Start and run your company in mainland China

01 · ChinaMNC

Why China, and why now

China remains one of the largest consumer and manufacturing markets in the world, and many foreign founders are drawn by supply chain depth, a large domestic customer base and the ability to run design, sourcing and sales from one place. The market is also competitive and locally specific, so the decision to enter should be tied to a real commercial plan rather than to general optimism.

Before you register anything, be clear about what the China entity is for. Common reasons include selling to Chinese customers, sourcing and quality control, employing local staff, holding licences for regulated activity, or servicing regional clients. Each reason points to a different entity type and a different cost base.

• Market access: a local entity can contract, invoice and hire in China.
• Supply chain: proximity to suppliers and faster problem-solving.
• Customers: many buyers prefer a local contracting party.
• Talent: a legal employer of record for local staff.

Set expectations early. Registration is a process with defined steps, but timelines depend on the city, the industry and how complete your documents are. Treat any promised date with caution and plan for buffer.

02 · ChinaMNC

WFOE, joint venture or representative office

The three structures most foreign founders consider are the wholly foreign-owned enterprise (WFOE), the joint venture (JV) and the representative office (RO). Each has a different purpose and a different compliance burden.

A WFOE is a limited liability company owned entirely by foreign investors. It can generally conduct approved business activities, sign contracts, invoice customers and employ staff. It is the most common choice for founders who want control and a full operating presence. The trade-off is that it requires capital, a registered address, accounting and ongoing reporting.

A JV involves one or more Chinese partners. It can make sense where local licences, land, distribution or government relationships are essential, or where the industry restricts foreign ownership. Control, governance and exit terms need careful drafting, and partner alignment matters as much as the paperwork.

An RO is a liaison office. It cannot generally earn revenue or sign business contracts on behalf of the parent; it is used for market research, coordination and representation. It is lighter to run but limited in what it can do.

• Choose a WFOE if you need to trade, invoice and hire under your own control.
• Consider a JV where local partnership unlocks access you cannot get alone.
• Use an RO only for non-revenue liaison activity.

Confirm the latest foreign investment rules for your specific sector before deciding.

03 · ChinaMNC

The five-step registration process

While details differ by city, most foreign-invested company registrations follow a recognisable sequence. Think of it as five stages, each with its own inputs and outputs.

Step 1: Prepare and decide. Define the business scope, choose the entity type, identify the legal representative and supervisors, and confirm the registered address. Decide on registered capital and contribution schedule. This stage sets the foundation for everything that follows.

Step 2: Name and approval. Submit proposed company names for checking and file the foreign-investment information report where required. Names can be rejected for similarity or for containing restricted terms, so prepare alternatives.

Step 3: Business licence. File the establishment documents with the local market regulation authority. Once approved, you receive the business licence, which is the entity's core identity document.

Step 4: Post-licence registrations. Arrange company seals, open the bank account, complete tax registration, and set up social insurance and housing fund accounts if you will employ staff.

Step 5: Start operating. Put bookkeeping, invoicing, annual reporting and licence-specific filings in place before your first transaction.

• Keep one master document list and track each item's status.
• Use certified translations where foreign-language documents are required.
• Confirm local variations with the authority or a local adviser.

Do not treat the licence as the finish line; the operational setup is what makes the company usable.

04 · ChinaMNC

Documents you will typically need

Document requirements vary by city, industry and entity type, but foreign founders should expect to assemble a fairly consistent core set. Preparing these early avoids repeated back-and-forth with the authorities.

• Investor documents: certificate of incorporation or registration for corporate shareholders, or passport for individual investors.
• Notarisation and legalisation: foreign documents often need notarisation and consular legalisation or an apostille, depending on the source country and current rules.
• Translated copies: Chinese translations, often by an accepted translation provider.
• Constitutional documents: articles of association, and joint venture contracts where applicable.
• Appointment documents: details and acceptance letters for the legal representative, directors, supervisors and general manager.
• Address evidence: lease or ownership documents for the registered office.
• Name and scope: proposed company names and a drafted business scope.
• Bank and tax forms: account opening and tax registration paperwork, usually completed after the licence.

Keep originals, scans and translations organised in one place. Where a document is close to expiry, renew it before filing. Ask the local authority or your adviser to confirm the exact list for your case, because a missing notarisation can stall the whole file.

05 · ChinaMNC

Registered address, business scope and capital

Three details cause more delay than almost anything else: the address, the scope and the capital.

The registered address must be a real, usable premises accepted by the local authority. It is not merely a mailing address. Some cities allow serviced or incubator addresses for certain activities; others require a lease for commercial space. Check zoning, landlord cooperation and whether the address can host your specific business before you sign anything long-term.

The business scope defines what the company may do. It is written in standard Chinese categories, and some activities require a separate permit before or after registration. Draft it to match your actual plan, but avoid padding it with activities you will not perform, since each may bring extra filing or licensing obligations.

Registered capital is the amount shareholders commit to contribute. It signals seriousness and affects liability, but it is not a marketing number. Under the current company law framework, contribution schedules matter, and an unrealistic figure can create pressure later. Choose an amount you can fund on the agreed timetable, and confirm the current rules with a local adviser.

• Verify the address can support your activity and licence needs.
• Match the scope to real operations, not ambition.
• Set capital you can actually contribute.

06 · ChinaMNC

Banking, tax and visas after registration

Once the business licence is issued, the operational work begins. The company needs a bank account, a tax profile, bookkeeping routines and, if foreign staff will work in China, the right visa and work permit arrangements.

Banking. Opening a corporate account usually requires the licence, seals, identification documents and sometimes the legal representative in person. Banks apply their own due diligence, so expect questions about ownership, business activity and expected flows. Keep your documents consistent with what you filed.

Tax. Complete tax registration and confirm your invoicing setup. China has several tax categories and filing obligations, and the treatment of your activity depends on what you actually do. Engage a local accountant early so monthly and annual filings are not missed. Late or incomplete filing can create penalties and disrupt banking.

Visas and work permits. Foreign employees generally need a work permit and a residence permit tied to employment. Founders should confirm the correct route for their role and city, and allow time for the process. Business visas are not a substitute for working legally.

• Line up banking due diligence before you need to receive money.
• Agree a bookkeeping and filing calendar with your accountant.
• Sort work authorisation before staff relocate.

Compliance is ongoing: annual reports, tax filings and licence renewals all need an owner.

07 · ChinaMNC

Common mistakes to avoid

Most problems foreign founders encounter in China are avoidable with a little discipline. These are the patterns worth watching.

• Choosing the entity by habit. A WFOE is not automatically right. Match the structure to revenue model, licensing and control needs.
• Underestimating documents. Notarisation, legalisation and translation take time. A missing item can reset the clock.
• Treating the address as a formality. An address that cannot support your activity or a licence will cause problems later.
• Overstating capital. Commit only what you can contribute on schedule.
• Ignoring the business scope. Too narrow blocks activity; too broad adds obligations.
• Delaying tax setup. Filing obligations begin early, and gaps are costly to fix.
• Assuming a visa is a work permit. Employment must be properly authorised.
• Running without local advice. Rules differ by city and change over time; verify rather than assume.

Build a simple checklist, assign an owner for each item, and keep your filings consistent across registration, banking and tax. Founders who plan the operational phase alongside the registration phase tend to have a smoother first year.