01 · ChinaMNC
Why China, and what to settle before you start
China is a large and competitive market, and entering it usually means committing to local presence rather than selling from a distance. Many foreign founders choose to set up a legal entity because mainland customers, platforms and partners often expect a locally registered company to sign contracts and issue invoices.
Before choosing a structure, clarify four things. First, what you will actually sell and to whom. Second, whether your industry is open to foreign investment, restricted, or requires a licence. Third, where your people will work, because the registered city matters for filing and tax. Fourth, how money will move in and out, including capital contributions and future profit repatriation.
It also helps to decide how much control you want. A wholly foreign-owned enterprise gives you full ownership, while a joint venture brings a local partner and local knowledge but adds governance complexity. A representative office is limited in what it can do. The right answer depends on your activity, not on a generic preference.
02 · ChinaMNC
WFOE, joint venture or representative office
Wholly foreign-owned enterprise (WFOE). A common choice for founders who want full ownership and direct control. A WFOE can conduct approved business activities, hire staff and invoice customers. Its permitted scope is defined in its business licence, so the wording matters.
Joint venture (JV). A company shared with one or more Chinese or foreign partners. A JV can be useful where local relationships, licences or distribution matter, but it requires a clear shareholders' agreement, defined decision rights and a workable exit path. Disagreements are easier to prevent on paper than to resolve later.
Representative office (RO). A liaison presence that is generally not permitted to generate revenue directly. It suits market research or coordination, not full commercial operations.
- Choose a WFOE when you want control and your activity is open to foreign ownership.
- Consider a JV when a partner brings access you cannot easily replicate.
- Use an RO only for non-revenue liaison work.
03 · ChinaMNC
The five-step registration process
The exact steps differ by city and industry, but most registrations follow a similar arc.
- Step 1: Feasibility and structure. Confirm your activity is open to foreign investment, choose the entity type and city, and check whether a sector licence applies.
- Step 2: Name and scope. Reserve a company name and draft a business scope that accurately reflects what you will do. Overly broad or mismatched scope wording causes problems later.
- Step 3: Filing and approval. Prepare the incorporation documents and submit them through the local market regulation process, including foreign investment information reporting where required.
- Step 4: Licence and seals. Receive the business licence, then arrange company seals, which are used in local contracting and filings.
- Step 5: Go operational. Open bank accounts, complete tax registration, set up payroll and social insurance, and secure the right visas for foreign staff.
Each stage depends on the one before it, so a realistic plan is sequential rather than parallel. Ask your local adviser which steps are handled online and which require in-person attendance.
04 · ChinaMNC
Documents to prepare
Document requirements vary by city, but foreign founders are usually asked for a core set. Preparing clean, consistent paperwork reduces back-and-forth.
- Passport copies of foreign shareholders and legal representatives.
- Proof of address for foreign shareholders, often notarised and legalised or apostilled, depending on the document's origin.
- Certificate of incorporation and constitutional documents for corporate shareholders, similarly notarised and legalised where required.
- Translated versions of foreign-language documents, prepared to local standards.
- Proposed company name and business scope.
- Lease or proof of the registered address.
- Capital contribution details and the articles of association.
Notarisation and legalisation take time and should be started early. Keep names, addresses and signatures consistent across every document; small mismatches are a common cause of delay. Confirm the current list with your local adviser before submitting.
05 · ChinaMNC
Registered address and business scope
The registered address is the legal location of your company. It must be a real, documented premises acceptable for registration in the city where you file, and it affects which local authorities handle your filings. Some cities accept serviced or incubator addresses; others have stricter rules. Check before you sign a lease.
Business scope defines what your company may do. It appears on the business licence and shapes what you can invoice, which licences you need and how banks and tax authorities view your activity. Write it to match your real operations, including planned services, and avoid copying a template from an unrelated industry.
If your activity requires a pre-approval or sector licence, the scope must reflect that, and you may need to obtain the licence before or alongside registration. Changes to scope are possible later but involve filings and, sometimes, additional approvals. Getting the wording right at the start is usually cheaper than amending it.
06 · ChinaMNC
Banking, tax and visas in practice
After incorporation, the operating work begins. Opening a corporate bank account usually requires the legal representative and original documents, and banks apply their own onboarding checks. Expect questions about your business, ownership and expected transactions. Keep your registration documents, contracts and address evidence ready.
Tax registration follows incorporation. Your company will need to understand its tax obligations, invoicing rules and reporting calendar, and whether any incentives apply to your industry or location. Engage a local accountant early; tax filings are periodic and penalties for missed deadlines are avoidable.
Foreign staff need the correct visa and work permit. The common path involves a work permit and a residence permit, and the process depends on the role and qualifications. Plan this alongside hiring, not after. Payroll, social insurance and individual income tax registration should be set up before the first salary payment.
07 · ChinaMNC
Common mistakes to avoid
Most problems are predictable. Founders who plan for them save time and cost.
- Choosing the city for convenience rather than operations. Where your team, customers and advisers are based should drive the decision.
- Using a generic business scope. Mismatched wording can block invoicing or licences.
- Starting documents late. Notarisation and legalisation take time; begin before you need them.
- Ignoring the registered address. A non-compliant address can stall filings and banking.
- Assuming a bank account is automatic. Prepare for onboarding questions and document checks.
- Treating tax and payroll as an afterthought. Set up compliance before the first hire or invoice.
- Skipping local advice. Rules change and vary by city; a qualified local adviser is not optional.
None of these are unusual. They are simply easier to handle before incorporation than after.