New rules for opening a company in China

From July 1, 2025, important changes in the legislation regulating the creation and operation of companies with foreign and Chinese participation came into force in China. These measures are aimed at increasing transparency, reliability and sustainability of business. However, they significantly changed the usual conditions for the registration of enterprises. In this article, we look at the key changes, their causes, and the implications for entrepreneurs working with China.

Major legislative changes

1. One legal address - one company

Previously, it was possible to register several legal entities at the same address – for example, in coworkings, incubators or virtual offices. Now,

• Each legal address can be linked only one company.
• For registration of a new company must be provided unique physical addressdocumented - lease agreement, property certificate or other official document.

What does that mean?

• Mass registration services for one address are no longer possible.
• The use of virtual addresses is now in most cases not registered with tax and industrial authorities.

2. Tightening of requirements for authorized capital

In the past, the company had a large share capital, but not actually introduce It was just an obligation unrelated to deadlines. Now the situation has changed:

• For Limited liability (including WFOE – 100% foreign companies) real contribution of authorized capital.
• Minimum threshold foreign companies - 5 million yuan (~$700,000)
• These funds must be introduced within 1-5 years depending on the industry, type of business and registration capital.
• The company should substantiate in the registration documents and follow this schedule.

What does that mean?

• You can no longer register a company on paper without a financial base.
• Failure to fulfill obligations on contributions to the authorized capital entails fines, freezing of activities, and in severe cases - liquidation of the company.

3. Tighter controls by banks and tax authorities

In addition to registering with local industry and commerce (AMR), banks and tax authorities now require:

• Confirmation of sources of authorized capital.
• Regular financial statements even at the capital waiting stage.
• Coordination of the address with the actual place of business.

Why did you make these changes?

China aims to:

• Eliminate shell-stock, which are used for cashing, evasion of taxes and violations of foreign economic legislation.
• Encourage real investment and serious business presence in the PRC.
• Raise reputation In the eyes of international partners as a controlled, fair market.

What should foreign entrepreneurs do?

Recheck legal addresses

If you have companies registered at a common address, you must:

• Or re-register them to different addresses.
• Or combine activities into one structure.

Prepare capital in advance

Need:

• Determine the amount of authorized capital.
• Get confirmation from a Chinese bank about the possibility of enrollment.
• Agree with the accountant the schedule of entry and its legal registration.

Only work with verified registrars

Now it's particularly important:

• Check the registration agent's license.
• Make sure that the legal address is real and not used by other companies.
• Receive confirmation of registration not only from AMR, but also from the tax office.

Alternatives and options

If you are not ready to make a large capital and open a full-fledged company, you can consider:

• Partnership with a Chinese company (through a contract or joint venture).
• Opening of a missionIt does not carry on commercial activities but allows you to stay in China.
• Rent a business room through local government-backed incubatorswhere a real address and tax support are provided (but only for a real office, not a paper company).

Opening a company in China has become a more strictly regulated but also fairer process. You can no longer play business, you have to show seriousness of intentions, capital and a real presence in the country. These changes are especially important for those making long-term plans in the Chinese market.

Contact of useful authorities

• Market Regulation Authority (AMR) - https://www.samr.gov.cn/
• China's State Tax Service - https://www.chinatax.gov.cn/
• SAFE (State Office for Foreign Exchange Control) - http://www.safe.gov.cn/

If you are planning to register a business in China and are not sure about the current requirements – It is recommended to consult a local accountant and lawyer.. Each province may impose its own regulations, especially with respect to the timing of capital deposits and rental requirements.