Start and run a company in mainland China

01 · ChinaMNC

Why China, and what to check first

China remains one of the world's largest markets, with deep supply chains, a vast consumer base and an increasingly sophisticated industrial and digital ecosystem. For many foreign founders the question is not whether to enter, but how to enter in a way that matches their product, capital and risk appetite.

Start with clarity on four points. Market fit: who buys, at what price, through which channel. Operating model: do you need local staff, a warehouse, a factory relationship or only a sales presence? Capital and control: how much you will invest and how decisions are made. Compliance: which licences your activity requires.

China is not one market. Shanghai, Shenzhen, Beijing and inland cities differ in cost, talent and regulation. Sector rules also differ: manufacturing, food, education, healthcare and finance all carry extra requirements. Treat early research as an investment. Speak to customers, visit if you can, and map the regulatory path before choosing a city or entity. Assumptions carried over from other markets often fail here, so test them early.

02 · ChinaMNC

WFOE, joint venture or representative office?

Three structures dominate. A wholly foreign-owned enterprise (WFOE) is a limited liability company owned entirely by foreign investors. It can hire staff, invoice customers, import and export where permitted, and keep profits. It is the default choice for founders who want control and a full operating business.

A joint venture (JV) pairs you with a Chinese partner, usually as a limited liability company. JVs can open doors to local networks, licences or land, but they require careful negotiation of governance, capital contributions, profit sharing and exit. Many sectors no longer require a JV, so check whether the partnership adds real value rather than only perceived access.

A representative office (RO) is a liaison office. It cannot earn revenue directly. It suits market research, supplier coordination and brand presence, not sales or hiring at scale. ROs are simpler but limited.

Choose based on activity, not habit. If you will invoice, hire and hold assets, a WFOE is usually the practical route. If a licensed local partner is essential, explore a JV with clear exit terms.

03 · ChinaMNC

The five-step registration process

Exact procedures vary by city, but the sequence is broadly consistent.

• Step 1: Decide the model and scope. Confirm entity type, business scope, registered capital, legal representative and registered address. Check whether your activity needs a pre-approval or special licence.
• Step 2: Reserve the name. Submit proposed Chinese names to the market regulation authority. Names must follow local rules and avoid restricted terms.
• Step 3: Prepare and file incorporation documents. This typically includes the articles of association, investor documents, appointment letters and address proof. Documents from abroad often need notarisation and legalisation or an apostille, depending on the issuing country.
• Step 4: Obtain the business licence and seals. After approval you receive the business licence, then arrange company seals, which are central to contracts and banking in China.
• Step 5: Complete post-registration steps. Open a bank account, register for tax, set up bookkeeping, register with social insurance and housing fund where you hire, and arrange work permits and visas for foreign staff.

Plan for document corrections and local variations. A local adviser or corporate services firm can reduce avoidable delays.

04 · ChinaMNC

Documents foreign founders usually need

Requirements differ by city and entity type, but prepare for the following.

• Investor identity and corporate documents: passports for individual shareholders; certificate of incorporation, articles and register of directors for corporate shareholders.
• Notarisation and legalisation: foreign documents are commonly notarised and then legalised, or apostilled where the Hague Apostille Convention applies. Confirm the current rule for your jurisdiction and the receiving Chinese authority.
• Proof of registered address: a lease or ownership document for the premises, plus any required filing or consent from the property owner.
• Governance documents: articles of association, shareholder resolutions, appointment of legal representative, directors and supervisor.
• Name reservation materials: proposed Chinese names and backups.
• Translations: Chinese translations of foreign-language documents, often required to be stamped or certified.

Keep originals and scanned copies organised. Mismatches between names, addresses and capital figures across documents are a frequent cause of rejection. If you plan to hire foreign staff, prepare degree certificates and background-check documents early, since work permit applications require them.

05 · ChinaMNC

Registered address, business scope and licences

The registered address is the company's official legal location. It must be a real, documented premises acceptable to the local authority. Many founders use a serviced office or an approved virtual address where local rules allow, but confirm that the address can support your business scope and receive official mail. Some activities, such as manufacturing or food service, require premises that meet specific standards.

Business scope describes permitted activities. Write it carefully: too narrow and you may need to amend it later; too broad and authorities may ask for clarification or reject items. Regulated activities such as food, pharmaceuticals, education, logistics and finance may need separate licences before or after registration. Check whether your planned activity is on a restricted or encouraged list for foreign investment, and whether it requires a joint venture or a specific approval.

Address and scope are linked. A trading company may operate from an office, while a production company needs suitable industrial premises. Decide both before filing to avoid amendments and re-filings soon after launch.

06 · ChinaMNC

Banking, tax, accounting and visas

After incorporation, practical operations begin.

Banking: open a corporate RMB account and, where needed, a foreign currency account. Banks apply their own due diligence, so expect questions about ownership, business activity and expected flows. Prepare contracts, invoices and clear explanations of your model. Online banking is standard, but transaction limits and approval processes vary.

Tax and accounting: register with the tax authority, confirm your taxpayer status and set up bookkeeping. China has several tax types, including corporate income tax, value-added tax and withholding tax on certain payments abroad. Filing is periodic and largely digital. Engage a qualified accountant or bookkeeping firm from day one; informal arrangements tend to create problems later.

Visas and work permits: foreign employees generally need a work permit and a residence permit to work legally. The process involves employer sponsorship, qualifications and sometimes a medical check. Founders should plan their own status alongside staff hiring, since business visas are not a substitute for a work permit.

Social insurance: register and contribute where required for local and foreign employees.

07 · ChinaMNC

Common mistakes to avoid

Most problems are predictable.

• Choosing an entity by habit. A representative office cannot invoice; a JV chosen only for comfort can create governance deadlock. Match structure to activity.
• Rushing the business scope. A vague or overbroad scope invites questions, while a narrow one blocks invoicing. Draft it against actual contracts.
• Ignoring document consistency. Name spellings, addresses and capital figures must match across all filings and translations.
• Underestimating banking due diligence. Have a clear story, real contracts and a coherent ownership chain ready.
• Treating tax as an afterthought. Late or missing filings can affect credit status and future applications.
• Using the wrong visa. Working on a tourist or business visa creates legal risk for the company and the individual.
• Skipping local advice. City-level practice matters. A local accountant or adviser is usually cheaper than fixing a rejected filing or a compliance breach.

Build a simple compliance calendar from day one and review it quarterly.