Subsidiaries in China or Foreign Invested Enterprises (FIEs) as they are known, are preferred business forms by foreign investors who want a flexible and independent structure, with 100% ownership of the share capital by the parent company. Our experts in company formation in China can offer assistance in establishing a subsidiary in China.
| Quick Facts | |
|---|---|
| Applicable legislation (home country/foreign country) | China Company Law |
Best used for | – IT&C, – manufacturing – automotive, – R&D, – trading |
Minimum share capital | Depending on the selected city for subsidiary |
| Time frame for the incorporation (approx.) | Around 8 months |
| Management (local/foreign) | Local |
| Legal representative required | Yes |
| Local bank account | Yes |
| Independence from the parent company | Yes |
| Liability of the parent company | No, the subsidiary is fully liable |
| Corporate tax rate | 25% |
| Possibility of hiring local staff | Yes |
Table of Contents
What are the features of a subsidiary in China?
Our consultants, specialized in company formation in China, present the main characteristics of the subsidiary:
- subsidiaries in China may act in accordance with the rules and regulations of the parent company, but they can operate on the Chinese marketunder a different name;
- to directly do business in China’s performant sectors under a legal entity like the subsidiary, a business license is mandatory;
- the owner of a subsidiary in China has legal powers to appoint the board of directors and impose their liabilities;
- as for the company registration of a subsidiary in China in 2026, one must confirm the documents and the information about the parent enterprise, the share capital, and the purposes of such an entity.
How can subsidiaries be registered in China in 2026?
Subsidiaries in China are also known as Foreign Invested Enterprises which can be registered by at least one foreign investor. The incorporation procedure is the same as for WFOEs in China (wholly foreign owned enterprises), with respect to the Companies Act. Let’s review some business regulations in this matter:
- There are certain sectors in which subsidiaries are not allowed to activate, such as telecommunications – in this matter, a joint venture is recommended, meaning that a company can be established by a local and a foreign investor.
- Opening a subsidiary in China in 2026 requires complete attention and guidance – you can rely on the support and assistance offered by one of our specialists in company formation in China;
- as subsidiaries are considered private corporations in China, owners can enjoy different policies, benefits, and programs to cut the amount of taxes, as such, the corporate income tax is set at 25% or less, but other taxes can be lowered or even eliminated.
Do I need to arrive in person in China to register a subsidiary?
No, the legislation on company formation in Chinaallows foreigners to register a company without being present in the country during the incorporation formalities. This can be achieved by requesting legal representation from an entrusted party, such as our consultants specialized in company registration in China.
Here is an infographic with details about subsidiaries in China:
What are your current fees?
Our company registration fees for a wholly foreign owned company are $1,200. If you plan to incorporate the subsidiary in the region of Guangzhou, our fees are $1,000.
How long does it take to incorporate a subsidiary?
It can take around 5 to 8 business days.
Are there any sectors in which I can’t set up a subsidiary?
While foreign investors are welcomed to establish a subsidiary in China in the majority of the industries available on the local market, please know that there are some limitations when we refer to industries related to national security.
How are subsidiaries controlled in China?
Subsidiaries in China are managed by a board of directors which is established at the time of company incorporation. This is also available for subsidiaries set up by only one stockholder.
Here is a video that explains the rules and regulations of setting up a subsidiary in China:
Can the subsidiary have a different name from the parent company?
Of course, according to theCompany Law in China, subsidiaries may operate under a different name than the company originating in a foreign country.
Can the subsidiary be wholly owned by a foreign entrepreneur?
Of course, 100% ownership is the main advantage for subsidiaries in China. This means that entrepreneurs benefit from a flexible structure, but also complete control over the activities and direction of the respective subsidiary.
Can a subsidiary have other activities than those of the parent company?
Yes, this option is valid for Chinese subsidiaries and this is a major advantage for this type of business structure.
Is VAT registration required for a subsidiary in China?
Yes, subsidiaries in China must be registered for VAT in this country. We remind you that the standard VAT in China is 13% for all taxpayers. Lower VAT rates are imposed under certain conditions.
Can I own more subsidiaries in China?
Yes, foreign investors can register more wholly owned companies.
Can you help me incorporate a subsidiary elsewhere?
If you want to establish a subsidiary in another country, such as Canada, we can put you in touch with our local partners from Bridgewest Canada. They can help you open a company in Canada in just one day.
Please contact our team of advisors if you are interested in setting up a company in Chinaand particularly a subsidiary in 2026.
