Register and run a company in mainland China

01 · ChinaMNC

Why China, and what to check before you commit

China is a large, competitive and regionally diverse market. For a foreign founder, the appeal is usually a mix of market size, a deep supplier and manufacturing base, and speed of product iteration. The trade-off is that operating locally means operating inside a different regulatory, tax and commercial system, with Chinese-language filings and local approvals at each stage.

Before choosing a structure, pressure-test the fundamentals:

• Demand: can you reach customers without a local partner, and what does your sales motion look like?
• Sector rules: some activities are restricted or require a licence; check the negative list for foreign investment and any sector-specific approvals.
• Cash flow: how will you fund the entity, invoice customers, and move money in and out?
• People: who will run the entity locally, and do they need work authorisation?
• City choice: registration, tax and staffing practicalities differ between cities and districts.

Answering these early avoids the most expensive mistake: incorporating an entity that cannot legally do the business you actually plan to run.

02 · ChinaMNC

WFOE, joint venture or representative office?

Most foreign founders choose between three structures. Each suits a different stage and purpose.

WFOE (wholly foreign-owned enterprise) is a limited liability company owned entirely by foreign shareholders. It can generally 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 founders who want control and a full operating presence.

Joint venture (JV) is a company shared with one or more Chinese or foreign partners. It can make sense where local licences, distribution, land or government relationships are essential, or where sector rules require a Chinese shareholder. In exchange, you accept shared governance, diluted control and the need for a carefully drafted shareholders' agreement covering deadlock, exits and profit distribution.

Representative office (RO) is a liaison presence. It may not engage in profit-making business activity, so it suits market research, sourcing and coordination rather than selling. It is simpler in some respects but limited in what it can do and how it can employ staff.

Structure follows strategy: decide what the entity must legally be able to do, then pick the form that permits it.

03 · ChinaMNC

The five-step registration process

Exact steps and portals vary by city, but the sequence below reflects the usual path for a WFOE.

• 1. Name pre-approval and scope drafting. Propose several Chinese names in your preferred order and draft a business scope that matches what you will actually do. Scope wording matters: too narrow and you cannot operate; too broad and approvals get harder.
• 2. Prepare and file incorporation documents. Articles of association, shareholder and director details, legal representative appointment, proof of registered address, and investor documents, often notarised and legalised or apostilled depending on your home jurisdiction.
• 3. Obtain the business licence. Once the market regulator accepts the filing, the entity is legally established and receives its unified social credit code.
• 4. Complete post-licence registrations. Company seal carving, tax registration and bank account opening, plus any sector licences your activity requires.
• 5. Set up to operate. Sign premises, register staff, arrange payroll and social insurance, and put bookkeeping and filing routines in place.

Plan for the paperwork to take longer than you expect, especially where foreign documents need authentication. Do not sign leases or hire before the licence is issued.

04 · ChinaMNC

Documents you will typically be asked for

Requirements vary by city and by the type of investor, but a foreign founder should expect to prepare the following.

• Investor documents: certificate of incorporation or equivalent for a corporate shareholder, or passport for an individual; constitutional documents; and evidence of the ultimate beneficial owners.
• Authentication: foreign documents usually need notarisation and legalisation, or an apostille where the relevant convention applies. Confirm the current rule for your jurisdiction and city.
• Translated documents: Chinese translations, often with a translation statement or agency stamp.
• Governance documents: articles of association, shareholder resolutions, appointment of legal representative, directors and supervisors, and their identity documents.
• Address evidence: a lease or property certificate for the registered address, plus landlord documentation as required locally.
• Scope and application forms: the proposed business scope, name choices, and the market regulator's application forms.

Keep originals, scans and translations consistent: mismatched names, dates or addresses are a common cause of rejection and resubmission.

05 · ChinaMNC

Registered address and business scope

Two details trip up founders more than almost anything else: where the company is registered and what it is allowed to do.

Registered address. The company must have a registered address in the jurisdiction where it is filed. This is a legal address, not necessarily your office. Some cities allow serviced or virtual arrangements, but rules differ and some activities require a physical premises. Check that the address is acceptable for your business scope and that the landlord can provide the documents the regulator wants. Keep the lease and property papers on file; address changes later require formal amendment.

Business scope. This is the Chinese-language list of permitted activities recorded on the licence. It should describe what you will actually do, using the standard wording the local system recognises. Activities that require a licence, such as certain food, education, logistics or financial services, need separate approval and cannot simply be added to the scope. Wording that is too broad can slow approval; wording that is too narrow can block invoicing for real work.

Ask a local professional to review both before filing. Fixing them afterwards is possible but costs time.

06 · ChinaMNC

Banking, tax and visas after incorporation

Once the licence is issued, the practical work of running the entity begins.

Banking. Open a corporate RMB account with a bank that handles foreign-invested companies. Expect due diligence on shareholders, beneficial owners and the business, and prepare contracts, invoices and explanations of expected flows. Foreign-currency capital accounts are used for shareholder contributions; understand the foreign-exchange formalities before you wire funds.

Tax. Register with the tax authority, confirm your taxpayer status, and set up bookkeeping from day one. Corporate income tax, VAT and withholding obligations apply as relevant to your activity, and filing is periodic. Many founders engage a local accounting firm for bookkeeping, filings and payroll rather than building that capability immediately.

Visas and work authorisation. Foreign staff generally need a work permit and a residence permit to work legally in China; the process usually involves the employer as sponsor. Founders should confirm their own eligibility and category before travelling, and keep permits and contracts aligned. Business visas are not a substitute for working.

Build compliance routines early: late filings and missed deadlines create avoidable problems.

07 · ChinaMNC

Common mistakes foreign founders make

Most difficulties are predictable. These are the ones worth designing around.

• Choosing structure before strategy. Picking a WFOE, JV or RO before confirming what the business must legally do often leads to a rebuild.
• Underestimating authentication. Notarisation, legalisation or apostille and translation take time; starting late delays everything downstream.
• Copying a generic business scope. Scope wording is not cosmetic; it shapes what you can invoice and which licences you need.
• Ignoring the registered address rules. A cheap address that the regulator rejects, or that does not fit your activity, causes rework.
• Skipping local advice. Templates and internet guides cannot assess your sector, city or tax position.
• Treating banking as an afterthought. Due diligence takes preparation; have contracts and explanations ready.
• Working without permits. Foreign staff need proper authorisation; business visas are not a workaround.
• Neglecting bookkeeping. Poor records and late filings are expensive to fix.

None of these is unusual. The founders who do well plan the sequence, budget for professional help, and keep documents consistent.