Set up and run your company in mainland China

01 · ChinaMNC

Why China for Dutch founders and companies

China is not a single market but a collection of regional economies, each with its own industrial strengths and consumer patterns. For Dutch companies, the opportunity often lies in combining Dutch strengths—design, engineering, agri-food, logistics, sustainability—with China’s manufacturing depth and growing domestic demand.

Key reasons Dutch founders consider mainland China:

• Market access: A large and increasingly sophisticated consumer base, especially in tier-1 and tier-2 cities.
• Supply chain: Proximity to component suppliers, contract manufacturers and logistics hubs.
• Innovation ecosystem: Clusters in sectors such as e-mobility, life sciences, renewable energy and digital services.
• Trade links: Strong Netherlands–China trade relationships and direct air and sea connections.

At the same time, China requires local presence, patient relationship-building and a clear understanding of regulatory requirements. A well-structured entity and realistic operating plan are essential. This page outlines the practical steps to register and operate a company in mainland China, with a focus on the decisions Dutch founders face most often.

02 · ChinaMNC

WFOE, joint venture or representative office?

The right legal structure depends on your activities, risk appetite and long-term commitment. Most Dutch companies choose one of three options:

• WFOE (Wholly Foreign-Owned Enterprise): A limited liability company wholly owned by foreign investors. It can conduct approved business activities, invoice customers, hire staff and repatriate profits. This is the most common structure for companies that want to trade, manufacture or provide services in China.
• Joint venture (JV): A partnership with a Chinese entity, often used where local knowledge, licenses or distribution are critical. JVs require careful negotiation of governance, profit sharing and exit mechanisms.
• Representative office (RO): A non-profit liaison office that cannot engage in direct business activities. It is suitable for market research and coordination but not for invoicing or revenue generation.

Your choice should reflect your business scope, sector restrictions and tax position. Some sectors remain on the negative list for foreign investment, so confirm your activity is permitted before proceeding. For many Dutch SMEs, a WFOE offers the most control, while a JV can make sense for regulated sectors or large-scale local partnerships.

03 · ChinaMNC

Five-step registration process

Registration in mainland China typically follows a sequence of approvals and filings. The exact steps vary by city and business scope, but the core process is as follows:

• 1. Name pre-approval and scope check: Reserve your company name and confirm that your intended business scope is permitted for foreign investment.
• 2. Prepare and notarise documents: Articles of association, investor documents and proof of address must be prepared, often notarised and legalised (or apostilled) in the Netherlands.
• 3. Submit for business licence: File with the local market regulation authority (AMR) to obtain the business licence, which is the foundation of your legal existence.
• 4. Post-licence registrations: Complete tax registration, customs registration if applicable, and foreign exchange registration.
• 5. Bank account and capital injection: Open a corporate bank account and inject registered capital in line with your articles and applicable rules.

Each step involves local requirements that can differ between cities. Working with local professional advisers helps you anticipate document legalisation, translation and filing details, reducing the risk of delays.

04 · ChinaMNC

Documents you will need

Document requirements for a WFOE or JV are detailed and must be prepared carefully. While specifics depend on your structure and location, Dutch investors typically need:

• Investor documents: Certificate of incorporation, articles, and a register of directors/shareholders for the Dutch parent company.
• Notarisation and legalisation: Corporate documents usually need notarisation in the Netherlands and legalisation by the Chinese embassy or consulate, or apostille where applicable.
• Proof of address: A lease or ownership document for the registered office in China.
• Articles of association: The Chinese company’s articles, aligned with PRC company law and your business scope.
• Director and legal representative details: Passport copies and appointment documents.
• Bank reference and financials: Some banks and authorities may request parent company financials or a bank reference letter.

Translations into Chinese are generally required, and consistency across documents is critical. Missing or inconsistent paperwork is a common cause of delays. Build time for document preparation into your plan, and confirm the latest requirements with your local adviser before submission.

05 · ChinaMNC

Registered address and business scope

Two foundational choices shape your registration: where you register and what activities you declare.

Registered address: You need a physical address in China that satisfies local requirements. Many companies use a serviced office or a registered address provider, but some cities require the address to match actual operations or to meet specific zoning rules. The address affects your tax jurisdiction and may influence access to incentives.

Business scope: Your business scope defines the activities your company is permitted to conduct. It must align with China’s foreign investment rules and the negative list. Overly broad scopes can trigger additional approvals; overly narrow scopes can restrict invoicing and hiring. For Dutch companies in trade, manufacturing or services, the scope should reflect both current activities and realistic near-term expansion.

Local authorities may require supporting documents for certain activities, such as licenses for food, logistics or education. Consider your longer-term plans when drafting the scope, but avoid listing activities you do not intend to pursue. A local adviser can help calibrate the scope to your sector and city.

06 · ChinaMNC

Banking, tax and visas

Banking: Corporate bank account opening in China can take time and involves due diligence on your parent company and beneficial owners. Banks may ask for business rationale, contracts and translated documents. Once open, the account supports RMB operations and foreign exchange transactions, subject to China’s foreign exchange rules.

Tax: Chinese companies are subject to corporate income tax, value-added tax and other levies depending on activity. Tax registration is part of the post-licence process. Dutch companies should review withholding tax, transfer pricing and treaty benefits under the Netherlands–China tax treaty with a qualified adviser. Compliance obligations include monthly or quarterly filings and annual reporting.

Visas and work permits: Foreign staff need a work permit and a residence permit to work legally in China. The process typically involves a foreigner work permit notice, a Z visa, and post-entry registration. Dutch nationals should also check the latest visa and entry requirements before travel. Allow time for document legalisation and medical checks where required.

07 · ChinaMNC

Common mistakes to avoid

Many entry challenges are predictable. Dutch founders can reduce risk by watching for these common issues:

• Underestimating document formalities: Notarisation, legalisation and translation take time. Incomplete documents are a frequent cause of delay.
• Choosing the wrong entity: A representative office cannot invoice; a JV without clear governance can create deadlock. Match structure to strategy.
• Ignoring the negative list: Confirm your business scope is open to foreign investment before committing to a location or lease.
• Weak local address compliance: Address requirements vary by city; a non-compliant address can block registration or later inspections.
• Underplanning tax and banking: Bank due diligence and tax registrations are not formalities—they affect your ability to operate and repatriate funds.
• Assuming Dutch contracts suffice: China operations require Chinese-law documents, local employment contracts and compliance with PRC rules.

A realistic timeline, local professional support and a clear operating plan will help you avoid these pitfalls and build a solid foundation for your China entity.