Running a company in China, explained by the lawyers who do it.
Setting up, compliance, tax, staff and exits for foreign-invested companies, organised into 6 topics.
Setting up a company
Choosing a structure, naming the company, drafting the articles and getting it registered.
All 7 articles →What is a wholly owned subsidiary? Meaning, examples and the China version
A wholly owned subsidiary is a company whose shares are 100% owned by another company, its parent. It is a separate legal entity with its own liabilities. In China, a foreign company's wholly owned subsidiary is called a WFOE (wholly foreign-owned enterprise).
Subsidiary, branch or representative office in China?
In China, most foreign companies choose between a subsidiary (usually a WFOE), a representative office and, more rarely, a branch. A subsidiary can earn revenue and hire directly; a representative office can only do liaison and research; foreign company branches are limited to a few sectors such as banking.
Types of companies in China: a guide for foreign investors
Foreign investors in China can use a limited liability company (a WFOE or joint venture), a company limited by shares, a foreign-invested partnership or a representative office. Most choose a limited liability company because it combines full operating rights with limited liability.
Company law & compliance
Running a Chinese company within the rules: the 2024 Company Law, capital, chops, the legal representative and annual filings.
All 6 articles →China's 2024 Company Law: the changes that matter to foreign-invested companies
China's revised Company Law took effect on 1 July 2024. It requires LLC capital to be paid in within five years and makes directors responsible for chasing unpaid capital. It also allows simpler boards and makes shareholders, directors and the legal representative more exposed when things go wrong. Every WFOE and JV is affected.
The 2027 capital deadline: which companies need to act, and how
Every Chinese limited liability company set up before 30 June 2024 with a capital schedule longer than five years must shorten it by 30 June 2027. Here is how to check whether your WFOE or JV is affected, and the three ways to fix it.
Annual report, audit and tax filing: the yearly compliance calendar for a China company
Every Chinese company, including WFOEs, must file an annual report to SAMR by 30 June, which also carries the foreign-investment information. Before 31 May it must file the annual corporate income tax reconciliation, usually with audited accounts. Missing the 30 June deadline puts the company on the abnormal operations list.
Company tax & invoicing
Corporate income tax, VAT, fapiao and customs duties for foreign-invested companies.
All 4 articles →China tax rates in 2026: a quick reference for foreign businesses
China's corporate income tax rate is 25%, with 15% for qualifying high-tech and encouraged-industry companies and an effective 5% for small low-profit enterprises until 2027. VAT is 13%, 9% or 6%. Individual income tax runs from 3% to 45%, and dividends paid abroad carry 10% withholding tax before treaty relief.
Fapiao in China: the complete guide for foreign companies
A fapiao is China's official tax invoice, issued through the tax authority's system. Without one, a business generally can't deduct the expense or reclaim input VAT. Special VAT fapiao allow input VAT credit; general fapiao don't. Most fapiao are now fully digital.
China's VAT Law: what changed on 1 January 2026
China's VAT Law took effect on 1 January 2026, replacing the provisional regulations that applied for decades. The headline rates stay at 13%, 9% and 6%. The law tightens the rules on small-scale taxpayer status, adds a general anti-avoidance rule and clarifies when services and intangibles are taxed in China.
Your company as an employer
What a Chinese company owes its staff: contracts, social insurance, termination and severance.
Topic overview →Chinese labour law: what foreign employers must get right
Chinese labour law strongly protects employees. Employers must sign a written contract within one month of hiring or pay double wages, enrol staff in social insurance, and can only dismiss on grounds set out in the Labor Contract Law. Getting contracts and the employee handbook right from day one prevents most disputes.
Severance pay in China: how it's calculated
Statutory severance in China is one month's wages for each full year of service, with half a month for service under six months. For high earners, the monthly figure is capped at three times the local average wage and the years are capped at 12. Unlawful dismissal usually costs double.
Changing or closing a company
Selling shares, changing owners and winding up a Chinese company cleanly.
Topic overview →Equity transfer in China: selling or buying shares in a Chinese company
Transferring equity in a Chinese LLC takes a written transfer agreement, notice to the other shareholders and SAMR registration, plus tax, foreign-exchange and bank steps. A foreign seller is usually taxed at 10% on the gain, which the buyer withholds. The 2024 Company Law makes buyers liable for unpaid capital.
How to close a company in China: simplified deregistration vs. full liquidation
There are two ways to close a Chinese company. Simplified deregistration takes a few months for a company with no debts, after a 20-day public notice. Full liquidation takes six to twelve months or more. It needs a liquidation group, a 45-day creditor notice, and tax, customs and bank clearance before SAMR removes the company.
Hong Kong companies
Hong Kong company types and profits tax, and how a Hong Kong company sits above a mainland subsidiary.
Topic overview →Types of companies in Hong Kong: which one should you use?
Most foreign entrepreneurs in Hong Kong use a private company limited by shares. Other options include a public company, a registered branch of an overseas company (a non-Hong Kong company), a representative office, a sole proprietorship and a partnership. Only limited companies give owners limited liability.
Hong Kong profits tax: rates, territorial basis and offshore claims
Hong Kong taxes only profits arising in or derived from Hong Kong. Corporations pay 8.25% on the first HKD 2 million of assessable profits and 16.5% on the rest. There's no VAT, no tax on dividends and no capital gains tax, but foreign-sourced passive income now needs economic substance to stay exempt.
Have a question these articles don't answer?
You'll receive a fixed written quote and a timeline. There's no sales call unless you ask for one.