Set up and run your company in mainland China

01 · ChinaMNC

Why set up in mainland China

For many foreign founders, China is not a single market but several: industrial clusters, consumer tiers, and regional business cultures that differ widely. Being present locally can help you sell to Chinese customers, work with suppliers, hire staff and manage partnerships more directly. A local entity also makes it easier to invoice customers, sign contracts and hold a bank account in renminbi.

At the same time, China rewards preparation. Rules on foreign investment, sector access, tax and employment are specific, and they are applied locally. Founders who treat registration as a bureaucratic formality often end up with a structure that does not match how they actually plan to earn money.

• Decide first whether you need a selling entity, a sourcing presence, or both.
• Check whether your sector has restrictions or requires special approval for foreign investors.
• Think about where your customers, staff and partners are located before picking a city.
• Budget for ongoing compliance, not just the initial registration.

A clear commercial plan makes every later decision — structure, address, business scope, staffing — much easier.

02 · ChinaMNC

WFOE, joint venture or representative office

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

WFOE. A WFOE is owned entirely by the foreign investor. It is the most common choice for founders who want to run a full commercial operation: hire staff, invoice customers, sign contracts and keep control of decisions. It requires a registered address, a defined business scope and ongoing accounting and tax compliance.

Joint venture. A JV pairs a foreign investor with a Chinese partner. It can be useful where local relationships, licences or sector rules favour a domestic partner, or where your Chinese partner brings distribution or manufacturing capacity. The trade-off is shared control, so governance, capital contribution and exit terms need careful drafting.

Representative office. An RO is a lightweight liaison presence. It cannot earn revenue directly; its role is limited to market research, coordination and similar non-commercial activities. It suits founders who want a foothold before committing to a full entity.

• Choose a WFOE if you want full commercial control.
• Consider a JV only with clear governance and exit terms.
• Use an RO for liaison, not for selling.

03 · ChinaMNC

The five-step registration process

Registration in mainland China generally follows a sequence. The order matters because later steps depend on earlier approvals.

Step 1: Structure and feasibility. Confirm your business model, sector access and city. Check whether your activity is on the negative list for foreign investment or needs a specific licence.

Step 2: Name and address. Reserve a company name and secure a registered address that local authorities will accept. Address requirements vary by city and district.

Step 3: Documents and filing. Prepare the articles of association, investor documents, appointment papers and application forms, then file with the local market regulation authority. Some filings are now handled online, but local practice varies.

Step 4: Business licence and follow-up. Once the business licence is issued, arrange company seals, the bank account, tax registration and any sector-specific permits.

Step 5: Operational readiness. Set up accounting, payroll, invoicing and, where needed, work permits and residence permits for foreign staff.

• Each step can reveal issues that affect the next, so plan the whole sequence.
• Local rules and processing times differ between cities and districts.

04 · ChinaMNC

Documents you will need

Document requirements vary by city, structure and sector, but most foreign founders should expect to prepare a core set. Missing or inconsistent documents are one of the most common causes of delay.

Typical items include:

• Passport copies of the foreign investor and proposed legal representative.
• Proof of the investor's legal existence, such as a certificate of incorporation, often notarised and legalised or apostilled, depending on the investor's jurisdiction.
• Articles of association, signed and consistent with the application.
• Appointment documents for directors, supervisor and legal representative.
• Lease or ownership documents for the registered address.
• Capital contribution details and investor resolutions.
• Sector-specific approvals or licences where applicable.

Translations may be required, and some documents must be notarised and legalised in the investor's home country before they are accepted in China. Names, addresses and shareholding details must match across every document. Small inconsistencies between the passport, the incorporation certificate and the application can trigger requests for correction.

Because requirements are local and change, confirm the current list with the authority or a qualified local adviser before submitting. Keep originals and clear scans of everything you file.

05 · ChinaMNC

Registered address and business scope

Two details cause more trouble than founders expect: the registered address and the business scope.

Registered address. Every company needs a registered address that local authorities accept. In practice this means a real, documented premises or an address provided through a compliant arrangement such as an incubator or serviced office. Some cities and districts have specific rules about what counts, and virtual addresses are not accepted everywhere. The address affects which authority handles your filing. If you move, you must update the registration.

Business scope. The business scope describes what your company may do. It is written in standard categories, and some activities require a licence before or after registration. A scope that is too narrow can block the work you actually do; one that is too broad can invite questions or extra requirements. Write it against your real revenue model, and plan for how it may need to evolve.

• Confirm the address will satisfy the local authority before you sign anything.
• Match business scope wording to your actual activities and any required licences.
• Keep records for any later change of address or scope.

Getting these two items right early saves months of correction later.

06 · ChinaMNC

Banking, tax and visas

Once the entity is registered, the operational work begins.

Banking. Open a corporate renminbi account with a bank that accepts foreign-invested companies. Expect due diligence on ownership, business purpose and source of funds. Prepare consistent documents and be ready to explain your business clearly. Some founders also keep an offshore account for international transactions.

Tax. Register with the tax authority, choose an accounting approach and set up invoicing. China's tax system includes corporate income tax, value-added tax and withholding rules for cross-border payments. Rates, incentives and filing obligations depend on your activities and location, so take local advice rather than relying on general assumptions. Keep proper books from day one.

Visas. Foreign staff generally need a work permit and a residence permit. The process involves the employer, the labour and immigration authorities, and typically requires educational and employment documents. Founders should plan lead time and check current requirements.

• Start bank preparation early; it often takes longer than expected.
• Engage a qualified accountant for tax registration and monthly filing.
• Handle work and residence permits before staff arrive where possible.

Treat compliance as an ongoing function, not a one-off task.

07 · ChinaMNC

Common mistakes to avoid

Most problems foreign founders face in China are avoidable with a little foresight.

• Choosing the structure before the business model. Decide how you will sell, hire and contract first, then pick a WFOE, JV or RO.
• Ignoring sector restrictions. Check the negative list and licensing rules for your activity before committing.
• Underestimating documents. Notarisation, legalisation and translations take time; inconsistent names and addresses cause rejections.
• Treating the registered address as a formality. Confirm local acceptance and keep the registration updated if you move.
• Writing a vague or narrow business scope. Match it to real activities and required licences.
• Assuming bank accounts open quickly. Prepare ownership and source-of-funds evidence in advance.
• Neglecting ongoing tax and payroll compliance. Set up accounting and invoicing properly from the start.
• Forgetting visas. Plan work and residence permits for foreign staff early.
• Relying on general advice. Rules are applied locally and change; confirm with qualified advisers.

Founders who plan the full sequence — structure, documents, address, scope, bank, tax, visas — usually avoid the most expensive surprises.