Set up a company in China: WFOE, joint venture or representative office
To sell, manufacture or invoice in China you need the right vehicle. A representative office cannot sign contracts or issue invoices; a WFOE can, and it allows you to repatriate profits.
At UB China, with lawyers in Shanghai, we set up your company, keep it compliant and, when the time comes, close it.
Which vehicle is right for you
- Representative office (RO): quick and with no minimum capital, but only for liaison, promotion and market research; it cannot sign contracts, collect payments or issue invoices.
- WFOE (wholly foreign-owned enterprise): the most common form; full control, invoicing in RMB, and profits can be converted and remitted abroad.
- Joint venture: with a Chinese partner, mandatory in some restricted sectors; the shareholder agreement is key.
- Foreign-invested partnership: for funds and specific structures.
What you need to know
- The Foreign Investment Law, in force since 2020, grants national treatment except in sectors on the Negative List (prohibited or restricted).
- The Encouraged Industries Catalogue can bring tax benefits and simpler procedures.
- There is no statutory minimum capital, but authorities usually expect an amount suited to the business; since July 2024 capital must be paid up within 5 years.
- The legal representative has broad powers and may be personally liable; company seals bind the company.
- Corporate income tax of 25% (15% for high-tech enterprises), VAT of 13%, 9% or 6% depending on the activity, and 10% withholding tax on dividends, which a double tax treaty may reduce.
- Foreign currency accounts and offshore loans are registered with SAFE through the bank.
How we work
- Structure and tax planning: home country, intermediate holding companies and China.
- Incorporation: articles of association, registration, business licence, seals and bank accounts.
- Maintenance: corporate governance, employment contracts and annual compliance.
- Closure: ordinary liquidation or the simplified deregistration procedure when its requirements are met.
Frequently asked questions
Can I own 100% of the company?
Yes, through a WFOE, except in Negative List sectors.
Do I need to travel to China?
Not necessarily; much of the process can be done remotely with legalised powers of attorney.
How much capital do I need?
It depends on the business and the city; we estimate it in the initial assessment.
Can I take profits out of China?
Yes, once taxes are paid and with the documents the bank requires.
Doing business with China? Let us talk.