Starting and Running a Company in Mainland China: A Founder's Briefing

01 · ChinaMNC

Why China, and whether it fits your business

China is a large and varied market, and it rewards founders who arrive with a specific reason to be there. Before you think about paperwork, be clear about what you are selling or sourcing, who your customer is, and where in the country that customer sits. A company registration is a tool for a business plan, not a substitute for one.

Ask yourself a few direct questions. Does your product need a local entity to invoice customers, hire staff, or hold licences? Do you need to import or export, and does that change your structure? Will you serve customers online, offline, or both? Which city gives you the suppliers, talent, or customers you need?

Foreign founders often find that the practical reasons for a local entity are commercial: local contracts, local bank accounts, local employment, and access to sectors where a local presence is expected. Some activities are restricted or require approvals, and some are open to foreign ownership with conditions. The right answer depends on your activity, not on a general rule.

Treat the first phase as research, not registration. Talk to potential customers and partners, understand your competitive position, and confirm which approvals your specific activity needs. Only then choose an entity type and a city.

02 · ChinaMNC

Choosing a structure: WFOE, joint venture, or representative office

Three structures come up most often for foreign founders. Each fits a different purpose, and each carries different obligations.

• Wholly foreign-owned enterprise (WFOE): A limited liability company owned entirely by foreign investors. It can generally conduct the business activities listed in its scope and approved for foreign investment, hire employees, and invoice customers. It is the most common choice for founders who want control and a full operating presence.
• Joint venture (JV): A company shared with a Chinese or foreign partner. Useful where a local partner brings licences, land, distribution, or sector access, or where the activity requires local involvement. Control, profit sharing, governance, and exit need careful drafting, and partner alignment matters as much as the paperwork.
• Representative office (RO): A liaison office that cannot generally earn revenue directly. It suits market research, coordination, and contact-making, not invoicing or full operations. It is simpler in some respects but limited in what it can do.

Choose based on activity, ownership control, and how you intend to make money. If your scope is narrow and exploratory, an RO may be enough. If you plan to trade, hire, and invoice, a WFOE is usually the starting conversation. A JV is a commercial partnership decision first and a legal structure second.

03 · ChinaMNC

The five-step process, from planning to operation

Registration in mainland China tends to follow a sequence, though the details and order vary by city. Think of it in five stages.

• Step 1 — Plan and validate: Define your activity, choose a city, confirm whether your sector is open to foreign investment and what approvals apply, and decide on entity type and ownership.
• Step 2 — Prepare the company profile: Settle the company name, registered address, business scope, registered capital, legal representative, and shareholder structure. Name availability is checked with the local registration authority.
• Step 3 — Foreign investment and registration filings: Complete the foreign investment information filing where required, then submit company establishment materials to the market regulation authority. This is where the charter, shareholder documents, and address evidence come together.
• Step 4 — Post-establishment registrations: Obtain the business licence, then arrange company seals, tax registration, and the basic bank account. Each has its own documents and local practice.
• Step 5 — Operate and comply: Handle work and residence permits for foreign staff, set up bookkeeping and tax filing, and keep annual reporting and licence renewals on schedule.

Timelines depend on city, sector, document quality, and approvals, so plan for variability rather than a fixed number of weeks.

04 · ChinaMNC

Documents you will typically need

Document requirements differ by city and entity type, but most foreign founders should expect to prepare the following.

• Passport copies of shareholders, legal representative, and directors, with signatures where required.
• Proof of foreign company existence if a company is the shareholder: certificate of incorporation, and often notarised and legalised or apostilled documents, with Chinese translation where needed.
• Company charter or articles for the new entity, covering ownership, governance, capital, and scope.
• Registered address evidence: a lease or property document for the address you will register.
• Name reservation materials and the proposed business scope.
• Foreign investment filing information where applicable.
• Bank and tax onboarding documents after establishment, including seal impressions and authorised signatory details.
• Visa and work permit materials for foreign staff, such as degree or experience evidence and health checks.

Consistency matters. Names, addresses, and capital figures should match across every document. Notarisation, legalisation, and translation requirements are common sources of delay, so confirm the current local list before you courier originals.

05 · ChinaMNC

Registered address, business scope, and capital

Three details cause more friction than almost anything else, so give them early attention.

Registered address. Your company needs a registered address in the city of registration. It may be a leased office, a serviced office, or another arrangement accepted locally. The address must be documented, and some activities or districts have specific requirements. Check that the address can support the licences you need and that the landlord can provide the paperwork.

Business scope. This is the stated list of activities your company may conduct. Write it to match what you actually plan to do, using the local standard wording where possible. Too narrow a scope can block invoices or approvals; too broad a scope invites questions. Some activities require additional permits or approvals before you can operate.

Registered capital. This is the committed capital in the charter, with contribution rules that depend on structure and sector. It is not a marketing figure. Set it against your real funding plan, because it affects shareholder obligations and, in some cases, sector requirements.

Ask your local adviser to review all three together. They interact: an activity may demand a certain address standard or capital level, and fixing one after registration can mean amendments.

06 · ChinaMNC

Banking, tax, and visas in practice

Once the company exists, the operating work begins.

Banking. You will typically open a basic company account after establishment, and later a general account if needed. Banks conduct their own onboarding and due diligence, so expect questions about ownership, business activity, and expected flows. Prepare consistent documents and be ready to explain your business plainly. Foreign currency and cross-border payments have their own rules and documentation.

Tax. Register with the tax authority, confirm the taxes that apply to your activity, and set up bookkeeping from day one. China has regular filing obligations, including monthly or quarterly returns depending on your status, plus annual reporting. Invoices are managed through the official invoicing system. Many founders engage a local accounting firm; the important thing is that someone owns the filing calendar.

Visas. Foreign staff generally need a work permit and a residence permit to work in China. The process usually involves a permit notification, a Z visa or equivalent entry route, then the work permit and residence permit after arrival. Requirements depend on the role and the applicant's background. Plan this before staff travel, and keep permit renewals on the compliance calendar.

Each of these areas has local variation. Confirm current requirements in your city rather than relying on general descriptions.

07 · ChinaMNC

Common mistakes foreign founders make

Most problems are avoidable with a little foresight. These are the recurring ones.

• Choosing the entity before the business. Picking a WFOE or JV because it sounds standard, rather than because it fits the activity and ownership plan.
• Writing a vague or mismatched business scope. Then discovering that invoices, permits, or bank onboarding do not line up with the stated activities.
• Treating registered capital as a headline number. Committing more than the funding plan supports, or too little for sector requirements.
• Ignoring address requirements. Assuming any address works, only to find the district or activity requires something else.
• Underestimating document formalities. Missing notarisation, legalisation, or translation, which stalls the filing.
• Leaving tax and bookkeeping until later. Filing obligations start early, and gaps are expensive to fix.
• Handling visas at the last minute. Staff arriving before permits are ready, or permits lapsing without renewal.
• Assuming one city's practice applies everywhere. Rules and processes vary locally and change over time.

The fix is simple in principle: plan the business first, then the structure, then the documents, and keep a compliance calendar from the day the licence is issued.