How to Set Up a Trading Company in China
A foreign investor can set up a trading company in China as a wholly foreign-owned limited company in most open wholesale and retail activities. The business licence is not the trading right. You can import and export in the company name only after the business scope includes import and export, customs registers the company as a consignor and consignee, and the bank and tax registrations that follow are in place.
This guide covers the entity, the scope wording that customs actually reads, the registration sequence that replaced the old foreign trade operator filing, and the product licences and tax points that decide whether the first shipment clears.
What a China trading company is
In practice, most foreign investors use a wholly foreign-owned enterprise, still called a WFOE, structured as a foreign-invested commercial enterprise, or FICE. It is a Chinese limited liability company. The shareholder can be a foreign individual or an overseas company. Wholesale and retail distribution are generally outside the foreign investment negative list, so 100 percent foreign ownership is available for ordinary goods trading. Tobacco is the clear sector exception. Product rules still apply to food, cosmetics, medical devices, publications, and online sales of drugs and devices.
A representative office is not a substitute. It cannot issue invoices, import in its own name, or hold import-export rights. A joint venture is relevant when a negative-list cap or a partner asset forces shared equity, not because trading itself requires a Chinese shareholder.
If the shareholder documents, address, and apostille path are still open, start with what a WFOE is and the WFOE setup guide.
Why business scope decides the trading right
Business scope, jingying fanwei, is printed on the licence. Customs, the tax bureau, and the bank all read it. For a trading company it normally needs some combination of the following:
- Wholesale, if you sell to other businesses.
- Retail, if you will sell to consumers, including a later online store. Companies that draft only wholesale often have to amend before they can open a store.
- Import and export of goods, and of technology if that is part of the model.
- Commission agency, if the company will act for the group rather than buy and resell on its own account.
- Named product categories where the local office expects them, especially food, cosmetics, and medical devices.
Without import and export in the scope, the company cannot register with customs as a consignor or consignee. Amending scope later means a change filing with the State Administration for Market Regulation, updated articles of association, and a wait before customs and tax records catch up. Include categories you can already see coming.
Import-export rights in the current rules
There is no separate foreign trade operator certificate to collect before customs. On 30 December 2022 the National People’s Congress deleted the filing requirement in the Foreign Trade Law, and local commerce departments stopped accepting those filings from the start of 2023. The revised Foreign Trade Law, adopted on 27 December 2025 and effective on 1 March 2026, did not bring the filing back. A company no longer needs that old commerce filing to apply for import or export licences, technology contract registration, or quota allocation.
What remains is a sequence, not a single permit:
- A business licence whose scope includes import and export of goods or technology.
- Customs registration with the General Administration of Customs as a consignor and consignee of imported and exported goods. The customs code is tied to the unified social credit code. Declarations can then be filed in the company name.
- China Electronic Port enrollment and an account on the China International Trade Single Window. Most declarations run through these systems, and they usually follow customs registration.
- Foreign-exchange arrangements at the designated bank for import payments and export receipts.
- VAT general taxpayer status, then separate registration for export refunds if the company will export.
Plan the first arrival against the customs code, not the licence date. Local processing times vary. Food, cosmetics, and medical devices add their own approvals and can stretch a file well past a plain trading setup. The licence-stage steps themselves are covered in the WFOE registration process.
Company rights and goods licences are different questions
Holding import-export rights does not clear restricted goods. The Ministry of Commerce and customs run parallel catalogues: import licences for restricted goods, automatic import licences for monitored goods, export licences for controlled commodity categories, and dual-use licences for items with a possible military use. The export catalogue has been the fastest moving, including expanded coverage of steel, rare earths, and electric vehicles. Screen the HS code before you lock the scope.
Imported food still needs overseas manufacturer registration with customs and an importer filing. Cosmetics and medical devices need registration or filing with the National Medical Products Administration. Those clocks start with the product, not with the company name reservation.
Capital, tax, and the first-year economics
There is no general statutory minimum registered capital for a trading company. The binding rule is the revised Company Law: subscribed capital must be paid in within five years of incorporation, on the schedule written into the articles. Banks and customs still read the figure against first-year purchasing and working capital. An inflated number is a funding obligation, not a credibility trick. In active filing practice, trading scopes are often set higher than consulting scopes, commonly in a band around RMB 500,000 to 1,500,000, and higher again where inventory or bonded stock is real. That is a commercial range, not a legal floor. Setup cost bands sit in the WFOE registration cost breakdown.
| Item | What applies |
|---|---|
| Import duty and import VAT | Assessed at the border on customs value. Import VAT on goods is generally 13 percent and is recoverable as input VAT once the company is a general taxpayer. |
| Domestic VAT | Sales of goods inside China generally carry 13 percent output VAT. The VAT Law took effect on 1 January 2026. |
| Export refund | State Taxation Administration Announcement No. 5 of 2026, effective 1 January 2026, replaced the 2012 measures. Rates stay product-specific. |
| Photovoltaic and batteries | From 1 April 2026, photovoltaic products lose the export VAT refund. Battery products step from 9 percent to 6 percent through 31 December 2026, then end on 1 January 2027. |
| Corporate income tax | Standard rate is 25 percent. Zone preferences depend on the activity, not on trading status. |
Where trading-company files stall
The usual breaks are a scope that omits retail or import-export, a capital figure the bank will not support, a registered address that fails the local domicile check, and a product that needs a licence the founder treated as a later detail. Bank account opening remains a separate gate after the licence. Who can sign, and whether that person must appear, is covered in the legal representative requirements.
If the goal is to invoice Chinese customers, import in the company name, or pay suppliers without a trading agent, the trading WFOE is the working structure. Register Company China handles scope drafting, SAMR filing, and the post-licence customs and tax sequence for foreign shareholders who are not in China for the licence stage.
FAQ
Can a foreigner own 100 percent of a China trading company?
Yes, for ordinary wholesale and retail. Tobacco and a short list of product-specific activities are the exceptions. Confirm the current negative list and any goods licence before you file.
Do I still need a foreign trade operator filing?
No. That filing was abolished at the end of 2022 and was not restored by the Foreign Trade Law that took effect on 1 March 2026. Customs registration plus a trade scope is the path.
Can a representative office import goods?
No. It cannot invoice or import in its own name.
How long before the first shipment?
The licence is the short part. Count customs registration, Single Window access, the bank account, and any product approval. Do not book the vessel against the licence date.
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