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1. Status
Such a company is registered with foreign capital in China and under Chinese law. Board of directors and legal representatives are appointed by the foreign mother company. The WFOE abides by the Chinese company law and regulations like any other Chinese company.
It is generally treated the same, with some differences, sometimes favourable sometimes not. In general the differences are reducing and I would not consider that WFOE are at a disadvantage against Chinese companies from a legal and regulatory point of view.
2. Legal liability
The WFOE is liable to its assets like a limited liability company in Western legal practice. The minimum capital to be registered is usually around USD 200'000.-.
3. Commercial Activity
Chinese corporate law restricts companies to their business scope, i.e. the range of business activities it can perform. A WFOE is also restricted in such a way. The business scope of a WFOE is usually restricted to a manufacturing or processing activity. Certain special economic zones allow WFOEs to have a purely distribution activity for products of the mother company's group. Pure trading as a business scope (i.e. just buying and selling as a third party between 2 partners) is normally not allowed for a WFOE.
Within its business scope, the WFOE can have normal commercial activities of buying materials, transforming them and reselling its products, locally or abroad. If it approved to do so, it can just buy, store and distribute and act as its mother company's Chinese agent.
The WFOE can declare customs, import and export according to its business scope.
Local currency can be exchanged against hard ones provided it is for legal buying activities in respect with the business scope.
Profits can be repatriated, in foreign currency.
4. Personnel
Local staff is hired directly under the Chinese labor law. All its dispositions must be respected. They do not make it difficult to hire and fire people. Trade unions are encouraged but not obligatory. In any case, they have proved to be no hindrance to the management.
Foreign managers can be apointed and receive work and residence permits as well as the apropriate visas.
5. Premises
They can be any premise in China. Restrictions occur in case a WFOE applies for a business scope only available in a special zone. Premises must then be bought or rented in that zone. Foreigners are still restricted to live in approved housing.
6. Taxes
WFOE pay income tax as Chinese companies (usually 33% of the net profit).
Tax breaks can be obtained for encouraged industries or export-oriented industries.
In addition WFOE normally obtain the right to import all of their production equipment free of VAT and customs tax.
Personal income tax of the WFOE must be paid by the employer.
7. Requirements for Registration
The WFOE must be approved to be registered. This approval will include checking:
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WFOE 
