Setting up a wholly foreign-owned enterprise (WFOE) in China is a defined statutory sequence — roughly eight steps, from name reservation to foreign-exchange registration — ending in a company that can hire, invoice and receive capital from abroad. On a clean file it takes about two to four months. What foreign companies underestimate is rarely the paperwork; it is the decisions taken before step one — the vehicle, the business scope, the registered capital — and two rules that have shifted since 2023: a five-year deadline to pay up capital and the Apostille replacing consular legalisation.
- The core sequence is eight steps: name reservation → registration documents → notarise/apostille shareholder documents → business licence → chops → bank account → tax → SAFE (foreign-exchange) registration.
- The business licence itself is fast — often 5–10 working days on a clean file. The bank account is the slow step, commonly 4–8 weeks.
- Under the 2024 Company Law (effective 1 July 2024), shareholders must pay up subscribed registered capital within five years. Set the number deliberately, not aspirationally.
- Since 7 November 2023, an apostille replaces consular legalisation for shareholder documents from Convention member states.
- SAMR now expects a genuine commercial address; shared or “virtual” addresses are increasingly rejected.
- Establishing an FIE is reported, not approved case-by-case, for sectors off the negative list.
The legal view of a WFOE set-up is not "who files the forms." It is a short list of structuring choices that lock in your tax, licensing and capital position — followed by a run of filings that only goes smoothly if those choices were right. Here is the order, and the decisions inside it.
Before step one: choose the structure
Three decisions made before any form is filed shape everything after:
- The vehicle. A WFOE is one of several ways into China; a joint venture or a representative office may fit better depending on control, licensing and how you intend to book revenue. Settle this first — see WFOE, JV or representative office.
- The business scope. China licenses companies by scope. Too narrow and you cannot invoice for part of what you do; too broad and you invite extra approvals. The scope must also be open to foreign investment — check it against the negative list before you commit (five checks before you commit).
- The registered capital. There is no general statutory minimum for most sectors, but the figure you choose is now a real obligation — see the five-year rule below. Set it to what the business genuinely needs in its early years.
Get these right and the eight steps below are administration. Get them wrong and you are amending a licence — or recapitalising — after the fact.
Steps 1–3: name reservation, documents, apostille
Step 1 — reserve the name. You submit Chinese-character name options to the local State Administration for Market Regulation (SAMR); approval typically takes 1–3 working days. The name follows a set format — city, brand, industry, company type — and once cleared is held for you for a period.
Step 2 — prepare the registration documents. The Articles of Association and the application package are drafted and filed in Chinese. This is where the structuring decisions become binding text — scope, capital, governance and the legal representative are all fixed here.
Step 3 — notarise and authenticate the shareholder documents. Your parent company's certificate of incorporation and the identity documents of directors and the legal representative must be notarised at home and authenticated for use in China. Since 7 November 2023, for the many countries in the Apostille Convention, a single apostille replaces the old two-step consular legalisation — faster and cheaper. For non-member states, consular legalisation still applies.
Step 4: business licence and the foreign-investment report
Step 4 — the business licence. SAMR issues the business licence, usually within 5–10 working days for a clean file. That licence is the company's legal birth certificate, and the date on it starts the clock on several later obligations, including the capital deadline.
Establishing a foreign-invested enterprise also triggers a foreign-investment information report. Under the Foreign Investment Law, this is handled through the SAMR registration system and shared with the Ministry of Commerce (MOFCOM) — for sectors off the negative list it is a report, not a case-by-case approval. That is a genuine simplification from the pre-2020 regime, but the report is mandatory, and later changes must be reported too.
Steps 5–8: chops, bank account, tax and SAFE
The licence is not the finish line. Four post-licence steps make the company operational:
- Step 5 — company chops. The official seals are carved and registered with the Public Security Bureau. In China the chop, not a signature, binds the company — so control of the chops is a governance question, not a stationery one.
- Step 6 — corporate bank account. This is usually the longest single step, often 4–8 weeks, involving bank due diligence and, frequently, in-person verification. Nothing downstream — paying suppliers, receiving capital — works until it is open.
- Step 7 — tax registration. The company registers with the tax authorities, sets up its tax profile and invoicing (fapiao), and enrols for social insurance for staff.
- Step 8 — foreign-exchange (SAFE) registration. Registration with the State Administration of Foreign Exchange, done through the bank, lets the company receive its capital injection from abroad and, later, remit profits. If you will import or export, customs registration is added here.
The deadline that changed in 2024: five years to pay up capital
The single most important change for anyone incorporating today sits in the 2024 Company Law, effective 1 July 2024. For companies established under it, shareholders must pay in the full subscribed registered capital within five years of establishment — the previously open-ended subscription system is gone. Existing companies have a transition window to shorten over-long schedules, but a new WFOE is on the five-year clock from its licence date.
Practically, this means the registered-capital figure is no longer a marketing number. Set it too high and you have committed real money on a real deadline; set it to genuine need and fund it on a schedule you can meet. This is the decision foreign teams most often make casually and regret later.
How long it takes — and a note on cost
End to end, a straightforward WFOE commonly takes two to four months, with the bank account and any document-authentication delays the usual variables. Set-up cost figures quoted online are third-party market data, not a fixed price — the real cost depends on city, scope, whether you lease qualifying premises, and how much capital you fund up front. Treat any single number you read as an estimate to test, not a quote. For the wider picture, see our China market entry practice page.
Frequently asked questions
Commonly two to four months end to end on a clean file. The business licence is fast — often 5–10 working days — but the corporate bank account is the slow step, frequently 4–8 weeks, and overseas document authentication can add time.
There is no general statutory minimum for most sectors. But under the 2024 Company Law you must pay up the amount you subscribe within five years of establishment, so choose a figure the business genuinely needs — not an inflated headline number.
Usually not. Since 7 November 2023 China is in the Apostille Convention, so for member states a single apostille replaces the old consular legalisation. Documents from non-member states still need consular legalisation.
Not for sectors off the negative list. Establishing a foreign-invested enterprise is reported through the SAMR system and shared with MOFCOM — a report, not a case-by-case approval. Restricted sectors are different and may need specific licences or clearance.
Increasingly no. SAMR expects a genuine commercial address and may verify it on site; many shared or “virtual” addresses are now rejected. Budget for qualifying premises before you file.
Sources
- China Briefing — Setting up a WFOE in China: a complete guide — step sequence, timelines and registration documents.
- China Briefing — China Company Law amendment in force from 1 July 2024 — the five-year registered-capital rule and transition.
- China Briefing — China joins the Apostille Convention — apostille replacing consular legalisation from 7 November 2023.
- Internal: choosing your China entity and our China market entry practice page.
This article is general information for foreign companies, not legal advice on any specific matter. Rules and practice change; please take advice on your facts.