01 · ChinaMNC
Why founders look at mainland China
Founders usually come to mainland China for one of a few reasons: they want to sell into a large domestic market, they need to be close to manufacturing and supply chains, or they want a local team that can hold customer relationships and contracts directly. A locally registered company can sign agreements, invoice in renminbi, hire staff and open bank accounts, which a foreign parent cannot do on its own.
It is also a market where preparation matters. Rules are set nationally but administered locally, so the same business can face different documentation requests in different cities or districts. Sector restrictions, licensing and capital rules need checking before you commit.
- Market access: confirm whether your activity is permitted, restricted or requires a specific licence.
- Local presence: decide whether you need a legal entity or whether a lighter arrangement is enough.
- Operational reality: plan for banking, invoicing, payroll and tax compliance from day one.
Our advice to founders is to start with the activity you want to conduct, not with the entity type. The activity determines the licence, the scope, the capital conversation and often the city.
02 · ChinaMNC
WFOE, joint venture or representative office
The three structures foreign founders ask about most are the wholly foreign-owned enterprise (WFOE), the joint venture (JV) and the representative office (RO). Each fits a different situation, and none is universally better.
- WFOE: a limited liability company owned entirely by foreign investors. It can generally conduct the business listed in its scope, hire staff, invoice and hold assets. It requires registered capital, a registered address, a charter and a compliant business scope.
- Joint venture: a company shared with a Chinese or foreign partner. Useful where local licensing, land, distribution or sector rules favour a domestic partner, but governance, profit sharing and exit terms need careful drafting.
- Representative office: a non-profit-making liaison office. It can support market research and coordination but cannot generally earn revenue directly. Suitable for testing a market before committing to a full entity.
Consider capital, control, licensing and exit before choosing. Founders who expect to invoice customers quickly should look closely at a WFOE; those entering a regulated sector may need a JV or a specific licence. Confirm current rules for your activity with a local professional before deciding.
03 · ChinaMNC
The five-step registration process
Registration in mainland China follows a recognisable sequence. Timelines vary by city, sector and how complete your paperwork is, so treat this as an order of work rather than a schedule.
- Step one, scope and feasibility: define the business activities, check whether they are permitted and identify any pre-approvals or licences. Choose the city and district.
- Step two, name reservation: submit proposed company names for approval through the local registration system. Names must follow Chinese naming conventions and avoid restricted terms.
- Step three, documents and filing: prepare the charter, investor papers, lease and appointment documents, then file for the business licence with the market regulation authority.
- Step four, post-licence registrations: arrange company seals, tax registration, bank account opening and any sector licence needed before trading.
- Step five, people and operations: set up payroll, social insurance, accounting and the work permits and residence permits your foreign staff will need.
Each step depends on the previous one, and a missing document can pause the chain. Build in time for translations, notarisation and legalisation of foreign papers.
04 · ChinaMNC
Documents you will be asked for
Document requirements differ by city, entity type and activity, but most foreign founders should expect to prepare a core set. Getting these right early reduces back-and-forth.
- Investor documents: certificate of incorporation or equivalent for the foreign company, plus constitutional documents. These often need notarisation and legalisation or an apostille, depending on the jurisdiction.
- Identity documents: passports for foreign directors, legal representatives and shareholders; identity cards where Chinese nationals are involved.
- Company charter: articles of association setting out governance, capital, profit distribution and decision rights.
- Registered address: a lease or proof of use for the premises, in a form the local authority accepts.
- Scope and capital: the proposed business scope and registered capital, with a contribution schedule.
- Appointments: resolutions naming the legal representative, directors, supervisor and, where required, the finance officer.
Translations into Chinese are normally required, and signatures may need to be witnessed or notarised. Keep originals consistent across documents; mismatched names and addresses are a common cause of delay.
05 · ChinaMNC
Registered address and business scope
Two decisions shape how smoothly a company can operate: where it is registered and what it is allowed to do.
Registered address. The company must have a registered place of business that the local authority accepts. This can be leased office space, and in some districts serviced or shared arrangements are possible, but rules differ and some activities require a physical site. The address affects the district authority you deal with, local tax administration and sometimes licensing. Check that the landlord can provide the documentation the registration system expects, and confirm the use of the premises is permitted for your activity.
Business scope. The scope lists the activities the company may conduct. It should be specific enough to cover your real operations without listing unrelated items that trigger extra approvals. Some activities require a pre-approval or a separate licence before they can be included or before trading begins. Founders often under-specify the scope and then find they cannot invoice for a service they actually sell, or over-specify and inherit unnecessary compliance. Review the scope against your revenue plan and update it formally if the business changes.
06 · ChinaMNC
Banking, tax and visas after incorporation
Once the licence is issued, the operating work begins. These are the areas where new companies most often need local support.
- Banking: open a basic corporate account for renminbi operations. Banks apply their own due diligence, so expect questions about ownership, business substance and expected flows. Keep investor and transaction documents ready.
- Tax: complete tax registration and understand your filing obligations, including invoices, VAT-type taxes and corporate income tax. Engage a qualified accountant early; bookkeeping is a recurring obligation, not a one-off task.
- Payroll and social insurance: register as an employer and enrol staff in the required social insurance schemes.
- Visas: foreign staff generally need a work permit and a residence permit. The process involves the employer, local labour and immigration authorities, and depends on qualifications and the role. Founders should confirm their own immigration route before arriving.
Rules and local practice change. Verify current requirements with your bank, accountant and local authority rather than relying on older guides.
07 · ChinaMNC
Common mistakes to avoid
Most problems we see are avoidable with a little discipline. These are the recurring ones.
- Choosing the entity before the activity: the business you intend to conduct should drive the structure, scope and licence, not the other way round.
- Underestimating documentation: notarisation, legalisation, translation and signature requirements take time. Inconsistent names or addresses across documents cause rejections.
- Ignoring the restricted list: assuming any activity is open to foreign investment. Check the current negative list and sector rules for your business.
- Setting capital without a plan: registered capital is a commitment with a contribution schedule. Choose an amount you can fund and justify.
- Treating the licence as the finish line: bank account, tax registration, invoicing, payroll and visas all need attention before you can trade normally.
- No local accounting from day one: late or incomplete bookkeeping creates friction with tax authorities.
- Copying another company's scope or charter: templates that do not match your operations create compliance gaps later.
Plan for local professional review of your filings, and keep your corporate records consistent as the business grows.