Tap into China’s vast potential: Invest, grow, and thrive in Asia’s leading market.
China’s allure lies in its 1.4 billion+ consumers, a booming economy, and tech-driven innovation that’s reshaping global industries. Beyond sheer numbers, this nation is a manufacturing and digital powerhouse. With an economy projected to grow by 5% in 2025, China has vast market potential and exciting expansion opportunities.
However, businesses setting up operations here need a nuanced understanding of local regulations, language, cultural sensitivities, and the competitive landscape.
This guide details the process of registering a company in China, the associated costs, and how an Employer of Record (EOR) can offer a faster, simpler, and more cost-effective solution for hiring employees without setting up a local entity.
What makes China a great place to register your company?
Registering a company in China has numerous advantages that can drive growth and competitiveness.
- Unparalleled market potential: With over 1.4 billion potential customers, China presents a tremendous opportunity to expand your market reach.
- Established infrastructure: By leveraging China’s strengths, you can significantly optimize operations, increasing efficiency and competitiveness.
- Digitalization: China is a leader in technological advancements. Your business will access cutting-edge technologies and a thriving digital ecosystem here.
- State incentives and subsidies: The Chinese government offers various incentives, including tax breaks, subsidies, and support for specific industries, to attract foreign investment.
- Provision of specialized labor: China has a large pool of young, skilled labor across industries.
- Market credibility: Registering a local entity can enhance trust and credibility with Chinese consumers and business partners.
- Liaisons and market access: China’s various trade agreements can facilitate access to regional and global markets.
China’s market offers huge potential, but operating there involves complexities and compliance hurdles. An Employer of Record (EOR) simplifies expansion. You can use an EOR to hire employees legally.
The EOR will ensure complete compliance with Chinese employment laws, contracts, minimum wage policies, termination procedures, and other key regulations. The next section will explore how this option compares to traditional company registration.
Difference between standard company registration and expanding through an EOR
If you wish to register a company in China, you can either set up your entity with complete control—like a Wholly Foreign-Owned Enterprise (WFOE) or a Joint Venture (JV)—or partner with an Employer of Record (EOR).
Let’s understand the difference between the two
Aspect | Standard company registration (WOFE/JV) | Employer of record (EOR) |
Purpose | Establishes a legal presence for full operations in China. | Hire employees without setting up an entity. |
Control | Provides entire control over operations, hiring, and business decisions. | Limited control—EOR manages HR, payroll, and compliance. |
Cost | High setup and operational costs. | Lower cost—pay only for employment services and local compliance. |
Compliance | Must comply with strict Chinese tax laws, labor regulations, and reporting requirements. | EOR handles all legal and tax compliance. |
Setup time | Longer due to approvals, registrations, and licensing. | Fast-track entry, with hiring possible within days. |
Scalability | Requires significant investment to expand operations. | Quick and flexible hiring without long-term commitments. |
Setting up a legal entity in China can be complex, time-consuming, and costly. That’s why many businesses opt for an EOR, ensuring a faster, compliant, and hassle-free market entry.
How an EOR simplifies expansion into China
Compared with company registration, an Employer of Record (EOR) can be a swifter, low-risk, flexible way to expand your presence in China.
Here’s how an EOR helps:
- Streamlined setup: You avoid the intricate and lengthy entity registration, enabling faster entry into China.
- Cost savings: Reduce overhead costs associated with establishing and maintaining a local entity, including legal, accounting, and HR expenses.
- Compliance with local labor laws: Mitigate risks by adhering to China’s ever-evolving labor laws and avoid costly penalties.
- Workforce scalability: Easily scale your workforce up or down based on market demands, providing flexibility and agility.
- Risk mitigation: Minimize legal and compliance risks by relying on the EOR’s expertise in navigating China’s regulatory landscape.
Compared to using an EOR, company registration is a complex, multi-step process that requires careful planning and adherence to local regulations. Here’s a step-by-step breakdown of what it takes to register a company in China.
China company registration: your complete procedural guide
Registering a company in China may seem complex, but a structured, step-by-step approach simplifies the process. From selecting the right business structure to completing registration, each stage paves the way for compliance and long-term success.
1. Choose your entity
China offers different entity types, each with varying levels of control and regulatory requirements:
- Wholly Foreign-Owned Enterprise (WFOE): Full ownership and control, ideal for long-term operations.
- Joint Venture (JV): Requires a local partner, often needed for restricted industries.
- Representative Office (RO): Limited to market research and non-revenue-generating activities.
2. Reserve company name
Register a unique company name with China’s State Administration for Market Regulation (SAMR). The name must follow Chinese naming conventions and cannot duplicate existing businesses.
3. Submit paperwork
Commonly required documents are:
- Business scope and structure details
- Articles of Association (AOA)
- Identification documents of shareholders and legal representatives
- Lease agreement for a registered office address
All the documents above must be notarized, translated into Chinese, and approved by relevant authorities.
4. Secure license
Once approved, the SAMR issues a business license, allowing you to legally operate in China. This step will usually take a few weeks.
5. Tax registration and permits
You must register with the State Taxation Administration (STA) for VAT, corporate income tax, and other tax obligations. Depending on your industry, you may require permits or additional licenses.
6. Bank account setup
You need a Chinese corporate bank account for financial transactions, payroll, and tax payments. Some providers, like digital banks and international banking solutions, can ease this process.
7. Establish payroll
Chinese labor laws require strict adherence to social security contributions, employment contracts, and local labor regulations. Payroll solutions can help automate salary payments and compliance.
Now that you know how to set up in China, let’s talk about how costly the process can be.
Unveiling the real costs of company registration in China
Planning your expansion into China requires a clear understanding of the associated costs. From initial setup fees to ongoing operational expenses, budgeting accurately can help avoid unexpected financial burdens.
1. Registration
- Company name registration: Free or minimal administrative fee
- Business license application: Typically ranges from ¥500 to ¥1,000, depending on the type and location of the business
- Company chop creation: As low as $5 for basic materials to over $100 for high-end materials.
2. Government & Legal Fees
- State fees & approvals: Varies based on business type and sector.
- Notary & translation fees: ¥500–¥2,000 per document.
- Legal advisory: Depending on complexity
3. Capital & banking requirements
- Minimum share capital: Varies by industry; WFOEs often require RMB 300,000 and RMB 500,000
- Corporate bank account setup: Costs vary depending on the bank and account type.
4. Annual maintenance
- Business license renewal: Generally, Chinese business licenses do not need yearly renewal, though some sectors or areas have exceptions.
- Accounting & compliance: RMB 60,000 to RMB 200,000 per year for financial reporting
- Office address renewal: (RMB 60,000 to RMB 300,000)-Actual costs can vary significantly.
5. Tax & payroll obligations
- Corporate income tax: 25% standard rate (varies for SMEs and incentives)
- VAT and Compliance: 6%–13% VAT, depending on business activities
- Employee social security contributions: Rates can vary depending on the city or region.
Setting up a business in China comes with unpredictable costs, but with Multiplier’s EOR, everything is easier. You pay one fixed monthly fee per employee—no setup costs, hidden legal fees, or compliance headaches.
Standard registration vs. EOR: Cost comparison
This comparison breaks down the real costs, illustrating the difference between a standard registration process and an Employer of Record (EOR), and the operational implications they create.
Cost aspect | Standard registration | Employer of Record (EOR) |
Setup fees | ¥50,000 to ¥200,000 | No setup costs |
Share capital | Required (Varies by industry) | Not required |
Legal and compliance | Too high for legal services & documentation | Included in the EOR fee |
Accounting | Separate (Local accountants, audits) | As a part of the monthly fee |
Notary and translation | ¥3,000–¥10,000 | Included in the EOR fee |
Time to market | Several months | Within weeks |
Government fees & taxes | Corporate tax (25%), VAT (6–13%), Social security (incentive may apply) | Taxes apply, but EOR handles filing & compliance |
Note: The costs above are indicative and may vary based on your business needs. Talk to our experts at Multiplier. They’ll know the latest regulations and can give you a precise estimate tailored to your business vertical.
Companies should opt for traditional company registration if they need complete operational control, a recognized legal presence, or must generate invoices or hold assets in China.
However, if they need to hire and grow teams swiftly, an EOR is a better option, especially a reliable, robust solution like Multiplier.
Seamless expansion into China—Multiplier’s EOR simplifies every step
Say goodbye to the complexities of managing multiple payroll systems, navigating international labor laws, handling tax regulations, and dealing with currency conversions. Multiplier’s Employer of Record ensures effortless compliance and efficient employment administration.
Why Choose Multiplier’s EOR?
- In-country hiring expertise. Hire confidently in China with an EOR trusted by companies of every size.
- Seamless payroll. Multiplier ensures accurate, transparent payroll processing while complying with China’s labor laws.
- All-in-one HR. Our all-in-one platform is intuitive and easy to use. Manage onboarding, expense tracking, and leave management, all in one place.
- Compliance check. Our experts handle labor laws, tax codes, and evolving regulations.
- Competitive benefits. We help you tailor competitive, compliant benefits to help you attract and retain China’s top talent.
- Reliable support. Get dedicated customer support backed by top-tier security certifications.
- Book a Demo and learn how Multiplier can uncomplicate your global hiring.
