How to Set Up a Foreign-Owned Company in China: A Practical Guide to WFOE Registration and Compliance

As China continues to open its market to global investors, more foreign entrepreneurs and companies are seeking to establish wholly-owned or joint-venture entities in the country. While the opportunity is vast, navigating the regulatory environment—including registration, tax, foreign exchange, and banking—can be complex.

This article outlines the end-to-end process of setting up a WFOE (Wholly Foreign-Owned Enterprise) in China, along with compliance considerations and how we support clients throughout the journey.

Common Entity Types for Foreign Investors

TypeFull NameBest ForWFOEWholly Foreign-Owned Enterprise100% foreign-owned companies in trade, services, or techJVJoint VentureBusinesses seeking Chinese local partners or required by policyRORepresentative OfficeMarket research, sourcing, brand visibility (non-operating entity)

Standard Process for Registering a WFOE

1. Company Name Pre-approval
   Submit 3–5 proposed names with shareholder details, business scope, and capital.

2. MOFCOM Filing / Information Reporting
   Replaces the old foreign investment approval. Requires Articles of Association, ID documents, etc.

3. Business License Issuance
   Get the official license and unique Social Credit Code from the Administration for Market Regulation (AMR).

4. Company Chop Registration
   Includes company stamp, financial seal, legal representative seal, invoice stamp, etc.

5. Bank Account Opening
   Foreign shareholders must often undergo face-to-face KYC. Process is document-heavy and may take 2–6 weeks.

6. Tax Registration and Invoice System Setup
   Involves tax classification, invoice system activation, and potential special VAT registration.

7. SAFE Registration & Capital Account Setup
   Required for capital injection and foreign exchange settlement.

Key Considerations and Tips

• Registered Address: Some cities don’t allow virtual or shared addresses. Use a compliant commercial space.

• Capital Requirement: No hard minimum, but must match business scope. It affects FX remittance and tax classification.

• Directors & Legal Rep: Can be non-Chinese citizens. Some steps require physical presence or document notarization.

• Banking Challenges: Banks expect detailed business proof and legal document review for foreign UBOs.

• Regulatory Restrictions: Certain sectors (education, internet, healthcare) may require additional licenses or JV structure.

How We Can Help

We offer hands-on support for setting up foreign-invested entities in China:

✔ Entity type consultation (WFOE vs JV vs RO)
✔ Full process registration and licensing
✔ Coordination for bank account setup and document preparation
✔ SAFE registration and compliant capital injection
✔ Tax filing, e-invoice system, and local reporting setup
✔ Ongoing compliance and operational advisory for China market

📞 Contact us to receive a customized WFOE Setup Starter Kit or schedule a one-on-one consultation.
We tailor solutions based on your industry, origin country, and China expansion plans.