Set Up and Run Your Company in Mainland China

01 · ChinaMNC

Why China for foreign founders

China remains one of the world's largest consumer and industrial markets, and many foreign founders want a local legal entity so they can contract with Chinese suppliers and customers, invoice in renminbi, hire staff and hold a bank account onshore. A locally registered company can make it easier to sign enforceable contracts, manage customs and logistics, and protect brand and intellectual property through local filings.

Operating onshore also means operating inside a regulated environment. Foreign investment is governed by national laws plus a negative list that sets out sectors with restrictions or prohibitions, and some industries require additional licences before trading. Cities and districts administer registration differently, and timelines depend on document readiness and local workload.

The practical question is not whether China is attractive, but whether an onshore entity fits your business model. Founders selling through local distributors, running a service team, or sourcing at scale often benefit; those testing demand may prefer to start with contracts and a representative presence first.

02 · ChinaMNC

WFOE, joint venture or representative office

A wholly foreign-owned enterprise (WFOE) is the most common choice for founders who want full control. It is a separate legal person, can generate revenue within its approved business scope, hire employees and hold assets. Setup is more involved than a representative office, and it requires a registered address and capital arrangements that match local rules.

A joint venture (JV) pairs your investment with a Chinese partner, typically as an equity joint venture or a contractual cooperation. A JV can open doors to local networks, licences or land, but it also means shared governance, diluted control and a partnership agreement that must anticipate deadlocks and exit. Choose it for strategic access, not to avoid paperwork.

A representative office (RO) is a non-profit liaison presence. It cannot sign revenue-generating contracts on its own account, and it suits market research or coordination. It is simpler in some respects but still requires registration, a address, a chief representative and tax compliance. Many founders outgrow an RO quickly.

• WFOE: full control, revenue-capable, more setup work.
• JV: local partner access, shared control, detailed agreements.
• RO: liaison only, no direct revenue, lighter scope.

03 · ChinaMNC

The five-step registration process

While details vary by city, most foreign-invested company registrations follow a similar arc. Treat these as stages, not fixed dates, and confirm each with your local registration authority and adviser.

• Step 1 — Feasibility and name. Confirm your activity is permitted for foreign investment, check sector rules, and reserve a company name through the local market regulation system. Prepare several alternatives.
• Step 2 — Approval and filing. Where required, complete foreign investment information reporting and any industry-specific pre-approval. Sector and city determine what applies.
• Step 3 — Business licence. Submit the charter, investor documents, address proof and officer details to obtain the business licence, which establishes the legal entity.
• Step 4 — Post-licence registrations. Arrange company seals, then bank account opening, tax registration, and where relevant customs, foreign exchange and social insurance enrolment.
• Step 5 — People and operations. Obtain work permits and residence permits for foreign staff, sign leases, and put accounting and filing routines in place before trading.

Sequence matters: banking and tax steps usually follow the licence, and hiring foreign staff depends on the entity existing. Build a checklist with your adviser rather than relying on generic timelines.

04 · ChinaMNC

Documents you will typically need

Registration authorities ask for a consistent document set. Exact lists differ by city and entity type, and documents issued abroad usually need notarisation and legalisation, or an apostille where applicable, plus Chinese translation. Ask the local authority or your adviser for the current list before you start.

• Investor identity: passports for individual shareholders, or corporate documents for a parent company.
• Notarised and legalised papers: certificate of incorporation, shareholder and director records, and good-standing evidence for corporate investors.
• Company charter: articles of association covering governance, capital, profit distribution and transfer rules.
• Address evidence: lease or ownership documents for the registered address, plus any landlord authorisations.
• Officer details: legal representative, directors, supervisor and general manager, with identification.
• Name alternatives: several proposed Chinese names and, where used, an English name.
• Application forms: signed filings, foreign investment reporting where required, and sector-specific materials.

Keep originals, scans and translations aligned. Mismatches between names, addresses or capital figures across documents are a frequent cause of delays and resubmission.

05 · ChinaMNC

Registered address and business scope

The registered address is the company's official legal location. It must be a real, documented premises acceptable to the local authority, and some districts restrict certain activities to particular buildings or zones. A virtual or shared address may be allowed in some places and for some activities, but rules vary and enforcement is local. Confirm zoning, landlord consent and what evidence the authority accepts before signing a lease.

Business scope defines what the company may do. It is written in standardised categories, and some activities require a licence before or after registration. Draft it to cover your real operations without overreaching: too narrow and you may need to amend later; too broad and you may trigger extra approvals or scrutiny. Cross-border e-commerce, consulting, manufacturing and food-related activities each carry different requirements.

Capital, address and scope are linked. Authorities may ask whether declared capital and premises match the stated activity. Founders should document the business plan behind these choices and revisit them as the company grows, since changes require filings and sometimes approvals.

06 · ChinaMNC

Banking, tax and visas

After the business licence, open a corporate bank account. Banks conduct their own due diligence, so expect questions on ownership, business model, expected flows and counterparties. Prepare a clear explanation, contracts or invoices, and consistent documents. A foreign exchange capital account is typically needed for injecting registered capital, and routine operational banking follows.

Tax registration and ongoing filing are mandatory. The company generally needs accounting records, invoices, periodic tax returns and, depending on activity, VAT and other obligations. Many founders engage a local bookkeeping firm or accountant; the key is a routine that keeps filings accurate and on time. Tax incentives and treatments depend on location, industry and facts, so confirm eligibility rather than assuming.

Foreign staff need a work permit and usually a residence permit; the process generally involves the employer, a health check and documented qualifications. Family members may have separate routes. Rules and processing vary by city and change over time, so verify current requirements with the local exit-entry and labour authorities before making commitments.

07 · ChinaMNC

Common mistakes to avoid

Most problems are avoidable with preparation. Founders often underestimate how much local variation matters: a process that works in one district may differ in another, and sector rules can add approvals that generic guides omit. Confirm your specific activity and location first.

• Assuming one entity fits all: choosing a WFOE, JV or RO before clarifying revenue, control and licensing needs.
• Weak document hygiene: missing notarisation, legalisation or translation, or inconsistent names and addresses.
• Ignoring the address: signing a lease that the authority will not accept, or misunderstanding zoning.
• Overbroad or narrow scope: writing activity descriptions that trigger unwanted approvals or block real operations.
• Treating banking as automatic: arriving without a clear explanation of ownership and expected transactions.
• Deferring compliance: leaving accounting, tax filing or visa steps until after trading begins.
• Relying on hearsay: acting on outdated timelines or rules instead of current local guidance.

Get written confirmation where you can, keep a single document set, and involve a qualified local adviser early. Careful setup is usually cheaper than correcting it later.