- Since the Foreign Investment Law took effect on 1 January 2020, foreign-invested companies are ordinary PRC companies governed by the Company Law — the old "three FIE laws" are gone, and the five-year transition for legacy structures ended on 31 December 2024.
- Market access is governed by the negative list: if your sector is not on it, you receive national treatment and can generally own 100%. The list has been repeatedly shortened; manufacturing restrictions have been removed. Check the current edition before you plan anything else.
- The three practical vehicles are a WFOE (wholly foreign-owned company — full control), an equity joint venture (where a Chinese partner adds licences, channels or land), and a representative office (liaison only — it cannot invoice).
- Under the 2023 Company Law (effective 1 July 2024), subscribed registered capital of a limited company must generally be paid in within five years of incorporation — size your capital to what the business actually needs.
- Incorporation itself is fast (often measured in weeks); what takes time is what comes before (name, lease, documents legalised for use in China) and after (bank account, tax registration, industry licences).
First question: is your sector open? 先查负面清单
China manages foreign-investment access through a negative list — the Special Administrative Measures for Foreign Investment Access, issued jointly by the NDRC and MOFCOM and revised periodically. The logic is simple: if your business is not on the list, foreign investment receives national treatment — you incorporate the same way a Chinese founder would, and 100% foreign ownership is generally available. If your business is on the list, the entry describes the restriction: a shareholding cap, a requirement for a Chinese controlling partner, or outright prohibition.
The list has been shortened in nearly every revision. The 2024 national edition removed the last restrictions on manufacturing, and pilot programmes have been opening service sectors — including value-added telecoms and certain healthcare activities — in Shanghai and other designated areas. Free-trade zones (Shanghai's Lin-gang among them) run a shorter list still. Because editions change and pilots move faster than the national list, treat any specific item count you read online as dated: screen your concrete business scope against the current edition before committing to a structure, subject to current regulations.
Two more gates can apply regardless of the list: national security review for investments affecting or possibly affecting national security (Measures on Security Review of Foreign Investment), and ordinary industry licensing — a licence a Chinese company would also need (food, medical devices, education, financial services and so on).
Choosing the vehicle 选择载体
| Vehicle | What it is good for | Main limits |
|---|---|---|
| WFOE 外商独资公司 |
Full ownership and control; keeps know-how in-house; profits flow to you alone. The default choice where the sector is open and you do not need a partner's licences or channels. | You build everything yourself — team, channels, government relationships. Capital must be sized realistically (see the five-year rule below). |
| Equity JV 合资公司 |
Sectors where a cap or partner requirement applies, or where a partner genuinely contributes licences, distribution or land. Governance is now plain Company Law — no special JV statute. | Deadlock and exit are the classic pain points: negotiate board control, reserved matters, deadlock-breaking and exit pricing before signing. See our Equity desk on shareholder disputes. |
| Rep office 代表处 |
Market research, liaison and quality control before committing capital. Quick to register, no registered capital. | Cannot sign sales contracts or invoice; hires local staff through a dispatch agency; taxed on deemed profit. A stepping stone, not a business. |
Investors who want to test the market before incorporating anything can also start with cross-border contracts (distribution, licensing) — see Contracts & IP — or use the Oriental Hub zone for visa-free negotiations and exhibitions while the structure is being decided.
Registered capital after the 2023 Company Law 新公司法下的注册资本
The Company Law as revised in 2023 (effective 1 July 2024) ended the era of casually subscribing inflated capital: shareholders of a limited liability company must generally pay in their subscribed capital within five years of incorporation, and companies incorporated before the revision are being brought onto the same track through a transition mechanism. For a foreign investor the practical advice is unchanged but now enforced: subscribe what the business plan actually needs — enough to fund operations until self-sustaining (undercapitalisation means repeated, procedure-heavy capital increases), not so much that you create a five-year funding obligation you never intended.
There is no general statutory minimum capital, but banks, landlords, licence authorities and visa officers all read the number as a signal of seriousness. Capital can be contributed in cash or in kind (equipment, IP); cash in foreign currency flows through the company's capital account under foreign-exchange rules — the same pipeline, run in reverse, that later takes your dividends out (see Profit Repatriation).
The incorporation path, step by step 设立流程
- Structure and documents. Confirm the shareholder of record (direct holding vs. a Hong Kong or Singapore intermediate holding company — the choice affects treaty dividend rates and future exit flexibility), and prepare the investor's corporate documents, notarised and legalised or apostilled for use in China (China acceded to the Apostille Convention with effect from November 2023, which shortened this step for many jurisdictions).
- Name and registered address. Reserve a compliant Chinese company name and secure a lease for a registered address in the district where you will actually operate — the district determines your tax bureau and, in practice, your relationship with local officials.
- Registration. File incorporation with the local Administration for Market Regulation (AMR); foreign-investment information is reported through the enterprise registration system rather than a separate approval (Foreign Investment Law, information-report system). Negative-list sectors and security-review cases go through their additional gates first.
- Post-registration. Company chops, bank accounts (basic RMB account and foreign-currency capital account), tax registration and invoicing setup, social-insurance and housing-fund registration, plus any industry licences. This tail is where timelines actually live.
A realistic end-to-end expectation for a straightforward Shanghai WFOE is measured in weeks once documents are ready; document legalisation and bank onboarding are the usual long poles. We give a dated checklist per project rather than quoting a universal number.
Where investors actually stumble 常见误区
- Copying the home-country structure. A Delaware-style board or shareholder agreement pasted into a Chinese charter often conflicts with Company Law mandatory rules — governance must be rebuilt on PRC foundations, not translated.
- Business scope too narrow. Your registered business scope bounds what you may invoice for. Draft it for where the business is going, not just where it starts.
- Trademark filed after incorporation. China is first-to-file. File your marks — including a Chinese-character name — before the market knows you are coming. See Contracts & IP.
- JV terms left "to be discussed later". Later never comes cheaper. Deadlock, exit pricing and IP ownership are negotiated best on day one.
- Foreign Investment Law of the PRC (effective 2020-01-01) and its Implementing Regulation 《外商投资法》及实施条例 —— national treatment plus the negative-list access regime and the establishment of foreign-invested enterprises; supports 先查负面清单 and 设立流程.
- Special Administrative Measures (Negative List) for Foreign Investment Access, current edition 外商投资准入特别管理措施（负面清单，以现行版本为准）—— the restricted and prohibited sectors; supports 先查负面清单 and the sector points in 常见误区.
- Company Law of the PRC (2023 revision, effective 2024-07-01) 《公司法（2023修订）》 —— corporate forms, governance organs and the capital contribution timetable; supports 选择载体 and 新公司法下的注册资本.
- Measures on Security Review of Foreign Investment 《外商投资安全审查办法》 —— the security review filter applying alongside the negative list; supports 先查负面清单 and 常见误区.
Validity note 效力提示：Rules cited as in force at the review date above; where editions or pilot programmes are updated frequently, the current official text prevails.
This page is general legal information, not legal advice on any specific matter. 本页为一般性法律信息，不构成对具体个案的法律意见。
