Setting up a Local Company in China: What International B2B Companies Need to Know

April 17, 2023
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China is the largest market in the world for technological equipment, and for international B2B companies looking to expand their business, it can be an incredibly attractive destination. However, setting up a company in China can be a complex process, with a range of legal, regulatory, and administrative challenges to navigate. In this article, we will provide an overview of the key considerations for international B2B companies looking to establish a wholly foreign-owned enterprise (WFOE) in China. We will also outline the ways in which the PTL GROUP team in China can help companies through this process.

The Basics of WFOE Setup in China

Before we dive into the specifics of WFOE setup in China, it’s important to understand what a WFOE is. Essentially, a WFOE is a limited liability company that is 100% owned by one or more foreign investors. This means that the foreign investors have full control over the company’s operations, and the company is treated as a Chinese entity for tax and regulatory purposes. In China, WFOEs are commonly used by foreign investors who want to set up a trading or manufacturing presence in the country.

The process of setting up a WFOE in China can be broken down into several key steps:

Determine the scope of your business: Before you start the WFOE setup process, you need to decide on the scope of your business in China. This includes determining what products or services you will offer, the industry and should include specifics even of technology and types of products. It’s important to do your research on the local market and understand the competition and regulatory landscape.

Choose a business structure: Once you have determined the scope of your business, you need to choose a business structure. In China, there are several different business structures available to foreign investors, including WFOEs, joint ventures (JV), and representative offices. Each structure has its own advantages and disadvantages, so it’s important to choose the structure that best fits your business needs.

Register your company: Once you have chosen a business structure, you need to register your company with the relevant Chinese authorities. This involves submitting a range of documents, including your business license, articles of association, and tax registration certificate. The process of company registration in China can take several months, so it’s important to plan accordingly.
Read more in the Regulations Guide to WFOE Establishment, Registration & Liquidation

Obtain relevant licenses and permits: Depending on the nature of your business, you may need to obtain additional licenses and permits from the Chinese authorities. For example, if you are setting up a manufacturing business, you will need to obtain a business license from the Ministry of Industry and Information Technology.

Open a bank account: Once your company is registered, you need to open a bank account in China. This will allow you to conduct business and receive payments in RMB. A WFOE can open several types of bank accounts, including RMB accounts, foreign currency accounts, and capital accounts. However, to open a bank account in China, a WFOE must present several documents, such as its business license, organization code certificate, tax registration certificate, and identification documents of the company’s legal representative. Local banks may offer faster and easier account opening, but may have limitations on foreign currency transactions. Read more about a WFOE’s Bank Accounts

Hire employees: Finally, you need to hire employees to staff your WFOE. This can be a complex process in China, as there are strict labor laws and regulations that you need to comply with.


How PTL GROUP can help

Setting up a WFOE in China can be a complex and time-consuming process, but the PTL GROUP team in China is here to help. We offer a range of services to international B2B companies looking to establish a local presence in China.

Company Registration Services

Our China company registration service includes a full range of services to help you set up your WFOE in China. We can help you determine the scope of your business, choose the right business structure, and prepare all of the necessary documents for business registration in China. Our team of experts will guide you through the entire process, from start to finish, ensuring that your WFOE is set up correctly and efficiently.

Employer of Record Services

In addition to our China business registration services, we also offer an employer of record in China. This means that we can act as your local employer, taking care of all payroll, tax, and HR-related matters on your behalf. This can be a great option for companies that are not yet ready to establish a local entity in China, but still need to hire employees to develop their business activities. Our employer of record services ensure that you remain compliant with all relevant Chinese labor laws and regulations, and allow you to focus on growing your business in China. Read more about HR services in China

Operational Support for Registered Entities

Once your WFOE is up and running, we can also provide operational support services to help you manage your business in China. This includes a range of services, such as accounting and bookkeeping, tax compliance, HR services, and trading support. Our team of experts has a deep understanding of the Chinese business environment and can help you navigate the complexities of doing business in China.


Setting up a WFOE in China can be a daunting process, but with the right support, it can also be a highly rewarding one. By setting up a local company in China, international B2B companies can tap into the enormous potential of the Chinese market, and gain a competitive edge over their rivals. At PTL Group, we are committed to helping international B2B companies succeed in China. Our range of services can help you navigate the complexities of WFOE setup, and ensure that your business is set up for growth in the Chinese market.

Ready to take the first step towards setting up your WFOE in China?

Contact PTL Group today to learn more about our company registration, employer of record, and operational support services. Click here to learn more:  and don’t hesitate to contact us. Our team is always happy to help.

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