How to start a business in China as a foreigner (2026)
Starting a business in China as a foreigner: moderate.
China permits 100% foreign ownership through a Wholly Foreign-Owned Enterprise (WFOE) or other FIE forms in any sector not appearing on the Foreign Investment Negative List, which was cut to 29 restricted/prohibited items in the 2025 update and now fully opens manufacturing to foreign capital. Company formation is governed by the 2020 Foreign Investment Law and the revised 2024 Company Law, with registration handled by the State Administration for Market Regulation (SAMR); end-to-end setup typically takes 8–14 weeks (roughly 1.5–3 months) and involves multiple regulators (SAMR, MOFCOM record-filing, tax bureau, banks, foreign-exchange). It is workable and increasingly liberalized, but paperwork legalization, sectoral licensing, the 5-year paid-in capital rule and city-by-city practice keep the process moderately complex rather than easy.
Legal framework
Foreign Investment Law (2020) + revised PRC Company Law (effective 1 July 2024) + 2025 Special Administrative Measures (Negative List) for Foreign Investment Access, administered by NDRC, MOFCOM and SAMR
Key points: starting a business in China
Foreign ownership
100% foreign ownership is allowed in all sectors outside the 2025 Negative List, which was reduced to 29 restricted/prohibited items (from 31); manufacturing was fully opened on 1 November 2024. Sectors on the list require a Chinese-majority JV or are prohibited.
Governing law
The 2020 Foreign Investment Law replaced the old WFOE/JV laws; the 5-year transition ended in early 2025, so FIEs are now governed primarily by the revised PRC Company Law (in force 1 July 2024) plus SAMR's Implementing Measures for Company Registration (in force 10 February 2025).
Minimum capital
There is no statutory minimum registered capital for a general WFOE (RMB 1 in law), but the revised Company Law requires subscribed capital to be fully paid in within 5 years of establishment; practical benchmarks are RMB 100k–500k for consulting, 500k–3M for trading, 1M–10M+ for manufacturing, and sector-specific minimums still apply (e.g., RMB 1 billion for foreign banks).
Setup steps
Typical path: (1) confirm sector is off the Negative List; (2) reserve Chinese company name with local SAMR; (3) file incorporation with SAMR (articles, legalized shareholder documents, lease, legal representative) and obtain the Unified Social Credit Code business license; (4) complete MOFCOM foreign-investment information report; (5) register with the tax bureau within 30 days; (6) carve chops, open RMB and foreign-currency bank accounts, register with SAFE for foreign-exchange.
Timeline & cost
End-to-end incorporation runs roughly 8–14 weeks (about 1.5–3 months) assuming overseas documents are notarized and apostilled/legalized; consulting/trading WFOEs are fastest and manufacturing WFOEs slowest. Professional service fees typically run about USD 2,500–12,000 depending on entity type and city.
Restricted/prohibited sectors
Restrictions remain concentrated in media, telecoms and internet information services, satellite/broadcast facilities, social-science research, geodetic/aerial/marine surveying and select cultural sectors; free-trade-zone-specific negative lists offer narrower carve-outs in some regions.
Timeline of decisions
- Law · officialPrivate Economy Promotion Law takes effect
China's first fundamental law dedicated to the private sector entered into force, guaranteeing fair market access/competition, financing support and rights protection for the private firms that make up over 92% of all registered businesses. It signals state commitment to a more predictable environment for private (including newly founded) enterprises.
Ministry of Justice (PRC)
- Decision · official2025 nationwide Market Access Negative List issued
The NDRC/MOFCOM released the updated unified negative list governing which sectors are restricted for both domestic and foreign entrants, further trimming restricted items while adding controls in sensitive areas (drones, e-cigarettes, pharma, internet services). Activities off the list are open to free market entry.
UNCTAD Investment Policy Hub
- Law · official2024 Foreign Investment Negative List takes effect
The Special Administrative Measures (Negative List) for Foreign Investment Access, 2024 Edition came into force, cutting restricted items from 31 to 29 and abolishing all remaining restrictions on foreign investment in manufacturing. Registration authorities will not process foreign-invested company set-ups in listed prohibited fields.
Beijing Investment Promotion Service Center
- Law · officialRevised Company Law and registered-capital regulations in effect
The comprehensively revised Company Law (adopted 29 Dec 2023) took effect alongside State Council implementation regulations, requiring LLC shareholders to fully pay subscribed registered capital within five years of formation and mandating public disclosure of capital changes. It reshapes how new companies are capitalized and governed.
Library of Congress
- Law · officialForeign Investment Law enters into force
The unified Foreign Investment Law took effect, repealing the separate WFOE, equity JV and cooperative JV laws and subjecting foreign-invested enterprises to the same Company Law as domestic firms under a pre-establishment national treatment plus negative-list regime. It standardized and simplified how foreigners establish businesses in China.
Ministry of Justice (PRC)
- Law · officialNational People's Congress passes Foreign Investment Law
The NPC adopted the landmark Foreign Investment Law, establishing the framework that replaced China's three-decades-old fragmented foreign-investment statutes. It promised equal treatment and reduced approval barriers for foreign-funded enterprises.
UNCTAD Investment Policy Hub
- Guidance · officialWorld Bank: China jumps to 46th, a top-10 reformer
The Doing Business 2019 report ranked China 46th (up from 78th) after a record seven reforms; the time to start a business fell to 9 days and Beijing became one of only two cities where start-up was free. It marked the payoff of China's business-registration streamlining drive.
World Bank
- Decision"Five-in-One" business license and Unified Social Credit Code rolled out nationwide
Expanding the 2015 "three-in-one" reform, the State Council merged business, tax, organization-code, statistics and social-insurance registrations into a single license bearing an 18-digit Unified Social Credit Code. This collapsed multiple agency filings into one step, sharply cutting the time and paperwork to register a company.
China Briefing
- Law · officialRegistered-capital registration reform takes effect
Amendments to the Company Law abolished minimum registered-capital thresholds (e.g., RMB 30,000 for LLCs) and replaced the paid-in system with a subscription system, letting founders set their own capital and contribution schedule. This removed a major upfront barrier to forming a company.
Library of Congress
- LawCompany Law of the PRC takes effect
Adopted by the NPC Standing Committee on 29 Dec 1993, China's first modern Company Law came into force, for the first time providing a legal framework for organizing and incorporating limited liability and joint-stock companies. It laid the foundation for company formation in the emerging market economy.
Indiana Int'l & Comp. Law Review
Sources
- china-briefing.com/news/is-wfoe-still-the-right-corporate-structure-for-china-in-2026/
- msadvisory.com/china-negative-list-explainer-foreign-investment/
- china-briefing.com/news/chinas-foreign-investment-negative-list-guide/
- morganlewis.com/pubs/2025/03/understanding-chinas-new-company-law-what-foreign-invest
- china-briefing.com/news/china-releases-new-company-registration-measures-company-law/
- msadvisory.com/minimum-registered-capital-wfoe-china/
- woodburnglobal.com/post/your-china-wfoe-s-5-year-capital-contribution-clock-is-already-r
- msadvisory.com/start-business-in-china/
- fdichina.com/blog/china-business-registration-2025-playbook/
- fdichina.com/blog/wfoe-registration-in-china-2026/
- msadvisory.com/wfoe-in-china/
- en.wikipedia.org/wiki/Negative_list_of_foreign_investment_in_China
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Next topicOrientation, not legal advice: verify against the primary sources linked above. Last verified 28 Aug 2026. Methodology & how to cite · State of Technology Regulation 2026