Set up and run your company in mainland China

01 · ChinaMNC

Why consider mainland China

Foreign founders look at mainland China for reasons that are usually practical rather than abstract. It is a large and varied market, and for many products and services the question is not whether customers exist but whether a foreign-owned company can reach them efficiently. Having a local legal entity can make it easier to sign contracts with Chinese partners, invoice customers, hire staff and hold a bank account inside the country.

A local company also changes how you operate day to day. You can deal with suppliers and platforms as a domestic business rather than through an overseas parent, and you can build a local team under Chinese employment rules. For founders whose growth plan depends on proximity to customers, partners or manufacturing, an onshore presence is often part of the answer.

That said, entry is not automatic. Sector rules, licensing, capital and local requirements all shape what is possible, and these differ by industry and city. A careful founder treats China entry as a structured project: understand the market, confirm what your sector allows, then choose the entity and setup route that match your actual plan.

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 fits a different stage and purpose.

• WFOE: a company owned entirely by foreign investors. It can generally conduct permitted business activities, hire staff, invoice and hold funds. It is the common choice when you want full control and a real operating business.
• Joint venture: a company shared with a Chinese partner. It can suit sectors where local involvement is required or where a partner brings distribution, land, licences or relationships. Control, governance and exit terms need careful drafting.
• Representative office: a liaison presence that cannot generally earn revenue directly. It suits market research and coordination before you commit to a full entity.

The right choice depends on your sector, whether you need to invoice locally, how much control you want and how you plan to staff the operation. Confirm the current rules for your activity before deciding.

03 · ChinaMNC

The five-step registration process

Registration in mainland China usually follows a recognisable sequence, though the details and order vary by city and by entity type.

• Step 1: Plan and confirm feasibility. Define the business you intend to run, check whether your sector is open to foreign investment and what licensing applies, and choose the entity type and city.
• Step 2: Prepare the company name and core details. Reserve a name, settle the registered capital, shareholders, legal representative and registered address, and draft the articles of association.
• Step 3: File for establishment. Submit the application to the local market regulation authority, typically through the online enterprise registration system, and obtain the business licence.
• Step 4: Complete post-licence registrations. Arrange company seals, tax registration, bank account opening, foreign exchange registration where relevant, and any sector licences.
• Step 5: Start operating compliantly. Set up bookkeeping, payroll and invoicing, and arrange work permits and residence permits for foreign staff.

Timelines depend on approvals, document quality and local practice. Plan for sequencing rather than assuming fixed dates.

04 · ChinaMNC

Documents you will typically need

Document requirements differ by city and entity, but most foreign founders should expect to prepare a core set. Getting these right early usually saves time later.

• Investor documents: certificates of incorporation or equivalent for corporate shareholders, or passport copies for individual investors, often notarised and legalised or apostilled as required.
• Identity and authority: passports of directors, supervisors, legal representative and authorised signatories, plus board resolutions or powers of attorney where needed.
• Company formation papers: proposed names, articles of association, capital and shareholder details, and the lease or proof of the registered address.
• Translations: Chinese translations of foreign-language documents, prepared to local standards.
• Sector materials: additional licences, approvals or qualifications where your activity requires them.

Notarisation, legalisation and translation steps can take time, so start them early. Keep originals consistent and check names and dates carefully, because small mismatches are a common cause of delay.

05 · ChinaMNC

Registered address and business scope

Two details that founders often underestimate are the registered address and the business scope.

The registered address is the official location of your company. It must be a valid address accepted by the local authority, and in practice it may be a leased office or a permitted shared or virtual arrangement, depending on the city. Some addresses come with restrictions, and some activities require premises that meet specific standards. Confirm what your city accepts before signing a lease.

The business scope describes the activities your company is permitted to carry out. It is written in standard Chinese categories, and activities outside the listed scope may require separate approval or may not be allowed at all. If your plans are broad or likely to change, discuss how to structure the scope so it covers your intended operations without triggering unnecessary licensing. Getting this right at registration avoids amendments later.

Both items are easier to fix before filing than after, so treat them as part of planning, not paperwork.

06 · ChinaMNC

Banking, tax and visas in practice

Once the company exists, three operational areas demand attention.

Banking. Opening a corporate bank account usually requires the business licence, company seals, identity documents and the legal representative or authorised person to attend, though practice varies by bank and branch. Expect due diligence questions about your business and ownership. Foreign exchange rules affect how money moves in and out, so understand the basics before your first transfers.

Tax. Register with the tax authority and set up bookkeeping from day one. Companies typically deal with corporate income tax, value-added tax where applicable, and withholding on certain payments. Invoicing follows official systems, and monthly or quarterly filing obligations apply. Use a qualified accountant or bookkeeping firm; the rules are detailed and local practice matters.

Visas. Foreign staff generally need a work permit and a residence permit, and the process usually depends on the company being established and able to sponsor applications. Plan the timing alongside company setup so key people can be present when needed.

07 · ChinaMNC

Common mistakes to avoid

Most problems foreign founders encounter are avoidable with better preparation.

• Choosing the entity before the business plan. Pick the structure that fits what you will actually do, not the one that sounds simplest.
• Ignoring sector restrictions. Confirm whether your activity is open to foreign investment and what licensing applies before you commit to a city or lease.
• Underestimating documents. Notarisation, legalisation and translation take time; inconsistent names or dates cause delays.
• Treating address and scope as formalities. Both constrain what you can do and are easier to get right upfront.
• Assuming the bank account opens quickly. Prepare for due diligence and make sure the right people are available to attend.
• Leaving tax and payroll until later. Set up bookkeeping and compliance from the start rather than after the first filing deadline.
• Forgetting immigration timing. Work and residence permits depend on the company and take planning.

Good local advice, realistic sequencing and careful documents reduce most of these risks.