How Foreign Investors Can Set Up a Company in China Entirely Online

Picture this: a Singapore-based investor decides to establish a company in China. A year ago, this would have triggered weeks of back-and-forth: notarized paper documents, international couriers, in-person submissions, and bureaucratic queues. Today, the same investor can complete the entire registration process from their laptop, without crossing a single border.

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This is not hypothetical. In early 2026, Shanghai launched China’s first fully online foreign-invested enterprise (FIE) registration service based on cross-border digital identity authentication, a landmark in China’s ongoing effort to improve its business environment and lower barriers to foreign investment.

Developed jointly by the Shanghai Municipal Market Administration for Market Regulation (Shanghai AMR) and the Shanghai Municipal Data Bureau, in partnership with Singapore’s Infocomm Media Development Authority (IMDA) and the Singapore Academy of Law (SAL), the new system enables Singapore-based investors to register a company in China entirely online, with no paper documents, no physical notarization, and no in-person visits required.

For foreign investors watching China’s business environment, this is a development worth understanding.

The problem: Why foreign investors couldn’t go fully digital – until now

For years, China has offered domestic companies the convenience of fully online business registration. FIEs, however, faced a significant structural barrier: the lack of a cross-border digital identity verification mechanism.

Without a way to verify foreign identities online, authorities required investors to submit physical notarized documents, such as certified copies of incorporation certificates, signatures on paper, apostilles, and other bureaucratic artifacts. These documents had to be physically mailed across borders, reviewed offline, and processed through multiple rounds of in-person approval. The result was a process that was expensive, slow, and highly susceptible to delays from postal systems and administrative backlogs.

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The stark contrast between the experiences of a domestic Chinese investor and a foreign investor was a genuine deterrent, particularly for smaller companies or first-time entrants to the Chinese market.

The new system eliminates all these traditional friction points simultaneously, replacing them with a digital trust infrastructure built on blockchain technology, verifiable credentials, and distributed digital identity (more on how this works in later sections).

How the new system works: Six steps to a digital business license

The new registration process is built around a cross-border digital trust platform jointly established by Shanghai and Singapore. It uses three foundational technologies: distributed digital identity (DDI), verifiable credentials (VC), and blockchain to ensure data integrity, authenticity, and tamper-resistance throughout the process.

From the investor’s perspective, the end-to-end flow works as follows:

• Step 1 – Cross-border digital identity verification: The Singapore-based investor authenticates their identity through their authorized signatory using Singapore’s established digital identity infrastructure. This creates a trusted digital identity that is recognized across the Shanghai-Singapore digital bridge.
• Step 2 – Fully online registration initiation: The investor accesses Shanghai’s enterprise registration platform and initiates the registration process entirely online. There is no need to enter China or visit any government office.
• Step 3 – China-Singapore mutual recognition: The cross-border digital trust platform validates and recognizes the investor’s Singapore-issued credentials, removing the need for physical notarization or apostille. This mutual recognition framework is the technical and legal foundation of the entire system.
• Step 4 – Identity authenticity verification: The platform conducts real-time verification of the entity’s credentials using blockchain-backed records, ensuring the data is authentic, unaltered, and legally valid. This replaces the manual review process that was previously required for in-person handling.
• Step 5 – Electronic signature application: All documents requiring signatures are handled through legally binding e-signatures, applied online by the authorized signatory. No wet signatures or original documents are required at any point.
• Step 6 – Digital business license issuance: Upon successful completion, a legally valid business license is issued digitally. The investor achieves what Shanghai officials describe as “zero-contact approval” and “zero-visit establishment”, which means the company is registered without the investor ever needing to be physically present.

The entire process represents a complete end-to-end digital workflow, from identity verification to license issuance, with no offline steps.

From CIIE exhibitor to Shanghai investor: The first company to use the system

The first beneficiary of this new service is Chuangxing Food (Shanghai) Co., Ltd., registered in Qingpu District, Shanghai. Its Singapore-based investor, IFBH Pte. Ltd., completed the entire registration process online, successfully obtaining a Chinese business license without any of the traditional paper-based requirements.

What makes this case particularly notable is the investor’s journey: IFBH was previously a participant in the China International Import Expo (CIIE) as an exhibitor. Through the new digital registration process, they transitioned from exhibitor to investor, establishing a legal business presence in Shanghai entirely through digital channels.

An IFBH executive noted that the new service offered a more flexible and convenient path to establishing a presence in China, and that the experience of registering a company in Shanghai had strengthened their confidence in the city’s business environment.

This case is significant because it serves as a signal that the system works, it is in production, and real companies are already using it.

Outlook: What this means for the broader investment environment

To understand why this matters beyond the registration process itself, it is worth placing this development in a broader context.

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China’s actual use of foreign capital declined 9.5 percent year-on-year in 2025, continuing a multi-year slump. Against this backdrop, administrative friction, the kind that makes it harder to enter the market than to stay out, has been consistently cited as a deterrent by foreign investors, particularly in the services and high-tech sectors. Reducing that friction is a stated priority for Chinese policymakers at both the national and municipal levels.

The Shanghai cross-border digital registration system is a concrete, operational response to that challenge. It is not a policy announcement, but a live service. Several aspects of its design and rollout are worth noting for investors:

• Scalability by design: It is designed to be replicated. Shanghai officials have explicitly stated that this model is intended to be a replicable, scalable template for cross-border digital identity cooperation with other countries and regions. Singapore was chosen as the first partner because of its mature digital infrastructure and high level of investment activity with Shanghai, but it is positioned as the first of many.
• International standards alignment: It aligns with high-standard international rules. The system is described by Shanghai authorities as part of China’s effort to align with high-standard international trade and digital economy frameworks, including the Digital Economy Partnership Agreement (DEPA). This positions it not as a bilateral carve-out, but as part of a broader compliance and openness agenda.
• Lowering barriers for smaller investors: It targets a real gap for SMEs and first-time entrants. The old system’s barriers, from cost and complexity to physical requirements, were disproportionately felt by smaller companies and investors with limited China-based support. A fully digital, low-friction registration process changes the calculus for this segment of potential investors.
• Sectoral relevance: High-tech and services sectors stand to benefit most. These are precisely the sectors where foreign investment into China has remained most resilient and where investors are most likely to be sophisticated digital economy actors who would benefit from a streamlined digital registration experience.

Shanghai has indicated it will continue to expand its cross-border digital trust network, with the goal of providing convenient, secure digital government services to global investors and further improving the city’s attractiveness as an international investment destination.

Conclusion: A Tangible step toward a more accessible market

For foreign investors evaluating China as a destination, the gap between policy signals and operational reality has long been a source of frustration. This development is different: it is not a white paper, a pilot announcement, or a bilateral agreement in principle. It is a live government service that has already issued its first business license.

The Shanghai cross-border digital identity registration system represents a meaningful reduction in the administrative cost of entering the Chinese market and, importantly, it is explicitly designed to expand. Investors are advised to understand how it works and position themselves to use it as it scales to additional jurisdictions.

In short, the barriers to establishing a FIE in China are getting lower, and digital infrastructure is the mechanism by which they are being dismantled.

Dezan Shira & Associates advises on company establishment and legal incorporation across multiple Asian jurisdictions. Combined with our tax planning expertise, we offer a fully integrated corporate establishment solution.

Vivian Mao

Partner

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