01 · ChinaMNC
Why set up a company in China
Foreign founders usually choose mainland China for one of a few reasons: they want to sell to Chinese customers directly, they need a local legal entity to sign contracts and hire staff, or they want to sit closer to suppliers and partners. A locally registered company can issue invoices, open local bank accounts, employ people and hold intellectual property in its own name.
It also brings obligations. China is not a single market with one uniform rulebook; local authorities implement national rules with their own procedures and timelines. You should expect documentation, chops (official seals), and filings that are checked carefully.
Before you commit, be clear about what the entity must actually do: sell, hire, import, export, manufacture, hold IP, or support a parent company. That answer drives your choice of entity, business scope and registered address. Founders who start with the business plan and work backwards tend to make fewer costly changes later.
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).
- WFOE: a limited liability company wholly owned by the foreign investor. It can conduct permitted business activities within its approved scope, hire staff and invoice customers. It is the usual choice for founders who want control and a full operating entity.
- JV: a company shared with one or more Chinese or foreign partners. It can open doors to local partners, licenses or channels, but governance, capital contribution and exit terms need careful drafting before you sign.
- RO: a liaison office. It is not a separate legal person and cannot carry out profit-making business directly; it is generally used for market research, coordination and liaison.
Ask which structure matches your revenue model, not which is quickest to describe. Changing structure later is possible but rarely cheap.
03 · ChinaMNC
The five-step setup process
Setup generally moves through five stages. Details vary by city and by industry, so treat this as the shape of the process rather than a fixed calendar.
- Step 1 — Plan and check: define activities, choose the entity, confirm whether your industry has special entry requirements or restrictions, and select a city.
- Step 2 — Name and registration: reserve the company name and prepare the registration file, including investor documents, articles and the legal representative's details.
- Step 3 — Licenses and filings: complete the business license and any sector-specific permits, then register with the tax authority and complete the required seals and filings.
- Step 4 — Banking and capital: open the corporate bank account and handle capital contribution according to the registered documents and current foreign exchange rules.
- Step 5 — Operate: set up bookkeeping, invoicing and payroll, and arrange work permits and residence permits for foreign staff.
Keep a single document checklist and a named owner in your team for each step.
04 · ChinaMNC
Documents you will typically need
Exact requirements depend on the city, the entity type and the investor's home jurisdiction, but founders are usually asked for a core set of documents.
- Investor documents: certificate of incorporation or equivalent for a corporate investor, or passport for an individual investor.
- Notarisation and legalisation: investor documents often need notarisation and consular legalisation or an apostille, depending on the jurisdiction; confirm the current rule for your country and city.
- Company details: proposed names, registered address proof, business scope, registered capital, legal representative, supervisors and directors.
- Constitutional documents: articles of association and, where relevant, joint venture contracts.
- People: passport copies and contact details for the legal representative and key personnel.
Translations may be required. Documents that are expired, inconsistent or in the wrong legalised format are a common cause of delay, so check them early.
05 · ChinaMNC
Registered address and business scope
Two items deserve extra attention because they affect what your company can legally do and where.
Registered address. Every company needs a registered address in the jurisdiction where it is established. Some cities allow serviced or virtual office arrangements for certain activities; others require a physical space with supporting documents. The address appears on the business license and matters for tax registration and inspections. Do not treat it as a formality: verify what the landlord can provide and whether the address accepts your industry.
Business scope. The scope describes permitted activities. It should be written to cover what you actually plan to do, in the standard wording local authorities expect, without overreaching into licensed areas you are not ready for. Some activities require pre-approval or additional permits.
Review both whenever your model changes. Adding activities later is possible but involves filings, and some changes require amended licenses.
06 · ChinaMNC
Banking, tax and visas
Once the company exists, the operational basics come next.
Banking. Open a corporate account with a bank that understands foreign-invested companies. Expect know-your-customer checks on the company, its owners and signatories. Capital contribution and cross-border payments are subject to foreign exchange rules; keep supporting contracts and invoices organised.
Tax. Register with the tax authority, understand your invoicing obligations, and set up monthly or quarterly bookkeeping and filing. Taxes that commonly matter include corporate income tax, value-added tax and individual income tax on salaries. Rates and incentives depend on your activities and location, so get advice for your case.
Visas. Foreign employees generally need a work permit and a residence permit. The process involves the employer, local authorities and documented qualifications. Plan this before staff arrive; it is a common bottleneck.
Build a compliance calendar early and assign responsibility for each filing.
07 · ChinaMNC
Common mistakes to avoid
Most problems we see are avoidable with a little discipline.
- Choosing the entity by habit: picking a WFOE or JV before clarifying what the company must do.
- Ignoring licensing: assuming any permitted business can be conducted without sector approvals.
- Underestimating documents: late or wrongly legalised investor papers, inconsistent names, missing translations.
- Treating the registered address casually: using an address that does not accept your industry or cannot support filings.
- Writing the scope too narrowly or too broadly: either blocks planned activity or invites scrutiny you cannot satisfy.
- Leaving tax and payroll until later: missed filings and unclear invoicing create clean-up work.
- Skipping visa planning: staff arrive without the permits needed to work legally.
Get local professional advice on your structure, contracts and tax position before you sign or file.