Foreign investors establish WFOEs (wholly foreign-owned enterprises) in most sectors via MOFCOM-filing-based registration: negative-list sectors require JV or approval. Timeline 2-6 weeks for a standard WFOE; capital requirements are largely liberalized.
Basics: (1) WFOE structure: 100% foreign ownership allowed outside the negative list (2021 national version — restricted items remain in media, education, some telecom/finance). (2) Process: name approval → registration with SAMR (market regulator) → chops → bank account → tax registration → social insurance/housing fund accounts. (3) Registered capital: no minimum for most sectors; subscribe within a stated term (5-year paid-up rule since 2024 Company Law). (4) Post-setup: VAT general taxpayer status as needed, invoice system (fapiao) setup, annual MIS report by June 30. (5) Repatriation: dividends after CIT clearance with 5-10% treaty WHT typically. (6) Hong Kong holding company above the WFOE remains the standard for exit flexibility and treaty access.
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