Key practical points:
• The most common form is the limited liability company (LLC); a joint-stock company suits larger ventures or those aiming for public listing.
• Registered capital is the amount shareholders commit to contribute, now under a subscription system with deadlines for paying it in.
• Every company has a legal representative who signs on the company's behalf and carries significant responsibility, so choose this person carefully.
• Shareholders own the equity, while a board or executive director manages the company, with internal oversight by supervisors.
• You can only operate once you obtain a business licence from the market registration authority.
• Many foreigners set up a wholly foreign-owned enterprise (WFOE) to keep full control of the venture.
• Companies must file annual reports and financial statements and keep proper accounting records.
🏢 Company setup
China's Company Law · Yalla China
中华人民共和国公司法 / Company Law of the PRC
📝 Overview
This law governs how companies are formed and run in China, including limited liability companies and joint-stock companies, and the roles of shareholders, directors, and the legal representative.
This is general information only, not legal advice. For your specific case, consult a licensed lawyer.
📜 The law text / key provisions
💬 Practical reading
💬 This is a general reading/opinion for orientation — not the official legal text nor legal advice.
For you as a foreigner, understanding the Company Law is your first step before starting any business in China, since it defines your company's structure and your responsibilities. Choosing the right legal form (often a WFOE) and a trustworthy legal representative will save you many problems later. Keep in mind that registered capital is not just a number on paper but a commitment you must actually pay in on schedule. Also stay on top of annual reporting so your company avoids fines or blacklisting. This is a general orientation, not formal legal advice.
📎 Official source
State Administration for Market Regulation / samr.gov.cn
🕒 Updated: 16 March 2026