Set up and run your company in mainland China

01 · ChinaMNC

Why mainland China, and what it asks of you

China is a large, deeply integrated market with a dense supplier base, a mature logistics network and a fast-moving digital consumer layer. For many founders the appeal is not only selling into the market but building close to manufacturing, sourcing and engineering talent. An onshore entity lets you sign contracts locally, invoice in renminbi, hire staff directly and hold licences that a purely cross-border structure cannot.

The trade-off is commitment. Setting up a foreign-invested company means choosing a legal representative, committing registered capital, securing a compliant address and maintaining books and filings. Operating without a proper entity — for example, invoicing through a third party — creates risk that is hard to unwind later.

• Market proximity: direct relationships with customers, suppliers and partners.
• Local hiring: employment contracts and social insurance under a domestic entity.
• Licensing: access to permits tied to a registered Chinese company.
• Repatriation: a clear path for profits and intercompany payments when documented properly.

Treat entry as a multi-year project rather than a transaction. Founders who plan hiring, tax and banking before registration tend to avoid costly restructuring later.

02 · ChinaMNC

WFOE, joint venture or representative office

The three structures foreign founders most often weigh are the wholly foreign-owned enterprise (WFOE), the joint venture (JV) and the representative office (RO). Each fits a different stage and purpose, and the right choice depends on what you intend to do onshore.

WFOE. A limited liability company owned entirely by foreign investors. It can conduct approved business activities, hire staff, invoice and hold assets. Most founders building a sales, service, trading or manufacturing operation choose this route. It requires registered capital, a legal representative and a compliant address.

JV. A company shared with a Chinese partner, typically through an equity joint venture. Useful where a local partner brings licences, land, distribution or sector access you cannot obtain alone. Governance, profit sharing and exit mechanics need careful drafting, because disputes between partners are the most common reason JVs stall.

RO. A liaison office that cannot earn revenue directly. It suits market research, supplier liaison and quality control, but it cannot sign sales contracts or invoice customers. Many founders start with an RO to explore, then convert to a WFOE once the business case is clear.

Match the entity to revenue intent, sector restrictions and your appetite for shared control.

03 · ChinaMNC

The five-step registration process

Registration in mainland China follows a broadly consistent sequence, though details and portals differ by city. Expect several weeks rather than days, and expect to iterate on documents.

• Step 1 — Name pre-approval. Submit proposed Chinese names for the company. Names follow local conventions and must not conflict with existing registrations. Prepare several options.
• Step 2 — Foreign investment information and approvals. Confirm whether your activity sits on the negative list for foreign investment. Most activities are now filing-based rather than approval-based, but restricted sectors need extra clearance.
• Step 3 — Business licence. File the articles of association, investor documents, legal representative details, address proof and capital plan with the market regulation authority. Approval issues the business licence, which is the company's legal birth certificate.
• Step 4 — Post-licence formalities. Carve the company seal, register with the tax authority, complete social insurance and housing fund registration, and open the bank accounts.
• Step 5 — Sector licences and go-live. Where your activity is regulated — food, education, logistics, finance — obtain the specific permit before trading.

Sequence matters: banking and tax steps depend on the licence, and hiring depends on the tax registration.

04 · ChinaMNC

Documents you will be asked for

Document requirements are strict on format and authentication. Missing notarisation is the single most common cause of delay, so start this early.

Typical items for a WFOE:

• Investor documents: certificate of incorporation or equivalent for a corporate shareholder, or passport for an individual. These usually need notarisation and, depending on jurisdiction, legalisation or an apostille.
• Translated copies: Chinese translations of foreign-language documents, often prepared by an accepted translation agency.
• Constitutional documents: articles of association, drafted or adapted for the Chinese entity.
• Legal representative: passport copy, contact details and appointment resolution. This person carries statutory duties, so choose deliberately.
• Address evidence: lease agreement and property ownership certificate for the registered office.
• Capital and business plan: registered capital amount, contribution schedule and a description of intended activities.
• Bank reference: some banks and localities request proof of the investor's standing.

Keep originals consistent across every document. Name spellings, addresses and dates that disagree between filings cause rework.

05 · ChinaMNC

Registered address, business scope and capital

Three technical choices drive how smoothly the company operates afterwards.

Registered address. The company must have a lawful address, which may be a leased office or, in many cities, a serviced or virtual arrangement approved for registration. The address determines the tax bureau and sometimes the available incentives. Landlord cooperation matters: you will need the lease and ownership documents, and some landlords refuse registration. Verify before signing.

Business scope. This is the formal list of permitted activities recorded on the licence. Write it to cover what you actually plan to do, plus reasonable adjacent activities, because adding items later means a change filing. Certain items trigger pre-approval or additional licences. Overly broad scopes can invite scrutiny; overly narrow ones block invoicing for legitimate work.

Registered capital. Subscribed capital is a public commitment. Under current rules, contribution timing is set in the articles and must be realistic. Capital should reflect the cost of hiring, deposits and early losses, not an aspirational figure. Some sectors and licences impose minimums.

Decide these with your accountant and lawyer together, not sequentially.

06 · ChinaMNC

Banking, tax and visas after incorporation

The licence is the beginning, not the end. Operating requires money movement, tax compliance and the right to be in the country.

Banking. Open a basic RMB account and, if needed, a foreign currency capital account for inbound investment. Bank onboarding is thorough: expect questions on ownership, expected flows and counterparties. Bring authenticated corporate documents and be ready to explain your business. Online banking and payment integrations are usually arranged after account opening.

Tax. Register with the tax authority, confirm your taxpayer status and set up invoicing. China uses VAT-style invoicing (fapiao), so your billing process must produce compliant invoices. Monthly or quarterly filings, annual corporate income tax settlement and statutory bookkeeping are ongoing obligations. Many founders engage a local accounting firm from day one.

Visas and permits. Foreign staff need work permits and residence permits, typically sponsored by the registered company. Founders often need a legal representative or senior management route. Obtain the work permit before the residence permit, and keep the company's registration consistent with immigration filings.

Plan banking and tax before your first hire, not after.

07 · ChinaMNC

Common mistakes foreign founders make

Most problems at this stage are avoidable and stem from sequencing, not from the rules themselves.

• Choosing the entity before the business model. An RO cannot invoice; a JV without a shareholders' agreement invites deadlock. Decide revenue and control first.
• Underestimating document authentication. Notarisation and legalisation take time. Starting late delays everything downstream.
• Under-capitalising. Registered capital that cannot cover deposits, salaries and early losses forces awkward changes later.
• Signing a lease that cannot be registered. Confirm the landlord will support company registration before paying a deposit.
• Narrow business scope. Founders discover they cannot invoice for a service they actually sell.
• Treating the legal representative as a formality. The role carries statutory responsibility; appoint someone who understands it.
• Ignoring bookkeeping. Zero-revenue companies still file. Missed filings create penalties and banking friction.
• Assuming a single city template fits all. Portals, incentives and timelines differ locally. Get local advice.

None of these are fatal. Each is cheaper to fix before registration than after.