Company Formation in China

WFOE China registration usually means forming an ordinary limited liability company (LLC) wholly owned by foreign investors. The Foreign Investment Law repealed the old WFOE and joint venture laws on 1 January 2020, and the 2023 Company Law has governed these companies since 1 July 2024. One foreign shareholder is enough, no general minimum capital applies, and subscribed capital is paid within 5 years.

We form Chinese companies for foreign founders end to end. That covers Negative List screening, the choice of vehicle, apostilled documents, the sector licence check and the filing with the local Administration for Market Regulation (AMR). The seal, tax and foreign exchange registrations and a bank introduction follow. We quote each case individually.

Quick facts	Value
Local company form	有限责任公司 (limited liability company), equivalent of an LLC / private limited company
Foreign ownership	100% outside the Negative List caps and bans
Shareholders	1 to 50; one foreign individual or company is enough
Capital	No general minimum; paid within 5 years of establishment
Officers	No nationality or residency rule in the Company Law
Registry	Local AMR; public record on gsxt.gov.cn
Registration time	On the spot or within 3 working days, extendable by 3
Corporate income tax	25%; effective 5% for small low-profit enterprises until 31 December 2027
VAT	13%, 9%, 6% or 0%
Dividend tax	10% to foreign companies (5% for a qualifying Hong Kong parent); 20% to foreign individuals since 1 September 2026, subject to treaty relief
Annual report	1 January to 30 June

Why Form a Company in China

Doing business in China through your own company is open to foreigners: outside the 29-item Negative List, foreign investors get national treatment, the same terms as Chinese investors. Culture, finance and security approvals still apply where the list is silent.

Manufacturing is fully open. The 2024 list deleted the last two manufacturing items: publication printing and the processing of traditional Chinese medicine decoction pieces.

Entry is light. One foreign shareholder can form the company, and the Company Law sets no nationality or residency rule for officers. Since 7 November 2023, documents from Convention states other than India need an apostille instead of consular legalisation.

The trade-offs: capital is paid within 5 years and published, accounts are audited every year, and dividends to foreign individuals bear 20% from 1 September 2026, subject to treaty relief. For a regional base instead, compare Singapore, Vietnam and Malaysia.

Company Types Available in China

Since 1 January 2020, foreign-invested enterprises (FIEs) take the forms of the Company Law or the Partnership Enterprise Law (Foreign Investment Law Art. 31).

Limited Liability Company: the WFOE Vehicle

The limited liability company (有限责任公司) is the Chinese equivalent of an LLC and the practical form of a WFOE, with 1 to 50 shareholders (Company Law Art. 42). A sole shareholder is liable for company debts unless it proves the company's assets are separate from its own (Art. 23).

A board needs 3 or more directors (Art. 68), but a small LLC may have one director (Art. 75) and one supervisor, or none if all shareholders agree (Art. 83). No company secretary is required. The legal representative is the director or manager who executes company affairs (Art. 10).

What does WFOE mean?

WFOE stands for wholly foreign-owned enterprise, 外商独资企业 in Chinese. Since 1 January 2020 it has been a label, not a legal form. In law, a WFOE is a limited liability company, the Chinese equivalent of an LLC, or a joint stock company, owned entirely by foreign investors. Foreign founders use it when they want full control without a Chinese partner.

Joint Venture with a Chinese Partner

A joint venture is now an ordinary LLC or joint stock company with foreign and Chinese investors, Chinese individuals included (Foreign Investment Law Implementing Regulations Art. 3). The old 25% minimum foreign share was repealed in 2020. A joint venture is compulsory only where the Negative List requires one, as for medical institutions and market research.

Representative Office

A representative office (外国企业常驻代表机构) has no legal personality and may not carry out profit-making activity. It may only do market research, exhibition and publicity, and liaison for the parent's sales, services, sourcing and investment. It suits a market test, not trading.

Joint Stock Company

A joint stock company (股份有限公司) needs 1 to 200 promoters, more than half of them domiciled in China (Company Law Art. 92). Its shares are paid in full before incorporation (Art. 98).

Branch of a Foreign Company

A branch needs approval, a representative in China and allocated funds (Company Law Art. 244, 245).

Partnership

Foreign investors can also use a general, special general or limited partnership (合伙企业), except in sectors where the Negative List sets equity requirements. Individual businesses and sole proprietorship enterprises are closed to foreigners.

Foreign Ownership Rules in China

The Foreign Investment Law grants pre-establishment national treatment outside a negative list (Art. 4). Prohibited fields are closed and restricted fields carry conditions (Art. 28). The 2024 Negative List has 29 items, down from 31. A breach is serious. Prohibited investments are stopped and the shares or assets disposed of; restricted ones are corrected within a deadline (Art. 36).

Equity Caps and Prohibited Fields

The main caps:

• value-added telecoms: foreign share at most 50%, except e-commerce, domestic multi-party communications, store-and-forward and call centres (item 12);
• medical institutions and market research: joint venture only (items 22 and 15);
• airlines: Chinese-controlled, one foreign investor at most 25% (item 9).

Prohibited fields include rare earth mining, tobacco wholesale and retail, postal services, Chinese legal services, social surveys, compulsory education, and news, publishing, broadcasting and film.

Trading, Consulting and IT Businesses

A trading, consulting or IT WFOE can be 100% foreign-owned unless its business scope touches a listed item. Watch market research (JV only), social surveys (prohibited) and online services needing a value-added telecoms licence from MIIT (50% cap). Approval items in the scope need their approval (Company Law Art. 9).

Free Trade Zones, Hainan and Pilots

The 22 pilot free trade zones apply a shorter FTZ Negative List, whose 2021 edition has 27 items; MOFCOM's 2025 guide still cites 27 items. Since April 2024, an MIIT pilot has lifted the foreign cap on IDC, CDN, ISP and three other telecoms services in Beijing's services zone, Shanghai Lingang, Hainan and Shenzhen. Since September 2024, wholly foreign-owned hospitals are piloted in eight listed cities, Shenzhen among them, and all of Hainan.

How to Register a Company in China: Step by Step

To register a company in China, you file with the local Administration for Market Regulation (AMR), under SAMR, the State Administration for Market Regulation (Market Entity Registration Regulations Art. 5). As your formation agent, we prepare each filing and follow it to the licence. Files go in at the AMR window or through the online enterprise registration system, which SAMR links at wsdj.samr.gov.cn.

1. Screen the activity against the Negative List and the Market Access Negative List.
2. Authenticate the documents: notarise, then apostille or legalise.
3. Self-declare the name in the AMR name system.
4. Verify the applicants by real-name verification (Registration Regulations Art. 15).
5. File for establishment with the articles, domicile documents and beneficial owner information. The foreign investment initial report reaches MOFCOM, the Ministry of Commerce, through the same system (Foreign Investment Law Art. 34).
6. Receive the business licence, on the spot or within 3 working days of a complete file, plus 3 for complex cases (Registration Regulations Art. 19).
7. Complete the post-licence registrations below.

What is a Chinese business licence?

The licence's issue date is the company's date of establishment, and an electronic licence has the same effect as paper (Registration Regulations Art. 21, 22). It carries the unified social credit code, and there is no renewal.

Post-Licence Registrations

After the licence, the company:

• obtains its seal (the chop) through the public security system;
• confirms its tax information and obtains invoices;
• registers for social insurance and the housing provident fund;
• completes foreign exchange registration with its bank;
• opens the account that receives cash capital (Company Law Art. 49).

How to Check a Company in the China Business Registry

Every company appears in the National Enterprise Credit Information Publicity System, the public company register, with its capital data (Company Law Art. 40) and annual reports. Beneficial ownership filings are not public.

Required Documents

Foreign documents follow one rule. Company qualification and individual identity documents are notarised, then apostilled in Convention states or legalised by a Chinese consulate elsewhere, including India, which objected to China's accession. The establishment file (Registration Regulations Art. 9, 16) contains:

• the application form and the articles of association;
• the investor's qualification documents or passport;
• domicile documents for the registered address, the main administrative office (Company Law Art. 8);
• directors, supervisors, senior managers, subscribed capital and operating term;
• for an FIE, a recipient of legal documents;
• beneficial owners: anyone with 25% or more of equity, profits or votes, or actual control.

Timeline and What Our Package Covers

The AMR step is short. The calendar depends on notarisation and apostille abroad and any sector approval before filing, and on the post-licence steps after it. Our company formation time by country table compares markets.

Our package covers:

• Negative List screening and structure advice, including a Hong Kong holding option;
• a check of any sector licence the business scope needs;
• articles drafted to the 2023 Company Law;
• apostille or legalisation coordination;
• the AMR and beneficial owner filings;
• the post-licence registrations and a bank introduction;
• a first-year compliance calendar.

What determines the total is in the FAQ. Send an outline through our contact page for a quote.

Tax Overview for Chinese Companies

Corporate income tax is 25% (rate applicable in 2026). Small low-profit enterprises pay an effective 5%. They need taxable income of at most RMB 3 million, at most 300 employees, assets of at most RMB 50 million and a non-restricted sector. The relief runs until 31 December 2027. High and new technology enterprises pay 15%. Compare rates in our corporate tax rates by country table.

Does a WFOE in Hainan pay 15% tax?

Only if it qualifies. Hainan Free Trade Port and Qianhai apply 15% to qualifying companies with substance until 31 December 2027. The same rate runs for qualifying companies in the Western Region until 31 December 2030 and in Nansha until 31 December 2026.

VAT Under the 2026 VAT Law

The VAT Law and its Implementing Regulations took effect on 1 January 2026.

VAT rate	Applies to
13%	Most goods and imports, processing, leasing of movable property
9%	Transport, postal, basic telecoms, construction, real estate, land
6%	Other services and intangibles
0%	Exports and listed cross-border services

Small-scale taxpayers, with annual taxable sales of at most RMB 5 million, pay a simplified 3%, cut to 1% (not on real estate) until 31 December 2027. Above that, general taxpayer registration is compulsory. Voluntary registration cannot be reversed. Until the same date, small-scale taxpayers owe no VAT below RMB 100,000 of monthly or RMB 300,000 of quarterly sales.

Withholding Tax and Dividends

Dividends, interest, royalties and rents paid to non-resident companies bear 10% withholding tax. Withholding on profits reinvested directly in China is deferred. Until 31 December 2028, reinvestment in encouraged sectors held for 5 years earns a tax credit of 10%, or the lower treaty rate.

Since 1 September 2026, a foreign-invested enterprise withholds 20% individual income tax on dividends to foreign individual shareholders, subject to treaty relief, filing by the 15th of the next month. MOF/STA Announcement 2026 No. 27 repealed the 1994 exemption in Cai Shui Zi [1994] No. 20; agent pages calling these dividends tax-free are out of date.

Registered Capital for a WFOE in China: The Five-Year Rule

There is no general statutory minimum, but the deadline is fixed. Since 1 July 2024, LLC shareholders pay subscribed capital within 5 years of establishment (Art. 47 of the 2023 Company Law). Sector rules may still set minimums. Capital can be cash or valued, transferable assets such as intellectual property, land use rights or equity (Art. 48).

The rule has teeth. Directors who fail to call unpaid capital are liable (Art. 51). Unpaid equity can be forfeited after a grace period of at least 60 days (Art. 52). Compare markets in our minimum share capital by country table.

Companies Registered Before July 2024

State Council Decree No. 784 sets the transition. An LLC registered by 30 June 2024 whose remaining payment period runs more than 5 years beyond 1 July 2027 must cut it to 5 years by 30 June 2027. Full payment is then due by 30 June 2032 at the latest.

How do creditors recover money from a Chinese company?

Start with the capital. When a company cannot pay its debts, creditors can demand early payment of unpaid capital (Company Law Art. 54). A sole shareholder is liable for company debts unless it proves the company's assets are separate (Art. 23). The capital data is on gsxt.gov.cn.

The Hong Kong Holding Route

A Hong Kong company can sit between the foreign owner and the WFOE. The tax point is withholding. Dividends to a Hong Kong parent bear 5% instead of 10% if the parent is a company, holds at least 25% directly and is the beneficial owner. For a corporate owner, claims of a cut from 20% to 5% are wrong: the statutory withholding rate on dividends to a foreign company is 10%.

The route does not avoid the Negative List, because the Foreign Investment Law covers investment made "directly or indirectly" (Art. 2). We can form both companies as one project; see company formation in Hong Kong.

Visas and Work Permits

Working in China needs a work permit and a work-type residence permit; anything else is illegal employment (Exit and Entry Administration Law Art. 41, 43).

1. The employer applies online through the Management and Service System for Foreigners Working in China (12333.gov.cn). It files the apostilled or legalised degree, a no-criminal-record certificate, a health certificate, the contract and the passport.
2. The employee enters on a Z visa issued with the work permit Notification Letter.
3. For work over 30 days, the employee applies in person for a work-type residence permit within 30 days of entry. It is decided within 15 days and valid for 90 days to 5 years.

The employer registers foreign staff for social insurance within 30 days of the work permit application. Agreements with 12 countries, including Germany, Japan and Korea, can exempt their nationals from some contributions. Business visits are simpler. The M visa covers commercial trade, and ordinary passport holders of 50 countries may enter visa-free for up to 30 days, including for business. MOFCOM's Guide to Working and Living in China for Business Expatriates 2026 sets out the rules.

Banking for Chinese Companies

The account comes after the licence. Banks ask for the application form, the business licence and "certificates of relevant personnel". Cash capital goes into the company's own account (Company Law Art. 49). Foreign direct investment needs foreign exchange registration with the bank, on the FDI basic information form and the business licence. Pre-incorporation remittances also need the name self-declaration notice. See our bank account opening service.

Compliance and Reporting Obligations

Every Chinese company runs on this calendar.

Obligation	Where	Timing
Annual report	gsxt.gov.cn	1 January to 30 June
FIE annual investment report	Same system	Yearly from the year after establishment
Audited annual financial report	Accounting firm (Company Law Art. 208)	Every year
Provisional CIT returns	Tax authority	Within 15 days after each month or quarter
Annual CIT return with CPA audit certificate	Tax authority	Within 5 months of the year end
Beneficial owner changes	Registration system	Within 30 days

Late or false reports lead to the abnormal operations list. Legacy FIEs that missed the 31 December 2024 deadline to adopt Company Law governance have their other filings refused (Foreign Investment Law Implementing Regulations Art. 44). Our accounting and tax compliance service runs this calendar.

Beneficial ownership (PBOC/SAMR Order [2024] No. 3): an owner of 25% or more of equity, profits or votes, or a person with actual control, is filed (Art. 6). Filings are not public (Art. 12), inaccurate ones are fined (Art. 14), and the small-company exemption does not cover an FIE with a corporate parent (Art. 3).

Nominee Shareholders and Directors

We do not offer nominee shareholders or directors for China. The Foreign Investment Law covers investment made "directly or indirectly" (Art. 2). On that reading, shares held through a Chinese nominee are still foreign investment under the Negative List and Art. 36. Control through agreements makes a person a beneficial owner who must be filed (Beneficial Ownership Measures Art. 6). Registration is real-name, and applicants answer for the truth of the file (Registration Regulations Art. 15, 17). Holding listed shares on an agency basis in breach of law is prohibited (Company Law Art. 140). A controller who runs company affairs without a board seat owes directors' duties (Art. 180).

Forming a Chinese Company as a Non-Resident

A non-resident can own 100% of a Chinese LLC and hold every office in it. The Company Law sets no nationality or residency rule for officers, and sector exceptions such as airlines sit in the Negative List. See our foreign ownership and director requirements by country table.

A non-resident investor supplies notarised and apostilled (or legalised) company documents or passport. No national rule we know of requires a visit to register, but every applicant completes real-name verification, and Hainan has allowed fully online FIE registration since 30 June 2026. A residence permit does require a visit.

Tax follows the shareholder. A non-resident company bears 10% withholding on dividends (5% for a qualifying Hong Kong parent), and a foreign individual 20% from 1 September 2026, subject to treaty relief.

Frequently Asked Questions

How do I open a company in China as a foreigner?

Form a wholly foreign-owned LLC in seven steps. Screen the activity against the Negative List, authenticate documents, self-declare the name, verify applicants, file with the local AMR, receive the licence and complete the post-licence registrations. A complete file is registered on the spot or within 3 working days, plus 3 in complex cases.

Can a foreigner open a company in China?

Yes. A foreign individual or company can be the sole shareholder of a Chinese LLC (Company Law Art. 42), with no nationality or residency rule for its officers. Ownership can reach 100% wherever the Negative List sets no ban or cap. Market research still needs a joint venture, and so do medical institutions outside the pilot for wholly foreign-owned hospitals.

What is the minimum registered capital for a WFOE in China?

There is no general minimum. Since 1 July 2024, shareholders must pay the subscribed capital within 5 years of establishment (Company Law Art. 47). Sector rules can still set minimums, and the AMR may order obviously abnormal capital to be adjusted, so choose a figure the business can pay.

What determines the overall budget for a WFOE in China?

Five factors set the total: the vehicle, the business scope and any sector approval, the investors and their document route, staffing and work permits, and the accounting scope. Under the Company Law, annual financial reports are audited by an accounting firm in accordance with the law (Art. 208). We review your structure and quote each case individually.

Do I need to visit China to register a company?

No national rule we know of requires a visit, but every applicant completes real-name verification (Market Entity Registration Regulations Art. 15). Hainan has allowed fully online registration of foreign-invested enterprises since 30 June 2026, with foreigners verifying by UnionPay card and phone number. A residence permit, by contrast, is applied for in person.

What is the 6-year rule in China?

The six-year rule exempts the foreign-source income of non-domiciled residents. A foreigner resident in China, after 183 days in a tax year, keeps foreign-source income paid abroad exempt until six consecutive resident years, after filing. From the seventh consecutive resident year, worldwide income is taxable. Employment income is taxed at 3% to 45%.

Do foreigners need to register in China?

A foreigner who works in China needs a work permit and a work-type residence permit, or the job is illegal employment (Exit and Entry Administration Law Art. 41, 43). The residence permit is applied for in person within 30 days of entry. Short business trips need an M visa unless the visitor qualifies for 30-day visa-free entry.

Get Started: Form Your Chinese Company

Send us the activity, investor and city. We check the Negative List position, propose the vehicle and quote the full sequence, from apostille to bank introduction.

Call +48 2222 5 2222 or email info@companyformation24.com to start.

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Content prepared by Piotr Walter, In-house Counsel. Approved by Tomasz Bielski, Managing Director.