Company Setup in China and Corporate Bank Accounts
Company setup in China is well mapped, but it is unforgiving of small errors. A name that does not match, a capital transfer from the wrong account, an office the bank will not accept. We plan for each one before it can stall the company.
About China as a market and a supply base
China is the world’s second-largest economy and the largest trading nation by goods. For most of our clients it plays two roles at once: the source of much of what they buy, and a market for metals, minerals and energy that few others can match in size.
Foreign investors operate under the Foreign Investment Law, in force since 2020, which treats foreign-owned companies like domestic ones except in sectors on a published negative list. The revised Company Law, in force since July 2024, now requires shareholders of a limited company to pay in their registered capital within five years. A new VAT Law took effect in January 2026.
What sets China apart from the other countries we cover is control of money. The renminbi is not freely convertible, and capital coming in and profits going out both pass through rules set by the central bank and the foreign exchange regulator. A company can be formed correctly and still be unable to move funds if those rules were not planned for.
Enterprise income tax
25% standard rate, with reduced effective rates for qualifying small low-profit enterprises and some encouraged sectors.
Three VAT rates
13%, 9% and 6% depending on the goods or services, now set out in the VAT Law in force since January 2026.
Negative list for investors
Foreign investors can own companies outright in most sectors, apart from activities on the published negative list.
Renminbi and capital rules
The renminbi is managed rather than freely convertible, so capital and profit transfers follow set procedures.
Company setup in China: what the process involves
Company setup in China usually means a wholly foreign-owned limited company, often still called a WFOE. The process is clear, but documents, names and capital all have to match exactly from the first filing to the first bank transfer.
Name and business scope
Approving the company name and the exact activities it may carry out, which later limit what it can invoice for.
Business license
Registering with the local market regulator, with legalized and translated documents from the foreign shareholder.
Seals, tax and customs
Making the company seals, registering for tax and invoicing, and registering with customs if the company will import or export.
Registered capital plan
Setting an amount and timetable the shareholder can actually meet, now that capital must be paid in within five years.
Two decisions deserve more time than they usually get. The business scope decides what the company can legally sell, so a trading company needs it written broadly enough at the start. The registered capital decides how much the shareholder is committed to pay, and since 2024 that commitment has a deadline.
We run the formation through Company Formation and Market Entry. Many groups hold their Chinese company through a Hong Kong parent, and Holding Companies and SPVs covers whether that structure suits yours.
Bank account opening in China
A Chinese company needs more than one account, and the order matters. The basic account handles day-to-day payments and payroll, and a separate capital account receives the shareholder’s investment from abroad. Both are opened in person, and the capital account is linked to foreign exchange registration.
Requirements vary between branches of the same bank, and a refusal at one bank rarely carries over to the next, because many documents must be reissued. So we prepare one complete file, choose the branch that suits the company’s trade, and plan the capital transfer before any money moves. The decision remains the bank’s. Our part is to remove every avoidable reason for delay.
Corporate Banking and Account Opening Support covers the accounts, and Cross-Border Payments Advisory covers how money moves between China and the rest of the group.
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01
The legal representative in person
The legal representative attends the branch with an original passport, often on dates the bank sets at short notice.
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02
A real office on the ground
Banks may visit the premises to check the lease, the nameplate and the staff. A virtual office often fails this visit.
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03
Names that match exactly
The shareholder’s name must match across the license, the articles and the transfer, punctuation included.
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04
Capital from the right sender
Registered capital must come from the registered shareholder itself, in the currency set out in the articles.
Company setup in China: common questions
A wholly foreign-owned enterprise, the traditional name for a Chinese limited company owned entirely by foreign investors. Since 2020 it is formed under the same Company Law as domestic companies, though the term is still widely used.
There is no general minimum, but the amount should match the business plan, and since July 2024 shareholders must pay it in within five years. Setting it too high creates a debt the shareholder is legally bound to meet.
Investment from a foreign shareholder must arrive in a dedicated capital account, registered for foreign exchange purposes. Funds can then be converted and used only against documents showing a genuine, permitted purpose.