Set up and run your company in mainland China

01 · ChinaMNC

Why China for Swiss founders

China is a large and diverse market, and Swiss companies tend to approach it with a long view. For precision manufacturing, industrial components, specialty chemicals, pharma and medtech, luxury goods, and business services, China is often both a customer market and a production or sourcing base. Many Swiss firms start with exports and distribution, then move to a local entity when they need to employ staff, invoice in renminbi, hold licences, or manage suppliers and customers directly.

A local company can make commercial sense when you want closer control over quality, service and intellectual property, or when your Chinese customers expect a local contracting party. It also helps with hiring, since a registered entity can sponsor work permits and pay social insurance.

At the same time, China is not one market. Regulations, incentives and approval practice differ between cities and provinces, and some activities are restricted or need specific licences. Swiss founders do well to define a narrow first scope, choose a city based on customers and talent rather than cost alone, and plan for a longer setup phase than in Switzerland.

02 · ChinaMNC

WFOE, joint venture or representative office

The three structures Swiss companies consider most often are the wholly foreign-owned enterprise (WFOE), the equity joint venture (JV), and the representative office (RO).

• WFOE: a limited liability company owned entirely by the foreign parent. It can conduct permitted business activities, hire staff, invoice customers and repatriate profits. Most Swiss SMEs that want to operate locally choose this route.
• Joint venture: a company shared with a Chinese partner. It can open doors to local networks, licences or land, but it requires careful shareholder agreements, governance rules and exit provisions. It suits larger or regulated projects more than a first market entry.
• Representative office: a liaison office that cannot earn revenue directly. It is limited to market research, liaison and quality control, and still needs registration and a chief representative.

Your choice depends on what you need to do: sign contracts, invoice, import, manufacture, hire, or simply maintain a presence. The business scope and licensing rules should be checked before you commit to a structure.

03 · ChinaMNC

The five-step registration process

The exact sequence and timing vary by city and activity, but most WFOE setups follow a similar path.

• Step 1 — Scope and city: define the business activities, choose the registered city and confirm whether your activity is permitted, restricted or requires a licence.
• Step 2 — Name and filing: reserve the company name and prepare the application package, including shareholder and legal representative details.
• Step 3 — Registration: submit to the local market regulation authority and obtain the business licence. Where a pre-approval is required, it comes first.
• Step 4 — Post-setup filings: arrange company seals, tax registration, bank account opening, foreign exchange registration and, where relevant, customs registration.
• Step 5 — Staffing and operations: register employees, arrange work permits and residence permits for foreign staff, and put accounting and compliance routines in place.

Document legalisation and translation often sit on the critical path, so start those early. Build in buffer time for approvals rather than relying on fixed deadlines.

04 · ChinaMNC

Documents Swiss companies usually need

Requirements differ by city and by entity type, but the core document set is fairly consistent.

• Parent company certificate of incorporation and current commercial register extract, legalised and translated into Chinese where required.
• Constitutional documents, such as articles of association, and shareholder resolutions approving the China investment.
• Passport copies of directors, legal representative, supervisors and authorised signatories.
• Proof of address for the parent company and for the proposed China registered address, usually a lease or property document.
• A description of the business scope, and any licence applications for regulated activities.
• Bank reference or financial information for the parent, where requested by the authority or bank.

Swiss documents often need notarisation, legalisation or an apostille, plus certified Chinese translation. Names and signatures should match consistently across all papers. Keep a single document checklist and version log, because small inconsistencies are a common cause of delays.

05 · ChinaMNC

Registered address and business scope

Every China company needs a registered address in the city of registration. This address appears on the business licence and is used by authorities for service of documents. Many companies use a serviced office or an address provided by a local incubator or agent. Landlords and providers differ in what they can support, and some districts have specific rules for certain activities, so confirm that the address is acceptable before signing.

The business scope defines what the company may do. It is written in standard Chinese categories and should cover your current activities without being so broad that it triggers extra scrutiny. Some activities need a pre-approval or a post-registration licence, such as certain food, medical, logistics or education-related operations.

If you plan to import or export, check whether customs registration and foreign trade operator status are needed. If you expect to change activities later, scope amendments are possible but take time and paperwork. A realistic scope from the start saves trouble.

06 · ChinaMNC

Banking, tax and visas

A China company needs a corporate bank account for renminbi operations and, where relevant, a foreign currency account. Account opening involves the bank's own due diligence, including checks on the parent company, shareholders and expected transaction flows. It can take several weeks, and banks may ask for supporting contracts or business plans. Keep your ownership structure clear and be ready to explain your business model.

Tax registration follows company setup. The main taxes include corporate income tax, value-added tax and, for employees, individual income tax and social insurance. Bookkeeping must be in Chinese accounting standards, and monthly or quarterly filings are normal. Many Swiss SMEs use a local accounting firm or a shared finance team rather than hiring immediately.

Foreign staff need a work permit and a residence permit. The process involves the employer, local labour and entry-exit authorities, and usually requires degree or experience evidence and a health check. Family members may apply for dependant permits. Start early, as document checks are detailed.

07 · ChinaMNC

Common mistakes to avoid

Most problems Swiss founders encounter are avoidable with better preparation.

• Choosing the city on cost alone: customers, talent, suppliers and district rules usually matter more than rent.
• Skipping legalisation and translation quality: weak document preparation is a frequent cause of rejected filings.
• Writing an unrealistic business scope: too broad invites questions; too narrow can block invoices later.
• Underestimating banking due diligence: prepare ownership and transaction explanations before opening an account.
• Treating China as one jurisdiction: approval practice and incentives vary by city and district.
• Ignoring intellectual property early: register trademarks and consider contracts before you go to market.
• Assuming German-language documents are accepted: Chinese filings need Chinese-language materials and certified translations.

A local adviser who understands both Swiss and Chinese practice can help you avoid these traps and keep the project on a realistic path.