China remains one of the world’s most dynamic markets, offering vast consumer demand, advanced digital infrastructure, and government support for innovation. However, navigating its unique regulatory, cultural, and business landscape requires careful planning.
This guide walks you through the essential steps to legally and efficiently launch your business in China in 2025.
Step 1: Research and Plan Your Business Idea
Before entering the Chinese market, conduct thorough market research:
- Identify demand: Analyze consumer behavior, competition, and market trends in your industry.
- Understand regulations: Check if your business sector is on the Negative List for Foreign Investment (published by NDRC and MOFCOM). Sectors not on the list are generally open to foreign investment.
- Choose a business model: Decide between e-commerce, manufacturing, service provision, or franchising.
Step 2: Choose the Right Business Structure
Legal structure affects ownership, taxation, and compliance.Common Options:
| Structure | Description | Best For |
|---|---|---|
| Wholly Foreign-Owned Enterprise (WFOE) | 100% foreign-owned, full control | Tech, consulting, trading, manufacturing |
| Joint Venture (JV) | Partnership with a Chinese entity | Restricted industries, market entry with local partner |
| Representative Office (RO) | Can’t generate revenue; only for liaison/research | Market testing before full setup |
| Limited Liability Company (LLC) | For Chinese nationals or resident entrepreneurs | Local startups, small businesses |
Note: Most foreign entrepreneurs should opt for a WFOE due to greater control and alignment with China’s opening-up policies.
Step 3: Register Your Company – Use a Local Agent in Your Target City
Company Registration Procedure
- Preparation of registration application documents
- Performing name availability search and Application for approval of name
- Application for business licence
- Application for MOFCOM registration
- Carving of company seals and personal seal of the legal representative
- Setting up basic RMB bank account
- Handling foreign exchange registration
- Setting up foreign currency capital account.
- Tax Registration
Once you’ve finalized your business structure and company name, it’s time to officially register your business in China. While it’s possible to navigate the process yourself, using a professional agent or corporate service provider is highly recommended — especially for foreign entrepreneurs.
China’s company registration involves multiple government agencies, strict documentation requirements, and city-specific rules. A local agent acts as your guide, translator, and legal coordinator, ensuring everything is done correctly and efficiently.
| Benefit | Explanation |
|---|---|
| Local Expertise | Each city (e.g., Shanghai, Shenzhen, Hangzhou) has slight variations in procedures and requirements. An agent knows the local rules. |
| Faster Processing | Agents have established relationships with bureaus and can expedite name approval, license issuance, and seal carving. |
| Document Accuracy | They help prepare and translate all required documents (e.g., Articles of Association, notarized shareholder IDs) to avoid rejection. |
| Language Support | All official processes are in Chinese. Agents provide seamless English-to-Chinese translation. |
| Ongoing Support | Most agents also offer accounting, tax filing, and compliance services — perfect for startups. |
Step 4: Open a Corporate Bank Account
Which banks accept foreign-owned companies?
- Bank of China
- ICBC (Industrial and Commercial Bank of China)
- HSBC China
- China Merchants Bank
Key Requirements
- Valid business license
- Official company seals
- Identification of the legal representative
- Proof of office address
⚠️ Important: Banks have stringent KYC (Know Your Customer) procedures. The legal representative is required to be present in person. The approval process typically takes 1–3 weeks.
Step 5: Handle Tax and Accounting Compliance
- VAT: Standard rate is 13%, with reduced rates of 6% or 9% applicable to certain industries.
- Corporate Income Tax (CIT): Standard rate is 25%, while high-tech enterprises enjoy a reduced rate of 15%.
- Monthly/Quarterly Filings: Includes VAT, CIT, individual income tax, and social insurance.
- Engage a local accountant or accounting firm to ensure compliance with regulations.
⚠️ Note: Hiring a full-time accountant can cost 8,000+ RMB per month, which can be a significant expense for startups. Instead, consider outsourcing to a professional agency at a more affordable rate of 300–800 RMB per month.
Step 6: Obtain Industry-Specific Licences
Some sectors require additional permits:
- ICP Licence for online content/services
- Food & Drug Administration (NMPA) approval for health products
- MIIT approval for telecom or data services
- MOFCOM approval for certain foreign investments
Tips: Start early — some licences take months to process.
Step 7: Set Up Operations
- Hire staff: Use local recruitment platforms (e.g., Boss Zhipin, Liepin).
- Sign employment contracts compliant with China Labor Law.
- Rent office space or use co-working spaces (e.g., WeWork China).
- Build a local brand: Adapt to Chinese consumer preferences.
💬 Cultural Insight: Build guanxi (relationships). Trust matters more than contracts in Chinese business culture.