How to Start a Company in China in 2025: A Complete Guide

Looking to start a company in China? You’ll be tapping into one of the world’s biggest opportunities.

In the first half of 2025, China’s GDP reached approximately RMB 66.1 trillion (around USD 9.2 trillion), growing 5.3% year on year. Its urban middle class now exceeds 500 million people – more than the entire population of the United States.

But a market this large comes with complexity. Setting up a company in China means navigating detailed licensing requirements, language barriers, and a business culture built on relationships.

This guide outlines the 10 steps to launching a company in mainland China and shows why starting in Hong Kong can be a better alternative.

If you're planning to do business in China as a foreign investor, you’ll need to select a legal business structure that aligns with your goals and the type of business activities you plan to carry out.

Most foreign-owned businesses fall under a category known as a Foreign-Invested Enterprise (FIE). This is a general term for companies in which a foreign party holds full or partial ownership. Within this category, there are several structures, each with its own level of control, liability, and business scope.

Here are the main legal structures available to foreign investors in China:

Careful consideration should be given to where you start your business in China, as it can directly affect your setup timeline, compliance burden, and access to skilled local talent.

China operates 21 Free Trade Zones (FTZs), created to attract foreign investment through simplified customs, tax incentives, and streamlined regulations.

But they’re not all alike:

• Established FTZs (e.g. Shanghai) are highly competitive but offer better infrastructure and investor services.
• Newer FTZs may have fewer tax benefits but offer lower costs and fewer restrictions, making them suitable for early-stage or service-based businesses.

The right location depends on your industry and goals. Tech firms may thrive in Shenzhen or Hangzhou, while trading companies benefit from port cities like Guangzhou.

Popular locations for foreign businesses in China include:

While China no longer enforces a statutory minimum registered capital (MRC) for most businesses, you still need to define a capital amount when forming your company. This amount acts as a financial commitment and may influence how authorities assess your company’s credibility and operational capacity.

The 2014 revision of China’s Company Law removed fixed capital thresholds for most entity types, except for regulated sectors like finance, education, insurance, and securities. That said, many local authorities and banks still expect to see a realistic amount of capital based on your planned activities.

As a rule of thumb, here’s what most businesses use:

• RMB 30,000 for multi-shareholder limited liability companies
• RMB 100,000 for single-member limited liability companies
• RMB 500,000 for FICE entities (to meet VAT requirements)

China follows a subscribed capital model, meaning you don’t need to pay the full capital upfront. Under Article 47 of China’s revised Company Law, shareholders must fully pay their subscribed capital within five years of incorporation.

Before applying for your business license in China, you’ll need to prepare a set of key documents and company details. These will be submitted to the local Administration for Market Regulation (AMR) and other relevant authorities.

Here’s what you’ll typically need:

• Approved Company Name: Register your company name through AMR’s online system. Most businesses must have a Chinese name, unless you're a globally recognised brand (e.g. Apple, Nike).
• List of Shareholders: Identify all shareholders, including their ownership percentages. All listed individuals must be legally eligible to hold shares in China.
• Organisational Structure: Provide a breakdown of your company’s structure (e.g. board of directors, general manager, legal representative,  supervisors)
• Identification Documents: Submit passports or national IDs for all shareholders, legal representatives, finance managers, and designated contact persons.
• Articles of Association: This internal document outlines your company’s business scope, management rules, and profit distribution.
• Registered Capital and Total Investment: Declare your committed registered capital and any planned third-party investment (e.g. loans or external funding).
• Business Address: Provide a local Chinese address with a contact phone and email. Proof of address may also be required (e.g. lease or utility bill).
• Business Plan: Submit a comprehensive plan covering your objectives, strategies, feasibility analysis, and operating budget. Authorities will use this to assess your company’s financial viability.
• Parent Company Documents (if applicable): If your business is a subsidiary, you must provide the parent company’s business license or registration certificate, translated into Simplified Chinese and notarised.

For foreign shareholders, legalising documents is critical because China is not part of the Apostille Convention. You must notarise key documents, then have them legalised by the foreign affairs authority in your home country and finally by the Chinese embassy/consulate. 

So start this process as early as you can; it often takes several weeks.

Once you’ve decided on your company’s structure and internal setup, it’s time to finalise the information and prepare for registration.

You’ll submit these details through the online pre-approval system managed by your local AMR. This includes uploading scanned IDs, your office lease agreement, and any other supporting documents. The AMR will review the submission and may request clarification or revisions before moving forward.

After pre-approval, you’ll print the official registration forms, collect original signatures, and prepare for the formal application in the next step.

Once your documents are ready, the next step is to register your business entity with the AMR.

You can apply for a "5-in-1" business licence, which combines multiple registrations into one streamlined certificate. This licence allows your company to legally operate, invoice clients, and hire employees.

The 5-in-1 licence includes:

• Business Licence: Confirms company registration and authorises general business activities.
• Organisation Code Certificate: Used for internal tracking by government departments.
• Tax Registration: Registers your company with the local tax bureau for VAT, CIT, and other filings.
• Social Security Registration Certificate: Required for hiring local employees and contributing to pension, insurance, and housing funds.
• Statistical Registration Certificate: Registers your company with the national statistics bureau for mandatory reporting.

Your business licence will also include a Unified Social Credit Code – a unique 18-digit identifier that replaces older standalone codes, including the original organisation code and taxpayer ID. This code is used across all administrative systems, covering everything from tax filings to contract registration and government reporting.

In China, businesses are required to obtain an official seal, commonly known as a company chop. This round stamp typically features your company’s registered Chinese name and serves as a legally binding signature on contracts, bank documents, and government filings.

Without a company chop, your business cannot enter into enforceable agreements in China.

To obtain your chop, you must register with the Public Security Bureau in your local district. This step can only be completed after your business licence has been issued by the local AMR.

Once your company is fully registered, the next step is to open the necessary bank accounts to handle capital injection and daily operations.

You’ll need to open a foreign capital account to receive your registered capital in foreign currency. This account is used to inject foreign direct investment into the company. Once received, the funds can then be converted into RMB and transferred into a local RMB account, which will be used for daily transactions, payroll, and tax payments.

Opening these accounts typically requires submitting your business licence, Articles of Association, company chops, and office lease. In many cases, the legal representative must be physically present at the bank. Processing times can range from a few days to several weeks, depending on the bank and location.

If you’re working with overseas clients or suppliers, neobanks can offer faster and simpler onboarding with better multi-currency support. However, they cannot fully replace a domestic bank account, which is still mandatory for compliance-related activities such as tax filings and social contributions.

Within 30 days of incorporation, your company must complete all relevant tax and compliance registrations.

This includes:

• National and local tax registration, including selecting your VAT (value added tax) status. Most businesses choose between general VAT taxpayer status (which allows you to deduct input VAT) or small-scale taxpayer status (with simplified reporting).
• VAT (fapiao) registration, to enable your company to issue official tax invoices required for B2B transactions.
• Social security and housing fund registration, which covers mandatory contributions for Chinese employees across pensions, medical insurance, unemployment, and housing funds.
• Foreign Experts Bureau registration, if you plan to hire expatriate staff requiring work permits.

Tax rates vary depending on your business structure. As a general reference, corporate income tax is 25%, VAT is typically 13% for goods and 6% for services, and withholding tax on dividends, interest, and royalties paid abroad is usually around 10%.

After incorporation, certain industries in China require sector-specific approvals before starting operations. For example, businesses involved in food and beverage, medical devices, education, or cross-border trade must obtain relevant permits from regulators and register with bodies such as the State Administration for Foreign Exchange (SAFE) or Chinese Customs. It’s essential to identify these licensing requirements early, as delays can disrupt your go-to-market timeline.

Also, remember to protect your brand by registering your trademarks and patents. China follows a first-to-file intellectual property system, meaning legal ownership is granted to whoever registers the mark first, not who used it first. Even if your brand is protected overseas, you won’t have legal standing in China without local registration.

To secure your IP rights, submit applications to the China National Intellectual Property Administration (CNIPA), either online or through an authorised local agent.

By now, you know that launching a company in China requires time, resources, and a deep understanding of local compliance. From navigating labour laws to securing the right licenses, the process can be frustrating, especially for first-time foreign founders.

That’s why many entrepreneurs choose Hong Kong. It’s one of the best countries to start a business as a foreigner, offering proximity to China with fewer barriers and a faster setup.

Here’s what makes Hong Kong a compelling alternative:

• Faster setup: Incorporating in Hong Kong typically takes 3 to 5 working days, while company registration in China can take 3 to 8 weeks.
• Low corporate income tax: Hong Kong offers a two-tier profits tax system at 8.25% and 16.5%, compared to China’s flat 25% corporate tax.
• 100% foreign ownership: Foreign entrepreneurs can own 100% of their company across all industries, whereas in China, restrictions still apply in certain sectors.
• No minimum capital requirements: Unlike many Chinese entities, Hong Kong companies can be formed without paid-up capital.
• English-language business environment: English is one of Hong Kong’s official languages, used in contracts, government filings, and everyday business.
• Regional hub advantage: Tap into Asia-Pacific and China markets while operating under Hong Kong’s business-friendly rules.

If you’re considering the Hong Kong route, Statrys makes it easy to get started. We offer an all-in-one incorporation package that includes company registration, a company secretary, a registered address, and the option to apply for an in-house multi-currency business account, all online and typically completed in 5 business days (subject to approval).

Doing business in China is not simple, but through Hong Kong and with a partner like Statrys, it’s absolutely possible.