluation Report from a qualified environment agency. The report will be issued after the verification of the restaurant environment including fire protection, liquid waste disposal, noise pollution and the effect to the adjacent denizen.

This is purely a procedural step. The Organisation Code Bureau will issue certificates within 1-3 working days after application.

Once the Organisation Code Registration Certificate is approved, the WFOE may then proceed with applications to the local tax authority. At the same time, the WFOE should also apply for the company seal and legal representative seal from the Shanghai Municipal Police Bureau with the assistance of the authorised Seal Carving Agent.

Together with the Approval Certificate, Business Licence and other documents, the formal application form affixed with the seals should be submitted to the authority.

Starting from the second month after obtaining the Tax Registration Certificate, the restaurant is required to apply for quarterly tax filing and annual inspection.

• Statistics Registration Certificate issued by the Statistics Bureau;
• Foreign Exchange Registration Certificate issued by the Foreign Exchange Supervision Bureau;
• Finance Registration Certificate issued by the Finance Bureau;
• Customs Registration Certificate issued by the Customs Bureau