Wholly Foreign-Owned Enterprises in China: The Complete 2026 Setup Guide 

Setting up a WFOE in China involves navigating a series of regulatory steps, from pre-registration checks and company registration to post-registration procedures such as tax registration, bank account opening, and social insurance enrollment. This guide covers each stage of the process, including the latest changes introduced by the 2024 Company Law and the 2026 registration reforms.

Establishing a wholly-owned foreign enterprise (WFOE) in China follows broadly the same process as for domestic companies, although certain requirements differ to account for the foreign ownership, including additional documentation requirements for foreign investors and the mandatory filing of a foreign investment information report with the Ministry of Commerce (MOFCOM). 

Setting up a WFOE in China typically takes between three and six months, from preparing and authenticating incorporation documents to completing post-registration procedures, such as opening bank accounts and registering with the tax, customs, and social insurance authorities. Timelines vary depending on the complexity of the company structure, the business scope, and the efficiency of the local authorities. 

See also: Is WFOE Still the Right Corporate Structure for China in 2026?

Pre-registration procedures 

Whereas previously a variety of steps, such as name reservation and special license approval, had to be completed before applying for a business license, since the introduction of the Regulations of the People’s Republic of China on the Registration and Administration of Market Entities in 2022, these procedures are handled at the same time. 

However, investors should still ensure that their intended business operations are eligible for 100 percent foreign ownership in China before proceeding with the application. China restricts foreign ownership in certain sectors and requires approval for private investment in others, and company registrations for a business scope that violates these provisions will be rejected. 

For business activities that require a license, this license must be obtained before applying for the business registration, as the license documents have to be submitted along with the other application materials. 

To determine whether foreign investment is restricted in a given sector or business activity, investors should consult the following documents: 

• The Foreign Investment Access Negative List (2024 Edition): places foreign ownership caps on 29 different business activities across 11 sectors.
• The Market Access Negative List (2025 Edition): explicitly prohibits private investment in six business activities and restricts private investment in 100 different business activities across 21 categories. 

Operating licenses (where applicable) 

For business operations that require a license, companies must apply for a license from the relevant authorities before proceeding with the business registration. The authority in question will depend on the sector in which the company is operating, and includes the General Administration of Customs (China Customs), the State Administration of Market Regulation, the Ministry of Industry and Information Technology, and other industry-specific regulators. 

Sectors that require special license approval include food production, business operations, import and export, printing and reproduction services, production, transport, and handling of nuclear and radioactive materials, manufacture and import of medical devices or cosmetics, and the manufacture, import, and operation of telecommunications and radio transmission equipment, among many others. 

Place of business 

Companies must have an address in China as their place of business before they can carry out the business registration procedures. Companies can only register one principal place of business. 

The address must be a commercial property that is approved by SAMR for business use. Proof of address can be: 

1. Real estate ownership certificate (if the WFOE owns its premises)
2. Lease agreement plus real estate ownership certificate (if leasing)
3. Filed/registered lease agreement (where available, waiving the need for the real estate ownership certificate)
4. Hotel or guesthouse business license (where the WFOE uses a serviced office or hotel room as its registered address)
5. Market operator’s business license (where the WFOE registers within a commodities trading market)

Companies must be contactable through their registered address. Residential addresses cannot be used for commercial purposes. 

In some cases, virtual offices might be accepted as a registered address, including in some industrial parks. 

Registered capital

Registered capital is the total amount of capital that shareholders commit to contributing to the company, as declared at the time of registration. It is recorded on the business license and must therefore be determined before the business registration procedures are carried out.

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For WFOEs, registered capital can be denominated in either RMB or a freely convertible foreign currency. Contributions can be made in cash or in the form of non-monetary assets such as equipment, intellectual property, or land use rights, provided that ownership is clear, rights are unencumbered, and the assets have been legally appraised and transferred in accordance with the company’s AoA. Equity or debt in a domestic company may also be used as a form of contribution. 

No minimum registered capital is required for corporate establishment except for areas such as banking, finance, and insurance, among others. However, the foreign shareholder should ensure that a company’s registered capital is enough to sustain its business activities for at least a year, including rent, employee salaries, and office expenses. Certain regulated sectors impose their own minimum capital requirements. 

Under the 2024 Company Law, shareholders must fully pay up their subscribed registered capital within five years of the company’s establishment. The contribution schedule must be set out in the articles of association. From May 1, 2026, the schedule must also be written on the company registration application form. 

Company name selection 

Before submitting the application for registration, companies should select and confirm a compliant company name. While name registration is no longer a separate procedural step and is handled as part of the overall registration procedures, companies are advised to confirm their intended name in advance using the Enterprise Name Registration System to ensure it does not violate requirements and to avoid delays. 

Company names in China must follow a prescribed format and are subject to rules on prohibited and restricted words and characters.

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The company name is submitted as part of the registration application to the local administration for market regulation (AMR) authority. Applicants can also submit their proposed name online through the Enterprise Name Registration System. The system will automatically compare the proposed name against existing registered names and flag any prohibitions, limitations, or risks under the relevant regulations. If the proposed name is similar to an existing registered name, the applicant must sign an indemnity undertaking accepting full legal liability for any infringement. 

Once submitted, the local AMR will reserve the proposed name for a period of two months. Where the company is legally required to obtain approval before establishment, or where its business scope includes items requiring prior approval, the name will be reserved for one year. 

The applicant may request a formal name reservation notice from the AMR if needed. However, the reserved name cannot be used for business activities during the reservation period, and the company must complete its registration before the reservation period expires. 

The SAMR will grant name registration upon confirming that the proposed name meets the requirements of the relevant enterprise name registration regulations and the Market Entity Registration Management Regulations. If the name does not meet these requirements, the SAMR will issue a rejection notice setting out the reasons and legal basis for the decision. 

For more information on name registration, see our article on China’s New Company Registration Measures. 

Company registration procedures 

When registering a WFOE, there are broadly two matters that need to be completed: 

• Registration and application (登记): submission of materials for approval by SAMR, resulting in the issuance of a business license; and
• Information filing (备案): Mandatory sharing of certain information on the company with relevant authorities, but does not require approval. 

Applicants may handle the WFOE registration and filing matters by themselves or designate a representative or agent to do it on their behalf. 

Where to register: WFOEs apply for company registration with the registration authority located in the jurisdiction of their place of principal place of business. 

Registration

When registering a business, the following information must be provided: 

1. Company name
2. Type of entity
3. Scope of business
4. Domicile or principal place of business
5. Registered capital or amount of contribution
6. Name of the legal representative, executive partner, or person in charge
7. The names or titles of shareholders of limited liability companies, promoters of joint-stock companies, or contributors to non-corporate enterprise legal persons 

Each of these items is explained in greater detail below. 

The above information is provided by submitting the Company Registration (Filing) Application Form (公司登记（备案）申请书). The 2022 version is currently in use; however, the 2026 version has been released by SAMR and will be the effective document from May 1, 2026.   

Applicants must sign or affix their seal to the application materials. They may use e-signature tools and methods such as the National Unified Electronic Business License System to sign or chop documents. 

Information filing 

Companies must provide the following information and documents to the registration authority during the registration process: 

1. Articles of association
2. Operating period
3. Shareholders’ subscribed capital contribution amounts
4. Directors, supervisors, and senior management
5. Registration liaison person and designated recipient for service of legal documents
6. Other matters prescribed by laws and administrative regulations 

These materials are provided for filing purposes only and do not need to be approved by the authorities. 

Document checklist 

The full list of documents to be submitted is provided in the Standardized Materials for Business Entity Registration (the “document checklist”) issued by SAMR. The 2022 version of the checklist is currently in force; however, the 2026 version will be implemented from May 1, 2026. 

Applicants must submit the following materials when registering their business: 

1. Company Registration (Filing) Application Form (2022 version; 2026 version (effective May 1, 2026);
2. Articles of Association (signed by all shareholders for LLCs and by all promoters for joint-stock companies);
3. Legal documents or identity certificates of shareholders and promoters:
   1. A copy of the business license if the shareholder or promoter is a company;
   2. A copy of the public institution’s legal person registration certificate if the shareholder or promoter is a public institution;
   3. A copy of the social organization’s legal person registration certificate if the shareholder or promoter is a social organization;
   4. A copy of the private non-enterprise unit registration certificate if the shareholder or promoter is a private non-enterprise unit;
   5. A copy of the identity document if the shareholder or promoter is an individual;
   6. Legal documents or identity certificates, if the shareholder or promoter is a foreign investor. In this case, the documents or identity certificates must be notarized by a notary public of their country of origin and authenticated by the Chinese embassy (or consulate) in that country.
4. Appointment documents and photocopies of the identity documents of the legal representatives, directors, supervisors, and senior management personnel.
5. Documents related to the company’s address.
6. For companies whose establishment requires approval, or whose business scope applied for registration includes items that require prior approval, copies of the relevant approval documents or licenses should be submitted.

The 2026 version of the document checklist makes two changes that are relevant to WFOEs: 

• Shareholder capital contribution deadline information: As previously mentioned, the application form will soon require the collection of information on the timeline for shareholders’ capital contributions, reflecting the 2024 Company Law’s five-year contribution rule. This means the AoA and shareholder information submitted must now include these contribution schedules.
• Real-name verification confirmation form: this form has been added to the application forms, meaning applicants (including WFOE investors and legal representatives) must now formally confirm their identity and the consistency of the registration application. This is an additional form to be completed rather than an additional supporting document. 

Business scope 

The business scope sets out the commercial activities that a company is permitted to engage in. It will be written on the company’s business license and other registered information, such as the company name, registered capital, and legal representative.  

To define the scope of business for the sake of business registration, companies must select the general business items and licensed business items that apply to their main industry or business characteristics in accordance with the Business Scope Standards Catalogue operated by SAMR, which can be found online here. 

The “general business items” refer to sectors and activities that do not require approval, whereas the licensed business items refer to the business activities that require prior approval and licensing. 

Approval 

The registration authority will grant on-the-spot registration if the application materials are complete and compliant. If on-the-spot registration is not possible, the processing may take up to three days or up to six days for complex cases. 

The authority will then issue a business license, with the date of issuance of the business license being the date of the company’s establishment. 

The registration authority may refuse an application if the materials provided are not complete or compliant, and will explain the reason for the refusal. 

Post-registration procedures 

Carving of company chops 

All companies operating in China are legally required to have official company chops. These are carved through designated agencies approved by the Public Security Bureau (PSB).  

The following chops are mandatory:

• The official company chop (公章): with the widest scope of use, the official company chop is required when any important document is signed and can provide legal authority when opening a bank account or altering the name or business scope of the company.
• Financial chop (财务章): used for opening a bank account, issuing checks, authenticating financial documents, such as tax filings and compliance documents, and for most bank-related transactions. While it is mandatory, the company chop can often be used in its place.
• Invoice chop (发票专用章): required for issuing official invoices and tax receipts (fapiao). A chopped invoice is required to declare a purchase as a business expense.
• Customs chop (海关印章): required for companies carrying out cross-border trade, this chop is used for customs declarations for the import and export of goods. 

The following chops are optional: 

• Legal representative chop (法人章): Owned by the company’s legal representative, who is the main principal of the company identified on the business license and has the authority to enter binding obligations on behalf of the company. The legal representative’s personal chop can be used in place of or alongside a signature, or alongside one.
• Contract chop (合同章): A separate contract chop for signing contracts with their employees or executing agreements between salespeople and clients. This chop is not mandatory, but can be used instead of the company chop for contracts.
• Electronic chop (电子印章): the digital equivalent of a given chop used for online transactions, including financial and contractual ones. 

Company chops must be registered with the PSB, and the official chop and financial chop must also be registered with the company’s bank. 

Tax registration 

Companies must register with the local tax bureau within 30 days of receiving their business license. Under the current integrated system, the basic tax identification number is the same as the Unified Social Credit Code (USCC) on the business license, but the company must still activate its tax account, select its taxpayer status (general VAT taxpayer or small-scale taxpayer), and enable fapiao (official invoice) issuance at the local tax office.

The tax authorities will process the registration and issue a tax registration certificate on the same day they receive the application. 

WFOEs are subject to the same standard corporate income tax (CIT) rate of 25 percent as domestic companies, unless eligible for a preferential CIT rate in a free trade zone or other development zone. 

Opening a bank account 

WFOEs must open a bank account in China after obtaining the business license in order to carry out business in China.  

Two main accounts are required: 

• RMB Basic Account: Used to conduct daily business operations in China, this account serves as the sole channel for the company to withdraw RMB cash and is also used for making tax payments. The bank must be authorized by the local tax authorities and be fully integrated with the Golden Tax System, which is part of China’s digital tax infrastructure, which generally does not include foreign banks. Companies can open multiple RMB accounts.
• Foreign Currency Capital Contribution Account: The foreign currency capital contribution account used to receive capital injections from the foreign investor. Approval to open this account can be obtained from the State Administration of Foreign Exchange (SAFE).

Companies can open both an initial basic RMB account and a foreign currency capital contribution account in the same bank to streamline the process. 

Additional general RMB accounts and other types of foreign currency accounts can be opened for different purposes. For foreign currency accounts, these may include a settlement account for the collection of current items in a foreign currency, foreign debt special accounts, and temporary capital accounts.  

The legal representative will generally be required to be physically present for the account opening. 

Banks in China have strict know-your-client protocols, which means the banks will require an on-site visit to the business premises to verify the existence of the physical premises and staff.  

The entire account opening process takes three to five working days with a Chinese bank and three to four weeks with an international bank. 

Capital contribution 

After the foreign currency capital account is open, the foreign investor can remit the registered capital into that account. As previously mentioned, under the 2024 Company Law, the full amount of subscribed capital must be contributed within five years of establishment. 

Social security and housing fund registration 

In order to hire employees in China, companies must register them with the local Social Insurance Bureau and the Housing Fund Bureau to initiate the company’s corresponding accounts. 

This is required in order to make the mandatory social security and housing fund contributions for each employee. 

Generally, employers must apply for social insurance registration with the local social insurance agency within 30 days of establishment, presenting their business license, registration certificate, or company chop. However, in many cities, this is now done automatically when the application for business registration is submitted.

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If the procedures are not done automatically, the company should register at the local Human Resources and Social Security Bureau, or in person at the social insurance agency window. 

After registering, the company must then register for the payment registration, which can be done digitally through the Electronic Tax Bureau online platform (电子税务局) or the Social Insurance Fee Management Client desktop application (社保费管理客户端). 

To register for the housing provident fund, companies must open a unit account with the local Housing Provident Fund Management Center (住房公积金管理中心). As with the social security registration, in many cities, this is now handled automatically or simultaneously with business registration. Where a separate application is required, the company submits its business license and relevant company information, either online or at the center’s service window. 

Once the unit account is established, the company must open individual housing fund accounts for each employee, recording their contribution base (linked to salary). Both the employer and employee contribute at the same rate, which the company can select within a range set by local authorities (typically 5 to 12 percent). 

Foreign investment information reporting 

Under the FIL and its implementing regulations, WFOEs must submit an Initial Foreign Investment Information Report (外商投资初始报告) through the National Enterprise Credit Information Publicity System. This is a filing rather than an approval and can be completed after the business license is issued. 

The information shared through this report includes general information on the company, its business scope, shareholders, and management, but also additional information, such as whether it is operating in an encouraged industry or located in a free trade zone. 

This initial report is shared by SAMR with MOFCOM, and companies do not need to separately submit a report.

As one of Asia’s leading business setup consultants, we help companies structure entities to meet strategic goals and maximize operational efficiency, including cross-border asset transfers, M&A transactions, and corporate relocations.

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