Set up and run a company in mainland China

01 · ChinaMNC

Why consider mainland China

Mainland China is a large and varied market. Founders usually enter for one of a few reasons: customers are there, suppliers are there, or the company needs a local legal presence to hire staff, invoice clients or hold contracts. Each reason points to a different setup, so start with the commercial goal rather than the paperwork.

Ask a few blunt questions before registering anything. Who is the first paying customer, and can they contract with a foreign entity instead? Do you need local employees on local payroll? Will you hold inventory, lease premises or sign long-term supplier agreements? Does your industry have extra licensing or foreign investment restrictions? The answers shape whether you need a full operating company, a lighter presence, or simply a cross-border service arrangement.

Also plan for ongoing obligations, not just day one. A registered company in mainland China brings bookkeeping, tax filings, statutory reporting and annual compliance. Budget time and money for these from the start. Founders who treat registration as the finish line often struggle later. Founders who treat it as the beginning of an operating commitment tend to build more durable local businesses.

02 · ChinaMNC

WFOE, joint venture or representative office

Most foreign founders choose between three structures. A wholly foreign-owned enterprise (WFOE) is a limited liability company owned entirely by foreign parties. It can conduct approved business activities, hire staff, invoice customers and hold assets. It is the most common vehicle for founders who want control and a full operating presence.

• WFOE: full foreign ownership; suited to trading, services, consulting, manufacturing and more, subject to industry rules and licensing.
• Joint venture (JV): shared ownership with a Chinese or foreign partner; useful where local partners bring licenses, land, distribution or relationships, but requires a clear shareholders' agreement and exit terms.
• Representative office (RO): a non-profit liaison presence; limited to market research, coordination and contact work, and cannot sign contracts or invoice customers directly.

The right choice depends on activity, industry restrictions, control preferences and how much local partnership you actually need. Review the current negative list for foreign investment and any sector-specific licensing before deciding. Do not assume an RO can do the work of a WFOE, and do not enter a JV without documented governance and exit mechanics.

03 · ChinaMNC

The five-step registration process

Registration in mainland China generally follows five stages. Exact procedures, portals and timelines differ by city and industry.

• Step 1: Plan and confirm feasibility. Define the business activity, check foreign investment rules and licensing, choose a city, and select the entity type.
• Step 2: Prepare the name and core documents. Reserve a company name, prepare incorporation documents, and gather investor and legal representative materials, often including notarisation and legalisation or apostille as required.
• Step 3: Submit the registration application. File with the local market regulation authority through the applicable system, including the articles of association, registered address and business scope.
• Step 4: Complete post-licence steps. Obtain the business licence, then arrange company seals, bank account opening, tax registration and any sector licences.
• Step 5: Start operations and stay compliant. Set up bookkeeping, invoicing, payroll and statutory filings, and track annual reporting and renewal obligations.

Sequence matters. Bank and tax steps depend on the licence, and some licences depend on premises. Plan the order with your local adviser.

04 · ChinaMNC

Documents to prepare

Document requirements vary by city, entity type and industry, but founders should expect a core set. Prepare clean, consistent versions early, because mismatches between documents are a common cause of delay.

• Investor documents: certificates of incorporation or equivalent for corporate shareholders, or passport copies for individual shareholders, often notarised and legalised or apostilled as required.
• Identity and authority documents: passports and contact details for the legal representative, directors, supervisors and authorised signatories.
• Incorporation documents: proposed company name, articles of association, capital and contribution details, and shareholder resolutions.
• Address evidence: lease or property documents for the registered address, in the form the local authority accepts.
• Business description: proposed business scope and any sector licence applications.

Translation may be required, and some documents must be signed in a specific format. Keep originals and digital copies organised. Ask your adviser for the current checklist for your chosen city before you start collecting signatures, so you do not have to redo notarisation or legalisation.

05 · ChinaMNC

Registered address and business scope

The registered address is the legal home of the company. It must be a genuine address the local authority accepts, and it may need to match the type of premises permitted for your activity. Options range from leased office space to approved serviced or virtual-style arrangements where local rules allow them. Check what your city and district accept, and confirm whether inspections or site checks apply. A mismatch between the registered address and actual operations can create compliance problems later.

Business scope describes what the company may do. Write it carefully: too narrow and you may be unable to invoice for intended services; too broad and you may trigger extra licensing or scrutiny. Standard wording exists for many activities, and some activities require pre-approval or a specific licence. Your scope should match your real plans and your tax and invoicing setup.

Address and scope also affect banking and tax. Banks may ask about premises and activity, and tax authorities look at scope when assessing invoices. Keep the registered record aligned with how the business actually operates, and update it when activities change. Consistency is simpler than correction.

06 · ChinaMNC

Banking, tax and visas

After registration, the operational setup begins. Opening a corporate bank account usually requires the business licence, company seals, identity documents and sometimes evidence of premises or business activity. Bank due diligence can take time, and requirements differ between banks and branches. Prepare consistent documents and be ready to explain your business model, customers and expected flows.

Tax registration and ongoing filing are mandatory. A newly registered company typically needs to confirm its tax status, set up bookkeeping and understand invoicing rules, VAT and corporate income tax obligations, and payroll withholding if it hires staff. Many founders engage a local accounting firm for monthly bookkeeping and filings. Do not treat tax registration as optional or assume zero activity means zero obligations.

Visas are separate from company registration. A work permit and residence permit are generally needed for foreign staff working in mainland China, and the process involves the employer and local authorities. Business visas suit short visits, not ongoing management. Plan immigration early, because hiring timelines depend on it. Confirm current requirements with a licensed professional.

07 · ChinaMNC

Common mistakes to avoid

Most problems are predictable. Founders who plan for them save time and money.

• Choosing the entity before the business model. Decide what the company must actually do, then pick the structure.
• Ignoring industry rules. Foreign investment restrictions and licensing can change the whole plan.
• Inconsistent documents. Mismatched names, addresses or signatures cause repeated filings.
• Underestimating post-registration compliance. Bookkeeping, tax filings and annual reporting are ongoing obligations.
• Treating the registered address as a formality. It must be accepted and aligned with operations.
• Writing an unrealistic business scope. Match scope to real activity and licensing.
• Leaving banking and visas late. Both can affect when you can actually trade and hire.

Finally, do not rely on informal advice from unrelated sources. City-level practice varies, and rules change. Work with a licensed local professional who can confirm current requirements for your specific activity, district and nationality, and keep your own record of filings and approvals.