Asia-Pacific · Company formation

Company formation in China (WFOE)

This fits foreign companies that need a fully-owned operating entity in mainland China, one that can invoice and earn RMB directly. You will need to absorb a multi-agency setup process, a five-year capital-injection commitment and an annual audit burden.

Last verified July 2026

At a glance

Entity
Wholly Foreign-Owned Enterprise (WFOE) — a limited liability company (有限责任公司) wholly held by foreign investor(s), governed by the 2020 Foreign Investment Law and the 2024 Company Law
Corporate tax
Standard Corporate Income Tax 25%. Reduced 15% for High/New-Tech Enterprises; small low-profit enterprises pay an effective ~5% on the first RMB 3m of taxable income (relief extended through end-2027). Plus VAT (typically 6% services / 13% goods) and surtaxes.
Incorporation time
~15-20 working days for the business license once documents are filed; realistically 2-4 months end-to-end including foreign-document legalisation, chops, tax/SAFE registration and a working corporate bank account
Minimum capital
No statutory minimum for most sectors (removed in 2014); capital is self-declared but must suit the business and be fully paid within 5 years of establishment under the 2024 Company Law. Regulated sectors (banking, insurance, freight forwarding, etc.) keep specific minimums.
Resident director
No resident director required. A WFOE must appoint a legal representative (法定代表人) and a supervisor; the legal rep can be a non-resident foreigner. Since 2024, applicants and the legal rep must complete real-name identity verification.
Audit
Mandatory annual statutory audit by a China-licensed CPA firm for every FIE regardless of size or revenue (Company Law art. 164). No small-company exemption; audit feeds CIT settlement, the Foreign-related Annual Report (FAR) and dividend/SAFE remittance.
Remote set-up
Largely remote/online-fileable, but a China registered-office lease is required. Foreign investor corporate/ID documents must be notarised and apostilled at home (China joined the Apostille Convention in Nov 2023; pre-2023-style consular legalisation still applies for non-member states). Corporate bank-account opening usually still needs an in-person visit by the legal rep.
Government fee
No government incorporation fee — SAMR/local AMR issues the business license (with 18-character Unified Social Credit Code) free of charge; costs are lease, notarisation/apostille, translation and professional fees, not a registry filing fee.
Best for
This fits foreign companies that need a fully-owned operating entity in mainland China, one that can invoice and earn RMB directly. You will need to absorb a multi-agency setup process, a five-year capital-injection commitment and an annual audit burden.

The process

  1. Reserve the company name and prepare Articles of Association, investor documents (notarised + apostilled) and a China registered-office lease
  2. File with the local State Administration for Market Regulation (SAMR/AMR) — foreign-investment record-filing runs in parallel — to obtain the business license
  3. Carve official chops (company, legal-rep, finance, invoice) and complete tax registration and SAFE/foreign-exchange registration
  4. Open the corporate and capital bank accounts, register for social insurance/housing fund, then inject registered capital within the 5-year window
What can go wrong
  • 'No minimum capital' is misleading: declared capital is a binding debt you must pay in within 5 years, so under-capitalising to look cheap can backfire.
  • Foreign-ownership restrictions still apply — check the current Negative List; some sectors are prohibited, capped or require a JV/licence before a WFOE is possible.
  • Annual audit, CIT settlement, FAR and (where relevant) transfer-pricing filings are non-optional; missing them blocks dividend remittance and SAFE outbound payments.

Form a company in China (WFOE)?

One named person on the file, an honest read on tax and substance, and a fixed quote before you commit.