Start and Run Your Company in Mainland China

01 · ChinaMNC

Why China

China remains one of the world's largest consumer and industrial markets, with deep supply chains, a dense network of suppliers and a large pool of engineering and manufacturing talent. For many foreign founders, being locally registered makes it easier to hire staff, invoice customers in renminbi, sign contracts with local partners and access local banking and payment infrastructure.

It is also a market where rules are applied locally. Sector-specific licensing, foreign investment rules and local administrative practice can differ from city to city. Before committing, founders should confirm whether their activity is encouraged, restricted or prohibited for foreign investment, and whether an additional license is needed.

Treat market entry as a project with legal, tax, banking and hiring workstreams running in parallel. A locally registered entity is usually the foundation, not the finish line: operations, compliance and customer traction decide whether the structure pays off.

02 · ChinaMNC

WFOE, JV or RO

The three structures foreign founders most often consider are the wholly foreign-owned enterprise (WFOE), the joint venture (JV) and the representative office (RO). Each fits a different purpose.

• WFOE: a separate legal entity owned by the foreign investor. It can conduct permitted business activities, hire employees and invoice customers. Most founders seeking to operate choose this route.
• JV: a company shared with a Chinese partner. Useful where local licenses, land, distribution or know-how require a partner, but governance, profit sharing and exit terms need careful drafting.
• RO: a liaison office. It cannot generate revenue directly; it is limited to market research, liaison and similar activities. Suitable for testing a market, not for selling.

Selection depends on your activity, sector restrictions, capital plan and appetite for sharing control. Confirm the current foreign investment catalogue and local rules before deciding.

03 · ChinaMNC

The Five-Step Process

Registration generally follows a sequence. Local practice and timelines vary, so treat this as an outline rather than a fixed schedule.

• Step 1: Preparatory checks. Confirm the entity type, sector access, company name options, registered capital plan and registered address.
• Step 2: Name and approval. Submit proposed Chinese company names for checking, and complete foreign investment information reporting where applicable.
• Step 3: Business registration. File the application with the local market regulation authority and obtain the business license.
• Step 4: Post-license formalities. Have seals made, open a bank account, complete tax registration and, where required, register with other authorities.
• Step 5: Operational setup. Arrange bookkeeping, invoicing, payroll, work permits and residence permits for foreign staff, and any sector license your activity needs.

Expect document translation, notarization and legalization requirements for foreign-origin papers.

04 · ChinaMNC

Documents You Will Need

The exact document list depends on entity type and city, but foreign founders typically prepare the following:

• Passport copies of foreign investors and legal representatives.
• Proof of the foreign company's existence, such as a certificate of incorporation, often notarized and legalized or apostilled as required.
• Proposed Chinese company names and an English name where used.
• Articles of association and the investment plan.
• Proof of the registered address, such as a lease or property document.
• Business scope wording and registered capital details.
• Appointment documents for directors, supervisors and the legal representative.

Translations into Chinese are usually needed. Some documents may need notarization and consular legalization, or an apostille where applicable. Requirements change, so verify the current list with your local registration authority before submitting.

05 · ChinaMNC

Registered Address and Business Scope

Your registered address must be a real, usable address accepted by the local authority. Many founders use a serviced office or an incubator address; some cities accept virtual or shared addresses for certain activities, but this is not universal. Check zoning, landlord paperwork and whether the address supports the licenses you need.

Business scope is the formal description of what your company may do. Write it to cover your actual activities, with room for reasonable expansion, but keep it accurate: some activities require pre-approval or additional licenses, and wording that is too broad can trigger questions.

Registered capital is a commitment, not a marketing figure. Under current rules, capital contribution timelines are generally set in the articles and must be realistic for your plan. Choose amounts that match your operations, licensing needs and banking expectations.

06 · ChinaMNC

Banking, Tax and Visas

After the business license, the company needs a basic bank account. Banks differ in onboarding requirements, and foreign-owned companies may face enhanced due diligence. Prepare ownership information, business documents and explanations of expected transactions.

Tax registration follows. You should understand your VAT status, invoicing needs, corporate income tax obligations and bookkeeping requirements. Many founders appoint a local accounting firm for monthly filings and annual reporting. Employment taxes and social insurance apply when you hire staff.

Foreign founders and staff need the right visa status. Working in China generally requires a work permit and a residence permit; short-term business visas do not authorize local employment. Plan permit timing alongside company setup, since some steps depend on the company being registered first.

07 · ChinaMNC

Common Mistakes to Avoid

Many delays come from avoidable errors rather than the rules themselves.

• Choosing the wrong entity: an RO cannot invoice customers, and a JV needs governance terms that anticipate disagreement.
• Vague business scope: missing activities can block invoicing or licensing later.
• Unrealistic capital: promising more than you can contribute creates pressure and compliance risk.
• Address problems: a cheap address that does not support your activity can stall registration or licenses.
• Ignoring tax and bookkeeping: late or missing filings create penalties even for dormant companies.
• Visa timing: assuming a business visa allows you to run the company locally.
• No local advice: sector rules and city practice change; a local lawyer or accountant is worth the cost.

Build a checklist, keep documents consistent and confirm requirements before each filing.