Doing Business in China as a Foreigner

Starting or managing a business in China as a foreigner is both exciting and complex. This guide breaks it down and helps you understand how to navigate the process smoothly.

1. Can Foreigners Start a Business in China?

Yes! Foreigners can legally register and operate businesses through structures like:

  • Wholly Foreign-Owned Enterprise (WFOE)

  • Joint Venture

  • Representative Office

Most expats prefer a WFOE for full control.

 


2. Choosing the Right Business Type

Popular options for foreigners:

  • Consulting & education services

  • Sourcing, logistics, and trade

  • Food & beverage

  • E-commerce & digital marketing

  • Manufacturing

 

Make sure your industry is on China’s “encouraged” or “permitted” list.

 


3. Steps to Register a Business

  1. Decide on your business scope and name

  2. Find a physical address for your office

  3. Apply for business license

  4. Register for taxes and get your company seal

  5. Open a business bank account

  6. Apply for work permits if hiring foreigners

 

Tip: Use service providers like Ubuntu Consult or others listed on Hafrik for support.

 


4. Challenges to Expect

  • Language barrier (contracts, regulations are in Mandarin)

  • Local bureaucracy

  • Bank processes can be slow

  • Internet restrictions

  • Licensing for food, health, or trading industries can be strict

 


5. Key Business Apps & Tools

  • WeChat Business

  • Alipay Business Account

  • 1688 & Taobao for sourcing

  • QCC for company lookups

  • Hafrik Business Pages to promote your brand to other foreigners

 


6. Understanding Taxes & Accounting

  • Hire a licensed accountant (monthly filings required)

  • Keep proper records

  • Common taxes: VAT, income tax, corporate tax

  • Most small businesses pay VAT around 3–6%


7. Build Guanxi (关系)

“Guanxi” means connections.

  • Build relationships with local suppliers, clients, and community leaders

  • Show respect for local customs and business etiquette

  • Attend networking events and business expos

 


Final Advice:

Don’t go in blind. Learn the system, stay legal, and use local knowledge and partners to your advantage. China rewards persistence, respect, and innovation — if you’re ready, Hafrik is here to support you all the way.

 


 


 

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