Set up and run your company in mainland China

01 · ChinaMNC

Why China

Founders look at mainland China for three broad reasons: the size and depth of the domestic market, the concentration of manufacturing and supplier ecosystems, and the presence of customers, partners or competitors that matter to their industry. For many businesses the question is not whether China is large, but whether your specific product, price point and channel fit a market where local competition is strong and customer expectations differ from your home market.

Operating locally changes what you can do. A registered entity can hire staff, invoice customers, hold a bank account, sign contracts and apply for the permits your activity requires. That said, registration is a means, not a strategy. Before you start, be clear about who your first customers are, how you will reach them, and what you can realistically support from your existing team.

• Market access: a local entity lets you contract, invoice and hire in China.
• Supply chains: proximity to suppliers and production partners can shorten feedback loops.
• Commitment signal: local presence can matter to partners and enterprise buyers.
• Complexity: licensing, tax and labour rules require local expertise.

02 · ChinaMNC

WFOE, JV or RO

Most foreign founders choose between three structures. A wholly foreign-owned enterprise (WFOE) is a limited liability company owned entirely by foreign investors; it can generally conduct the business activities listed in its approved scope, hire staff and invoice customers. A joint venture (JV) brings in a Chinese partner, which can help with market access, local relationships or licensed activities, but it also means shared control, shared profits and a shareholders' agreement that must be negotiated carefully.

A representative office (RO) is the lightest option. It is not a separate legal person and is normally limited to liaison, market research and coordination activities; it generally cannot sign contracts on its own behalf, invoice customers or employ staff directly in the way a company can. It can be useful for testing a market, but it is rarely a substitute for an operating company.

• WFOE: full control, defined business scope, suitable for most operating businesses.
• JV: access and local partnership in exchange for shared ownership and governance.
• RO: liaison only, limited commercial activity, often a first step rather than a final structure.

The right choice depends on your sector, whether foreign ownership is restricted, and how much control you need. Confirm the current rules for your activity before deciding.

03 · ChinaMNC

The five-step registration process

Registration in mainland China generally follows a sequence, though the details and order of some steps vary by city. Plan for each step to depend on the one before it, and expect document checks along the way.

• Step 1 — Feasibility and structure: define your business activity, choose WFOE, JV or RO, and confirm whether your sector has foreign investment restrictions or additional licensing.
• Step 2 — Name and scope: reserve a company name and draft a business scope that accurately describes what you will do; the wording affects later licensing and tax treatment.
• Step 3 — Registration filing: submit incorporation documents, investor information and the registered address to the market regulation authority and obtain the business licence.
• Step 4 — Post-licence formalities: complete company seals, bank account opening, tax registration and any industry-specific permits your activity requires.
• Step 5 — Operate compliantly: set up bookkeeping, invoicing, payroll and social insurance, and keep filings current.

Timelines depend on your city, sector and how quickly documents are produced and accepted. Treat any schedule you are given as an estimate and build buffer into your plan.

04 · ChinaMNC

Documents you will likely need

Document requirements differ by city and entity type, and authorities may ask for additional items. The list below reflects what founders commonly prepare; confirm the exact set with your local adviser before submission.

• Investor documents: certificate of incorporation or equivalent for corporate investors, or passport for individual investors.
• Notarisation and legalisation: investor documents often need notarisation and, where applicable, consular legalisation or an apostille; rules depend on the investor's jurisdiction.
• Company particulars: proposed name, registered address, business scope and registered capital.
• Governance documents: articles of association, and for a JV, the joint venture contract and shareholders' agreement.
• People: identification for the legal representative, directors, supervisors and the person handling the filing.
• Translations: Chinese translations of foreign-language documents, often prepared to a required standard.

Originals, signatures and consistency across documents matter. Small mismatches in names or addresses are a common cause of delay.

05 · ChinaMNC

Registered address and business scope

Every company needs a registered address in the jurisdiction where it is filed. In practice this is often a serviced office or an address provided by a registered agent, and some cities allow certain businesses to use a virtual or shared address. Landlords and providers usually supply the lease and ownership documents the authority requires. Check that the address is acceptable for your specific business activity, because some activities require a physical premises that meets additional standards.

Business scope is the formal description of what your company may do. It should be specific enough to cover your actual operations without overreaching into activities that trigger permits you do not hold. Wording matters: certain phrases signal a licensed activity, and some scopes affect tax treatment or eligibility for incentives. If you plan to expand later, consider whether the scope can be amended when needed rather than trying to include everything at the start.

• Address: must be documented and acceptable for your activity.
• Scope: accurate, specific and consistent with your licences.
• Changes: address and scope can usually be amended later through a formal filing.

06 · ChinaMNC

Banking, tax and visas

After incorporation, most founders focus on three operating essentials. First, banking: opening a corporate RMB account usually involves submitting the business licence, seals, identification and governance documents, and banks apply their own due diligence. Approval is not automatic, and the process can take time. Plan how you will fund the company and pay suppliers while the account is being set up.

Second, tax. A new company typically registers with the tax authority and must keep proper books, issue invoices through the official system, and file returns on the required schedule. Corporate income tax, value-added tax and payroll-related obligations apply depending on your activity and status; rates, thresholds and incentives vary and should be confirmed for your situation. Many founders engage a local accounting firm from day one.

Third, visas and work permits. Foreign staff generally need a work permit and a residence permit to live and work in China, and the route depends on role, qualifications and the employer. Business visas are for short visits, not for running operations. Rules change, so confirm current requirements with the relevant authorities or a qualified adviser.

07 · ChinaMNC

Common mistakes to avoid

Most problems we see are avoidable and come from moving too fast or treating China as a single uniform market. The points below are the ones founders most often raise in hindsight.

• Skipping market validation: registering a company before confirming who will buy, and at what price, can turn a fixed cost into a long wait.
• Assuming one city represents all of China: licensing, incentives and procedures differ by locality; choose your city for business reasons.
• Vague business scope: a scope that is too broad or too narrow causes licensing and tax complications later.
• Underestimating documents: notarisation, legalisation and translation take time and small errors cause rejections.
• Ignoring the bank account: opening a corporate account is a separate process with its own checks; do not assume it is instant.
• No local finance support: bookkeeping, invoicing and filings are ongoing obligations, not one-off tasks.
• Treating a JV as a formality: governance, exit and dispute terms need real negotiation before signing.

None of these are reasons to avoid China. They are reasons to plan carefully and get local advice before you commit.