Set up and run your company in mainland China

01 · ChinaMNC

Why China, and why now

Foreign founders look at mainland China for a few consistent reasons: the depth of the consumer and industrial market, mature manufacturing and supplier networks, and a large pool of engineering and operations talent. For many companies, China is less a single market than a base for sourcing, regional operations, or serving customers who expect a local presence.

At the same time, entry is a commitment. Setting up an entity, opening a bank account, securing premises, and hiring all take planning. Founders who do well tend to start with a narrow, testable business idea rather than a broad national push, and they budget time for compliance as well as sales.

• Market access: confirm whether your sector is open to foreign investment and on what terms.
• Supply chain: proximity to suppliers can shorten product cycles.
• Talent: local hiring is often easier with a registered entity in place.
• Commitment: expect real setup and ongoing compliance work.

Ask yourself what specific customer or supplier problem China solves for you, and what you would need to prove that within the first year.

02 · ChinaMNC

WFOE, joint venture, or representative office

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

• WFOE: a limited liability company owned entirely by foreign investors. It can conduct the business activities listed in its scope, invoice customers, hire staff, and remit profits, subject to tax and foreign exchange rules. It is the default choice for most founders who want to trade or deliver services.
• JV: a company shared with a Chinese or foreign partner. Useful where local partners bring licences, land, distribution, or sector access, but it requires careful shareholder agreements, governance, and exit terms.
• RO: a liaison office that cannot earn revenue directly. It suits market research and coordination, not sales.

Choice depends on your activity, sector restrictions, and appetite for shared control. Where a sector limits foreign ownership, a JV or a different structure may be required. Confirm the current rules for your exact business with a local adviser before choosing.

03 · ChinaMNC

The five-step process

Registration paths differ by city and sector, but most setups follow a similar sequence.

• Step 1 — Structure and feasibility: define the business activity, check foreign investment rules, choose the city, and decide on entity type, capital, and shareholders.
• Step 2 — Name and registration: reserve a company name and file incorporation documents with the local market regulation authority, including articles of association and investor documents.
• Step 3 — Post-registration filings: complete tax registration, and arrange company seals and any sector-specific licences.
• Step 4 — Banking and capital: open the corporate bank account and handle foreign exchange registration so capital can be contributed and profits later remitted.
• Step 5 — Operations: secure premises, register the address, hire staff, set up payroll and invoicing, and arrange work permits for foreign employees.

Timelines vary widely with city, sector, document readiness, and bank onboarding. Build a buffer and expect questions rather than assume a fixed schedule.

04 · ChinaMNC

Documents you will likely need

Document requirements vary by city, authority, and entity type, but founders should prepare a core set early. Missing or improperly legalised papers are one of the most common causes of delay.

• Passport copies for foreign shareholders, directors, and legal representatives.
• Incorporation documents for corporate shareholders, such as certificate of incorporation and constitutional documents.
• Notarisation and, where required, legalisation or consular authentication of foreign documents, plus Chinese translations.
• Proof of registered address, such as a lease or property documents.
• Articles of association, shareholder resolutions, and appointment documents.
• Bank reference or proof of funds where requested during account opening.

Some documents must be signed before a notary or witnessed, and translations may need to be done by an accepted provider. Keep originals and clear scans, and check the specific checklist for your city and business scope. Requirements can change, so confirm the current list with your adviser and the relevant authority before submitting.

05 · ChinaMNC

Registered address and business scope

Two details cause more friction than almost any other: where the company is registered and what it is allowed to do.

Registered address. The company needs a registered address, typically commercial premises that meet local requirements. Some cities allow serviced offices or incubator addresses; others are stricter about the property's use. The address appears on the licence and matters for tax jurisdiction and inspections, so verify that the landlord can provide the documents the authority expects.

Business scope. This is the list of permitted activities on your licence. Write it to match what you actually plan to do, in the wording local authorities accept. Activities outside the scope can create compliance problems, and some activities need pre-approval or additional licences. Where your plans may expand, consider whether the scope can accommodate later additions without a formal change, and ask how amendments are handled.

Both choices affect banking, invoicing, and tax, so decide them alongside your adviser rather than after registration.

06 · ChinaMNC

Banking, tax, and visas

Once registered, the operating basics come next.

Banking. Corporate account opening involves due diligence on shareholders and business activity, and can take time. Bring complete documents, be ready to explain your business model, and expect questions about expected transactions. Foreign exchange registration is needed to move capital in and profits out under the applicable rules.

Tax. Register with the tax authority, understand your invoicing obligations, and confirm which taxes apply to your activity, such as corporate income tax, value-added tax, and withholding on payments abroad. Many companies use a local bookkeeping firm; the important thing is that filings are accurate and on time.

Visas. Foreign employees generally need a work permit and a residence permit, and the process involves the employer. Founders sometimes use a different visa while setting up, but working without the right permit is a risk. Plan the sequence so permits are in place before staff begin work.

07 · ChinaMNC

Common mistakes to avoid

Most problems are avoidable with a little foresight.

• Choosing the wrong entity: an RO cannot invoice customers, and a JV without clear governance terms can stall decisions.
• Vague business scope: a scope that does not match real activity can block invoicing or trigger questions later.
• Underestimating documents: notarisation, legalisation, and translation take time; start early.
• Ignoring the address: a registered address that fails local requirements can hold up licensing and banking.
• Bank account assumptions: onboarding is a due diligence process, not a formality; prepare explanations and records.
• Working without permits: foreign staff need the correct work and residence permits before starting.
• Skipping local advice: rules differ by city and sector; generic guides are a starting point, not a substitute.

Build a realistic budget for setup, compliance, and professional fees, and revisit your structure as the business grows.