China in 2025 continues to be one of the world’s most dynamic markets, offering vast opportunities for global businesses across manufacturing, technology, e-commerce, and finance. Its large consumer base, advanced infrastructure, and integration into global supply chains make it a highly attractive destination for companies looking to expand in Asia.
Cities like Shanghai, Beijing, Shenzhen, and Guangzhou are thriving business hubs, while emerging regions such as Chengdu and Hangzhou offer access to growing innovation ecosystems. Foreign companies planning to register a business in China benefit from a rapidly evolving market but must also navigate a complex regulatory environment with strict compliance requirements.
This guide covers market entry options, business structures, registration steps, compliance obligations, required documentation, costs, challenges, and Employer of Record (EOR) alternatives for businesses expanding into China.
Table of Contents
- Exploring Your Market Entry Options in China
- Business Structures You Can Choose From
- Comparing Business Structure Options
- How to Choose the Right Business Model for Your Operations
- Step-by-Step Guide to Company Registration in China
- Key Documents Required to Register Your Chinese Company
- Post-Incorporation Essentials You Shouldn’t Ignore in China
- Additional Business Licenses and Registrations You Might Need in China
- Timeframe to Set Up a Business in China
- What Does It Cost to Incorporate a Company in China?
- Obstacles Global Founders May Face While Setting Up in China
- Incorporating as a Foreign-Owned Company: A Special Path
- Employer of Record: A Simpler Way to Hire in China Without Incorporation
- Why Asanify is the Ideal Partner for Global Companies Entering China
- Summary & Final Takeaways
- FAQs
Exploring Your Market Entry Options in China
Foreign companies entering China can choose between two primary approaches:
Incorporating a Local Business Entity
Setting up a company in China involves registration with the State Administration for Market Regulation (SAMR), obtaining tax registrations, and adhering to labor, social security, and industry-specific requirements. This route is best for businesses with long-term plans, a need for local operations, or plans to hire a full team in China.
Hiring Through an Employer of Record (EOR)
For businesses seeking a faster and less complex market entry, an Employer of Record allows you to hire employees in China without establishing a legal entity. The EOR is the legal employer on paper, managing contracts, payroll, taxes, and social contributions, while your company maintains operational control. This approach is ideal for market testing, small teams, or pilot projects.
Business Structures You Can Choose From
China offers several business entity types for foreign investors, each with different requirements for capital, liability, and compliance:
- Wholly Foreign-Owned Enterprise (WFOE) – Fully foreign-owned, offering operational control and profit repatriation.
- Joint Venture (JV) – Shared ownership between foreign and Chinese partners; required in some restricted industries.
- Representative Office (RO) – For market research and liaison purposes; cannot generate revenue.
- Foreign-Invested Partnership (FIP) – Flexible structure with shared liability; suitable for service or consulting firms.
- Branch Office – Extension of a foreign company with limited scope and parent company liability.
Comparing Business Structure Options
| Structure | Ownership | Liability | Profit Repatriation | Best For |
| WFOE | 100% foreign | Limited | Full | Full operational control |
| JV | Shared | Limited | Shared by agreement | Restricted or regulated industries |
| Representative Office | 100% foreign | Parent liable | None | Market research and liaison only |
| FIP | Foreign or mixed | Shared | Flexible | Consulting or service businesses |
| Branch Office | Parent company | Parent liable | Via parent | Short-term or limited operations |
How to Choose the Right Business Model for Your Operations
The right structure depends on your goals, liability tolerance, and industry:
- WFOEs are best for companies seeking complete control, profit repatriation, and long-term market presence.
- JVs are necessary for industries where full foreign ownership is restricted, like telecom or media.
- Representative offices are ideal for early market research or partner coordination without commercial activity.
- EOR solutions are best for testing the market, short-term hiring, or building small teams quickly.
Step-by-Step Guide to Company Registration in China
- Determine your business scope and select the appropriate entity type.
- Reserve a unique company name with the local branch of SAMR.
- Prepare Articles of Association and other required incorporation documents.
- Submit the incorporation application to SAMR and receive the business license.
- Register with the Public Security Bureau for company seals (chops).
- Open a Chinese corporate bank account for capital injection and operations.
- Register for tax with the State Taxation Administration (STA) and obtain VAT status if required.
- Register with social security and housing funds for employees.
- Complete any industry-specific approvals or licenses.
Suggested Read: Understanding Labour Laws in China: Contracts, and Termination Rules
Key Documents Required to Register Your Chinese Company
- Passports of all foreign shareholders and directors
- Proof of residential address for shareholders and directors
- Articles of Association and incorporation forms
- Lease agreement for the registered office in China
- Company name pre-approval from SAMR
- Bank reference letter for foreign investors
- UBO (Ultimate Beneficial Owner) declaration for compliance
Post-Incorporation Essentials You Shouldn’t Ignore in China
After incorporation, ongoing compliance is crucial for smooth operations:
- File monthly and quarterly tax returns with the State Taxation Administration
- Maintain proper accounting and annual audit reports
- Comply with labor laws, payroll tax, and social security contributions
- Update and maintain company chops (official seals) for all transactions
- Submit annual filings to SAMR to remain in good standing
Additional Business Licenses and Registrations You Might Need in China
Certain sectors require additional permits or registrations:
- E-commerce and internet business licenses
- Food, pharmaceutical, or medical device approvals
- Import/export licenses and customs registration
- Environmental and safety permits for manufacturing operations
Timeframe to Set Up a Business in China
| Step | Estimated Duration |
| Reserve company name | 5–10 business days |
| Prepare and notarize incorporation documents | 5–10 business days |
| Register with SAMR and obtain license | 10–15 business days |
| Open bank account and complete tax registration | 10–15 business days |
| Social security and other registrations | 5–10 business days |
| Total Time to Register | 35–60 business days |
Complex approvals or foreign document authentication can extend timelines.
What Does It Cost to Incorporate a Company in China?
The cost varies depending on the entity type and industry:
- Government registration and license fees: $300–$800
- Notary, legal, and translation services: $1,000–$3,000
- Office lease (mandatory for WFOE and JV) varies by city
- Accounting and compliance services: $1,500–$4,000 annually
- Additional licenses or sector approvals may add extra costs
Overall, initial setup typically ranges from $3,000 to $8,000 excluding capital investment.
Obstacles Global Founders May Face While Setting Up in China
- Complex regulatory environment with multiple government approvals
- Mandatory use of company seals for official transactions
- Capital injection and foreign exchange restrictions for WFOEs
- Industry-specific foreign ownership limitations
- Language barriers and requirement for notarized and translated documents
Incorporating as a Foreign-Owned Company: A Special Path
Foreign investors can operate in China through different routes:
- Wholly Foreign-Owned Enterprise (WFOE) – Full control and profit repatriation
- Joint Venture (JV) – Required for certain restricted industries
- Representative Office (RO) – No revenue generation but useful for liaison or research
Most industries now allow 100% foreign ownership under the Foreign Investment Law, but sensitive sectors like media, telecom, and education have restrictions and may require government approval.
Employer of Record: A Simpler Way to Hire in China Without Incorporation
Entering the Chinese market does not always require establishing a legal entity. For many global companies, especially those exploring market potential or running pilot projects, an Employer of Record (EOR) offers a fast and fully compliant way to hire employees in China without the cost and time involved in incorporation.
From a legal standpoint, the EOR is the official employer for your Chinese workforce. It manages employment contracts, payroll processing, social insurance, housing fund contributions, and tax withholdings according to Chinese labor regulations. Meanwhile, your company retains complete control over employees’ daily responsibilities, workflows, and performance management.
This model is ideal for:
- Testing the Chinese market before committing to a Wholly Foreign-Owned Enterprise (WFOE)
- Running short-term or project-based teams in sales, sourcing, or operations
- Hiring remote Chinese employees to support global functions like development or customer service
- Rapidly expanding into Asia without navigating complex company formation processes
Using an EOR also shields foreign businesses from administrative and compliance challenges such as:
- Drafting labor contracts in line with Chinese employment law
- Registering for mandatory social insurance and housing funds
- Managing payroll tax filings and fapiao (invoice) compliance
- Providing statutory employee benefits including paid leave, pensions, and health insurance
By leveraging an EOR, businesses reduce risks associated with non-compliance, worker misclassification, and labor disputes, while achieving quick, cost-efficient market entry.
Suggested Read: Employer of Record China: A Comprehensive Guide
Why Asanify is the Ideal Partner for Global Companies Entering China
Asanify provides complete support for global businesses entering China, offering both full company incorporation and Employer of Record (EOR) services. For companies with long-term growth plans, we guide you through the full registration process:
- Choosing the right entity type (WFOE, Joint Venture, or Representative Office)
- Drafting and notarizing Articles of Association and incorporation documents
- Registering with the State Administration for Market Regulation (SAMR)
- Obtaining tax registration and setting up local bank accounts
- Managing post-incorporation compliance, payroll, and statutory reporting
If you are not ready to establish a legal entity, our EOR solution allows you to hire employees in China within just a few days. Asanify handles all employment contracts, processing payroll, social insurance, housing fund contributions, and compliance requirements, ensuring your team operates legally without administrative burdens.
Asanify has successfully helped clients across Asia, Europe, the US, and the Middle East enter the Chinese market quickly and without risk. Whether you are a startup testing product-market fit or a multinational deploying a regional team, we make your China expansion smooth and fully compliant.
Summary & Final Takeaways
China in 2025 offers massive opportunities for global companies, but choosing the right market entry strategy is crucial. Businesses generally have two main options: incorporating a local entity like a WFOE or Joint Venture or hiring through an Employer of Record (EOR).
If your goal is to establish a long-term footprint, gain full operational control, and repatriate profits, setting up a registered Chinese entity is the right choice. Conversely, if your focus is rapid market entry, testing operations, or creating a small local team without the complexities of incorporation, an EOR allows you to start quickly while staying fully compliant with Chinese labor and tax regulations.
FAQs
It typically takes 35–60 business days, depending on approvals and documentation.
Yes, through a Wholly Foreign-Owned Enterprise (WFOE) in most industries.
It varies by region and sector, but WFOEs generally require $15,000–$30,000.
Not always, but opening a bank account and notarizing documents often requires local representation.
Yes, through an Employer of Record (EOR) for fully compliant hiring.
Corporate income tax (25%), VAT (6–13%), and social security contributions.
Yes, sectors like media, telecom, and education may require JVs or government approval.
Passports of shareholders, Articles of Association, lease agreement, and bank reference letters.
Complex regulations, multi-step approvals, capital requirements, and language barriers.
Using an Employer of Record (EOR) enables immediate hiring without full incorporation.
Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant or Labour Law expert for specific guidance.
