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Before applying for a business license, there is a special procedure, i.e., submitting a record-filing or approval application to the provincial-level Commission of Commerce of the location where the investment project is situated.

According to the Special Administrative Measures for Foreign Investment Access (the Negative List), in China an industry-based categorized access for foreign investors is implemented.

✅Industries under the permitted category, which fall outside the Negative List, are subject to a record-filing procedure, which is streamlined and efficient.

❌Industries under the restricted category within the Negative List (e.g., healthcare, education, value-added telecommunications, transportation, energy, etc.) are subject to multi-level approval to ensure compliance and alignment with national industrial policies.

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I. Record-Filing Procedure (for Permitted Industries)

The record-filing procedure applies to all industries outside the Negative List, enabling efficient processing through a fully online workflow.

Taking the processes in Shanghai Free Trade Zone as example, the company must first complete pre-verification of industry access, say, log on to the Shanghai government portal or the free trade zone portal's "Free Trade Zone Investment Application Express", compare the proposed investment industry with the scope of the Negative List, and initiate the record-filing procedure only after confirming that approval is not required.

The core process consists of two models:

• "One-time" Acceptance Procedure (Applicable to New Establishment of an FIE): After completing the pre-approval of the company name, the enterprise shall fill out the Record-Filing Application Form for the Establishment of a Foreign-Invested Enterprise online, upload the investor qualification certificates, the FIE's articles of association (which must comply with the Company Law), and other materials. After downloading, printing, and signing these documents, they shall be submitted to the investment management service window of the Free Trade Zone Comprehensive Service Hall. If the materials are complete and comply with legal requirements, the record-filing receipt can be obtained within 3 working days.
• General Procedure (Applicable to scenarios such as mergers and acquisitions or capital increases): The enterprise logs on to the Ministry of Commerce's "Foreign Investment Comprehensive Management System" to submit materials online, including a description of the equity structure and a statement of the ultimate beneficial owner (UBO). After the system automatically verifies the submission, a record-filing receipt is generated.

Key Material List:

• Record-Filing Application Form for the Establishment of a Foreign-Invested Enterprise: Must indicate the comparison results between the business scope and the Negative List, and clearly state the equity structure (including shareholders' contribution methods and ratios).
• Investor Qualification Certificates: Overseas enterprises must provide registration certificates, and individual investors must provide identification documents. These documents must be notarized in their country of origin, then certified with an Apostille by the competent authority of the country.
• Company's Articles of Association: Must include clauses on shareholder meetings and board resolutions, and clearly specify the method of appointing the legal representative.
• Proof of Business Premises: For owned properties, just provide the property ownership certificate; for leased properties, submit a lease contract that has been filed for record at the platform of local authority of Housing and Urban-rural Development.

❓What Types of Bank Accounts Are Required?

A foreign‑invested enterprise (“FIE”) established in China must open at least two bank accounts: a RMB Basic Account and a Capital Account.

💰RMB Basic Account

Every FIE in China must open one and can only open one RMB Basic Account. This account is used for daily business operations and payment of taxes in RMB. It is also the only account from which the company may withdraw RMB cash.

💰Capital Account

An FIE must also open a Capital Account to receive capital contributions from foreign investors. The Capital Account may be denominated in foreign currency (e.g., USD) or RMB.

• A USD Capital Account may only receive USD capital remitted by foreign investors.
• An RMB Capital Account may only receive RMB capital remitted by foreign investors.

💰Other Accounts

If the FIE will receive foreign‑currency payments from overseas, it may/should apply to open an additional Foreign‑Currency General Settlement Account.

❓Should We Choose a Chinese Bank or a Branch of a Foreign Bank in China?

Branches of foreign banks in China can conduct certain cross‑border and interbank businesses (e.g., multinational corporate services, international settlement, FX services). However, their ability to provide traditional corporate banking services, such as corporate deposits and loans, settlement, trade finance, and personal banking service is highly restricted by Chinese laws and regulations.

Foreign bank branches also have very limited physical presence, and their online banking functions are less developed compared with Chinese banks. Therefore, opening accounts with a Chinese bank is generally the more practical choice. State-owned commercial banks in China is a highly reliable option for corporate banking needs.

❓Do We Need Online Banking Services?

Absolutely—unless you want to visit the bank in person every few days.

RMB Basic Accounts or RMB General Settlement Accounts can be equipped with online banking services.

Typically, two security tokens (e.g., U‑Keys) should be issued: one for operation, the other for approval.

❓What Documents Are Required?

Actually, the documentation requirement is similar to that for a domestic Chinese company. You can prepare materials according to the bank’s checklist. However, pls note the following requirements:

• If the foreign shareholder is an individual, his/her passport is required. Ensure the passport and visa are valid. Tourist visas should not be used. If the remaining visa period is short (e.g., less than 3 months), additional explanation may be needed, as banks worry about clients “disappearing after opening the account”.
• A Chinese finance manager’s ID card is required. If the finance manager is also a foreigner, the bank may refuse to open the account.
• The reserved phone number for the bank account is generally required to be a Chinese mobile number.

In the past, document preparation was the most complex part of setting up an entity in China. However, since China acceded to the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (effective November 7, 2023), the process has become significantly simpler.

This guide breaks down the required documents into two main parts:

• Documents from the Foreign Shareholder
• Documents for the Proposed Local Entity

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2️⃣Documents for the Proposed Local Entity

These documents relate to the new company being incorporated in China.

📚Proposed Company Name Pre-approval Application

**💻**Submit a name application online via the provincial Administration for Market Regulation portal.

💬Naming Convention: City + Brand Name + Industry + Limited Liability Company (all in Chinese)

🕰Approval is usually valid for 30 days

📚Proof of Registered Address

**🏠**A commercial-use property (office, retail space) is mandatory.

❌Residential addresses are not permitted for company registration.

**💻**Submit a valid lease agreement (min. 1-year term is common) and a copy of the property's ownership certificate (with the landlord's signature/seal).

📚Articles of Association (AoA)

⚖️Should be drafted in accordance with the Company Law of PRC, covering shareholders' rights, governance, profit distribution, etc.

**💻**Use the standard template from the website of Administration for Market Regulation as a base to ensure compliance with mandatory clauses.

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🌟Fully Digital Process

In major cities like Beijing and Shanghai, the entire registration can be done online via an "Integrated Online Service Platform." You can upload scanned copies of apostilled documents. Approval time has shortened to 1-3 working days (versus 1-2 weeks for paper filing).

Shanghai's online service platform

🌟Negative List Check

Not all industries are open to foreign investment. Before starting, verify that your intended business scope is not on the Special Administrative Measures (Negative List) for Foreign Investment Access (2026 Edition) , which currently has only 27 restricted/prohibited categories.

🌟Post-Registration Steps

After receiving the business license, you must complete tax registration, foreign exchange (SAFE) registration, and open a corporate bank account within 30 days.

In the past, document preparation was the most complex part of setting up an entity in China. However, since China acceded to the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (effective November 7, 2023), the process has become significantly simpler.

This guide breaks down the required documents into two main parts:

• Documents from the Foreign Shareholder
• Documents for the Proposed Local Entity

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1️⃣Documents from the Foreign Shareholder

These documents prove the legal existence, investment capacity, and authorization of the foreign shareholder. Under the Convention, the previous "dual legalization" (through the Chinese embassy/consulate) is replaced by a faster Apostille process, typically taking only 3-6 working days.

📚Certificate of Incorporation / Identity Proof

🏠If the shareholder is a foreign company: Provide the Certificate of Incorporation, Articles of Association (or equivalent), register of members/directors.
👨If the shareholder is a foreign individual: Provide a clear copy of their passport (must show entry records to China) or a Foreign Permanent Resident ID Card.
⚖️These documents must be notarized in their country of origin, then certified with an Apostille by the competent authority of the country.

🕰Apostilled documents are generally valid for 6 months.

📚Investment Resolution & Power of Attorney

**🏠**A board resolution from the foreign company authorizing the establishment of a subsidiary in China and appointing legal representatives/signatories.

⚖️This document also needs an Apostille. Ensure the signing officer has the authority per the company's bylaws to avoid rejection.

📚Bank Reference / Solvency Certificate

🏦A bank reference letter or recent bank statement from a recognized financial institution in the investor's home country, proving the capacity to inject capital.

⚖️The original document is preferred. Some local authorities may require this to be issued within the last 3 months.

📚Identity Documents

👨Copies of passports for the proposed legal representatives and directors.

🚩Certified Chinese Translation

✅All foreign-language documents must be accompanied by a Chinese translation by a licensed translation agency in China and stamped with their official translation seal.

❌Self-translation is generally not accepted.

Many overseas companies or individuals, when planning to enter the Chinese market, often ask the same question:

❓What type of entity should be established❓

Five types most common in China:

1️⃣Wholly Foreign Owned Enterprise (WFOE)

📚An enterprise established in China that is 100% owned by foreign companies or individuals. Most mainstream entity type currently.

👨The shareholder has complete independent authority in business decision-making. Profits can be distributed to overseas shareholders.

🚩Registered capital must be actually invested within five years of establishment.

💰Can conclude commercial contracts, issue VAT invoices and collect payments.

👷‍♀️Can normally recruit local employees.

🌍Businesses engaged in trade, e-commerce, manufacturing, consulting, general local service (e.g., English teaching, physical education, catering)

2️⃣Joint Venture (JV)

📚Chinese and foreign shareholders (company/individual) jointly establish a company.

👨Major decisions require the agreement of both parties, and profits should be distributed according to shareholding percentage.

🚩Registered capital must be actually invested within five years of establishment.

💰Can conclude commercial contracts, issue VAT invoices and collect payments.

👷‍♀️Can normally recruit local employees.

🌍Many industries with foreign investment restrictions adopt JV, such as healthcare services, finance, and some specialised areas of manufacturing (For example, the automobile manufacturing industry. Actually, policies have been adjusted in recent years. Tesla has already set up a wholly-owned factory in Shanghai).

3️⃣Branch

📚Just branch of a WFOE or JV. All legal and operational risks of a Branch should be borne by the WFOR or JV.

❌Foreign companies cannot directly establish a Branch in China.

🚩No need for registered capital.

💰Can conclude commercial contracts, issue VAT invoices and collect payments.

👷‍♀️Can normally recruit local employees.

4️⃣Representative office

📚A light entity that cannot conduct operational activities.

❌CANNOT conclude commercial contracts, issue VAT invoices or collect payments.

✅CAN only do market research, business liaison and brand promotion.

🌍Many overseas brands take Representative Offices as a preliminary test before entering the Chinese market.

5️⃣VIE

📚VIE is a special type of Red Chip structure. In many industries, foreign ownership is not allowed, then overseas companies choose to control a Chinese company via contractual arrangements.

🚩Internet service, Cloud service, AI, Media, etc.

💰Can conclude commercial contracts, issue VAT invoices and collect payments.

👷‍♀️Can normally recruit local employees.

🌍The construction of VIE structure is costly and is suitable for overseas financing and listing.