China

Company Formation in China

China

Formation Time

4–8 weeks

Min. Capital

Varies by industry (subscribed capital system)

Corporate Tax

25%

Foreign Ownership

100%

Overview

China is the world's second-largest economy with a GDP exceeding USD 17 trillion and a consumer market of 1.4 billion people. The Wholly Foreign-Owned Enterprise (WFOE) is the primary vehicle for foreign investors, allowing 100% foreign ownership without a Chinese partner. Since the Foreign Investment Law (2020), China uses a 'negative list' approach — foreign investment is permitted in all sectors not explicitly restricted. Registration is handled through the State Administration for Market Regulation (SAMR), along with tax bureau, customs, and SAFE registration. The standard corporate tax rate is 25%, with preferential rates of 15% for High and New Technology Enterprises (HNTE). China's 110+ double tax treaties, massive manufacturing infrastructure, and growing domestic consumption make it indispensable for global businesses.

World's 2nd economy

100% WFOE ownership

110+ treaties

15% HNTE rate

Free Trade Zones

Why Choose China

World's 2nd largest economy — 1.4 billion consumer market

100% foreign ownership via WFOE structure

110+ double tax treaties — world's largest treaty network

15% preferential tax for High and New Technology Enterprises

Free Trade Zones (FTZs) with streamlined registration and incentives

Massive manufacturing and supply chain infrastructure

Growing domestic consumer market driving unprecedented demand

Negative list approach simplifies FDI approvals for most sectors

Business Entity Types

Entity	Ownership	Directors	Capital	Tax	Best For
WFOE (Wholly Foreign-Owned Enterprise)	100%	1 executive director (or board of 3–13)	Subscribed capital (varies by industry; no general minimum since 2014)	25% standard; 15% HNTE; 20% for small low-profit enterprises (effective 5%)	Manufacturing, trading, consulting, technology — most foreign businesses
Joint Venture (JV)	Varies (can be minority or majority)	Board of directors required	Varies by industry	25% standard; profit sharing per JV agreement	Industries requiring local knowledge, restricted sectors, government contracts
Representative Office (RO)	100% (extension of foreign parent)	1 chief representative + up to 3 representatives	None	Deemed profit method — typically 10% of expenses	Market research, liaison, non-revenue activities
Foreign-Invested Partnership (FIP)	100%	N/A	No minimum	Pass-through to partners (no entity-level tax)	Investment funds, PE/VC, professional services

Step-by-Step Formation Process

Name Pre-Approval

1–3 days

Submit company name application to local SAMR bureau. Name must include: region + trade name + industry + entity type.

Business Licence Application

1–2 weeks

Submit full incorporation application to SAMR. SAMR issues a unified Business Licence.

Company Chops (Seals)

1–2 days

Carve official company chops — company seal, financial seal, legal representative seal, and invoice seal. Register with Public Security Bureau.

Tax Registration

1–2 weeks

Bank Account Opening

2–4 weeks

Open RMB basic account (required) and optional foreign currency account. Bank submits to PBoC for approval.

SAFE & Customs Registration

1–2 weeks

Register with State Administration of Foreign Exchange (SAFE) for foreign currency transactions and with Customs if engaging in import/export.

Costs & Fees

Government / License Fee	CNY 500+
Our Service Fee	USD 5,000+
Annual Renewal	USD 3,000+

Fees are indicative and may vary based on business activity, entity type, and additional approvals required. Contact us for a precise custom quote.

Get Custom Quote

Banking

China's banking sector is the world's largest by assets. The 'Big Four' state-owned banks dominate, but joint-stock commercial banks and foreign banks also serve corporate clients. Opening a bank account requires the physical Business Licence, company chops, and an in-person visit.

Account Opening Time

2–4 weeks (including PBoC approval)

Multi-Currency

Yes — multiple currencies supported

Recommended Banks

Bank of China (BOC)ICBCChina Construction Bank (CCB)China Merchants Bank (CMB)HSBC ChinaStandard Chartered China

Tax Overview

Corporate Tax

25% standard; 15% for HNTE; 20% for small low-profit enterprises (effective 5% on first CNY 3M)

Personal Income Tax

3–45% progressive (7 brackets); non-residents taxed on China-sourced income

VAT / Sales Tax

13% (goods, manufacturing); 9% (construction, transport); 6% (services, intangibles); 0% (exports)

Capital Gains Tax

Included in corporate income at 25%; 10% withholding on gains by non-residents

Withholding Tax

10% on dividends, interest, royalties, and capital gains (reduced by treaties)

Double Tax Treaties

110 countries

HNTE certification provides 15% rate for qualifying tech companies (valid 3 years, renewable). Small low-profit enterprises enjoy 5% effective rate on first CNY 3M. Transfer pricing strictly enforced.

Visa & Residency

Z Visa (Work Visa)

1 year, renewable (leads to Residence Permit)

For foreign employees working in China. Requires work permit. Points-based A/B/C classification.

M Visa (Business Visa)

30–90 days per entry (up to 10-year multi-entry)

For business visits — meetings, negotiations, trade fairs. Does not permit employment.

Investor/Entrepreneur (R Visa pathway)

Up to 5 years, renewable

High-talent visa for senior executives and highly skilled professionals meeting points criteria.

Family visa: AvailableProcessing: 1–3 months (work visa); 1–2 weeks (business visa)

Frequently Asked Questions

What is a WFOE and do I need a Chinese partner?

A WFOE allows 100% foreign ownership without a local partner. Since the Foreign Investment Law (2020), WFOEs are treated identically to domestic companies in most sectors. You only need a Chinese partner if your business is on the negative list.

How long does it really take to set up a company in China?

The entire process typically takes 4–8 weeks. Shanghai, Beijing, and Shenzhen FTZs can be faster (3–5 weeks). The bank account opening stage (requiring PBoC approval) is often the longest single step.

What is the 'negative list' for foreign investment?

China publishes an annual Negative List specifying restricted or prohibited industries for foreign investment. Sectors not on the list are fully open. The list has been shortened each year — the 2024 edition has fewer than 30 restricted categories.

Can I repatriate profits from China?

Yes. After paying CIT and completing annual audit, profits can be remitted abroad via the foreign exchange account. 10% withholding tax on dividends, reducible under treaty (e.g., 5% under China-Hong Kong DTA for 25%+ shareholding).

What are company chops and why are they important?

Company chops (seals) are legally binding in China — more so than signatures. The company seal, financial seal, legal representative seal, and invoice seal each serve specific functions. Losing or misusing a chop can have serious legal consequences.

What is the Golden Tax System?

The Golden Tax System is China's mandatory electronic VAT invoice system. All companies must register with the tax bureau and use approved devices. The system tracks all invoices in real-time.