In the context of ongoing U.S.-China trade tensions, characterized by high U.S. tariffs on Chinese imports as of April 2025, establishing a company in China offers foreign investors a strategic pathway to bypass these barriers and directly access China, the world’s second-largest market. Foshan, our location, a dynamic manufacturing hub in the Greater Bay Area of Guangdong Province, exemplifies an ideal location with its business-friendly policies and proximity to global trade routes. This guide details the process of setting up a Wholly Foreign-Owned Enterprise (WFOE) in China, using Foshan as a case study, covering procedures, costs, and required documents to empower businesses to thrive in China’s vast market.

Types of Companies in China

Before starting, foreign clients should understand the main types of foreign-invested enterprises (FIEs) under China’s Foreign Investment Law:

1. Wholly Foreign-Owned Enterprise (WFOE)
   • Fully owned by foreign investors, ideal for independent operations.
2. Sino-Foreign Joint Venture (JV)
   • Established with a Chinese partner, suitable for businesses needing local resources or market access.
3. Representative Office (RO)
   • Limited to market research or liaison activities, not allowed to conduct direct business.

This article focuses on the WFOE, the most common choice for foreign clients.

Step-by-Step Setup Procedure

Setting up a WFOE in China, including in Foshan, involves a standardized yet detailed process. Below are the key steps, with Foshan-specific details where applicable:

1. Pre-Approval of Company Name
   • General: Choose a compliant name (e.g., “City + Company Name + Industry + Co., Ltd.”) and submit it to the local Administration for Market Regulation (AMR). Provide 3-5 options to avoid duplicates.
   • Foshan: Submit via the Guangdong AMR online platform. Example: “Foshan XYZ Trading Co., Ltd.”
   • Duration: 3-5 working days.
2. Filing for Establishment
   • General: Submit the setup application, including scope of business (e.g., “technology development, import/export”) and registered capital, to the AMR.
   • Foshan: visit the AMR of Chancheng, Foshan (EN address: 1F, Building 3, Zhihuixincheng, 28 Jihuayi Road, Chancheng, Foshan; CN address: 广东省佛山市禅城区季华一路28号三座1层; Tel: 0757-82346391). Read more at: 外商投资有限责任公司设立登记-广东政务服务网.
   • Duration: 1-2 working days.
3. Obtaining a Business License
   • General: Receive the license post-approval.
   • Foshan: Collect from the Foshan AMR.
   • Duration: 1-2 working days after approval.
4. Company Seal Registration
   • General: Register and engrave seals (company, financial, legal representative) at a Public Security Bureau-approved vendor.
   • Foshan: Use authorized shops around the AMR.
   • Duration: 1-2 working days.
5. Opening Bank Accounts
   • General: Open a basic account and a foreign exchange account for capital injection and operations. The representative must be present.
   • Foshan: Choose banks like Bank of China (Foshan Branch) or ICBC (Foshan Branch).
   • Duration: 1-2 working days.
6. Tax Registration
   • General: Register with the local tax bureau and determine VAT taxpayer status if needed.
   • Foshan: Visit district tax offices, e.g., Chancheng Tax Bureau at Huabao South Road.
   • Duration: 1-2 working days.
7. Additional Permits (if applicable)
   • General: Obtain industry-specific licenses (e.g., for food, medical devices, or manufacturing).
   • Foshan: same.
   • Duration: Weeks to months, depending on the industry.

Total Duration: With complete documentation, the process takes 2-3 weeks, though timelines may vary slightly by region and industry.

Required Documents

Setting up a WFOE requires the following documents, applicable across China and in Foshan (foreign documents must be notarized, authenticated, and translated into Chinese):

1. Request form
   • Fill out this form with your company details and use this example to help you complete it.
2. Proof of Foreign Investor Identity
   • Individual: Copy of passport (notarized + consular authenticated, or apostilled; unless the person enters China on a legal visa).
   • Company: Business license or certificate of incorporation (notarized and authenticated, or apostille).
3. Pre-Approval Notice of Company Name
   • Issued by the AMR (Foshan AMR for local applications).
4. Articles of Association
   • Outlines company name, registered capital, scope of business, and governance structure.
5. Lease Agreement
   • Proof of a registered office with property ownership documents.
   • Foshan: Suggested areas include Chancheng, Nanhai, Shunde, or Foshan High-Tech Zone.
6. Appointment Letter of Representative
   • Designation of the responsible person (representative, director, supervisor, and manager) with ID proof.

Note: In Foshan, documents are submitted to the Foshan AMR, with possible additional filings to the commerce department. For more details, please visit Foshan AMR’s official guidline.

Cost Breakdown

Costs for setting up a WFOE depend on location, industry, and scale. Below is a general estimate, with Foshan-specific ranges (in RMB):

1. Government Fees
   • Name approval: Free.
   • Business license: Free (~50 RMB printing fee).
   • Seal engraving: 100-300 RMB.
2. Registered Address Costs
   • General: Tier-1 cities charge 5,000-20,000 RMB/month; smaller cities are cheaper.
   • Foshan: Chancheng (2,000-5,000 RMB/month) depending on the size. Virtual addresses (if allowed): 3,000-8,000 RMB/year.
3. Service Fees
   • Professional agents (lawyers, consultants): 5,000-20,000 RMB.
4. Registered Capital
   • Minimum recommended: 30,000-500,000 million RMB (subscription system, no upfront payment).
   • Foshan: Align with business scale to ensure credibility.
5. Bank Account Fees
   • Free, varying by bank.
6. Miscellaneous Fees
   • Notarization+authentication (or apostille), translation: 1,000-5,000 RMB.
   • Tax registration/compliance: 1,000-3,000 RMB.

Total Estimated Cost: Excluding capital payment, initial costs range from 10,000-30,000 RMB nationwide, with Foshan typically at 15,000-40,000 RMB due to lower rental costs.

Key Considerations for Success

• Registered Capital Planning: Set a realistic amount to balance credibility and tax obligations.
• Language Barrier: Most documentation is in Chinese; translators or agents are essential.
• Professional Help: Engage local lawyers or consultancies to navigate Chinese-language procedures.
• Compliance: Post-setup, file annual reports and adhere to tax/labor laws.
• Regional Variations: While Foshan’s process aligns with national standards, cities like Shanghai may have higher costs but more mature ecosystems. Free Trade Zones (not applicable in Foshan) offer additional incentives elsewhere.
• Industry Permits: Manufacturing or regulated sectors require extra approvals, so plan timelines accordingly.

Conclusion

Setting up a company in China, exemplified by Foshan, opens doors to a dynamic market with vast potential. Foshan’s manufacturing prowess, strategic location, and supportive policies make it an ideal base for foreign businesses. By following the outlined procedures, preparing the necessary documents, and budgeting for costs, you can establish your WFOE efficiently. For tailored assistance, contact the Foshan Commerce Bureau or professional legal services to ensure a seamless start to your business journey in China.