China WFOE Post-Incorporation Checklist: What to Do in the First 90 Days

Receiving your business licence feels like the finish line. It is closer to the starting gun.

A newly issued Chinese business licence confirms that your entity legally exists. It does not let you open a bank account, receive capital from your parent company, issue an invoice, hire an employee or import a single carton. Each of those depends on a further registration, and several of them depend on each other in a specific order.

This is where most first-time market entrants lose time. The registration project is well managed because someone was clearly accountable for it, and then the licence arrives, the project is declared complete, and the follow-on steps get picked up in an ad hoc way by whoever is available. Three months later the entity has staff on payroll, a customer waiting for an invoice it cannot issue, and capital sitting in the parent company because the foreign exchange registration was never completed.

The work below is what turns a registered company into an operating one. The timings assume a straightforward services or trading WFOE in a first-tier or major second-tier city, with no unusual licensing requirements. Manufacturing and regulated sectors run longer.

Days 1 to 15: chops, records and the legal representative

Nothing else can start until the entity can sign, and in China that means chops rather than signatures.

Carve and register the chops

A Chinese company executes documents with its chops. The company chop binds the entity generally, and a set of specialised chops covers finance, invoicing, contracts and the legal representative's personal chop. They are carved by an authorised maker and registered with the Public Security Bureau.

Two points matter more than the mechanics. First, this is genuinely urgent, because the bank, the tax authority and your landlord will all need chopped documents within weeks. Second, custody needs deciding before the chops exist, not after. Whoever physically holds the company chop can commit the entity, and the most damaging disputes we see in young WFOEs involve a chop held by someone who later becomes uncooperative. Our guide to China company chop management covers the varieties and the controls in detail.

Assemble the corporate record

Build the statutory file while the documents are fresh: the business licence, the articles of association, the shareholder resolutions, the officer appointments, the lease and the address evidence, the authenticated parent company documents and the chop register. This file is requested repeatedly over the following weeks by banks, tax officials and licensing authorities, and reconstructing it later is far more work than compiling it now.

Brief the legal representative

The legal representative is not a nominal title. The individual named carries personal exposure for the company's compliance, appears on filings, and is required in person or by properly documented delegation for several of the steps that follow, including bank account opening at most institutions.

If your legal representative is a group executive who visits China twice a year, resolve now how their presence and signature will be provided, because discovering the constraint during a bank appointment costs a month. Our post on WFOE directors and legal representative requirements sets out the roles and their liabilities.

Days 10 to 30: banking

Bank account opening is the single most common source of delay in the post-incorporation phase, and the reason is that it is not an administrative formality. The bank conducts its own independent due diligence on your group, and it is not bound by the fact that the authorities have already approved your registration.

Two accounts, two purposes

You will generally need a basic RMB account, which is your operating account for domestic receipts and payments, and a foreign currency capital account to receive the registered capital contribution from the shareholder. The basic account is a prerequisite for tax registration and for salary and social insurance payments. The capital account is what makes the capital injection possible.

Only one basic account is permitted per entity, and it must be opened before certain other accounts, so this is a sequencing dependency rather than a parallel task.

What banks actually ask for

Beyond the registration documents, expect requests for evidence of the group structure and ultimate beneficial ownership, the parent company's financial standing, a description of your intended business activity with expected transaction volumes and counterparties, the lease and photographs of the premises, and identification for the legal representative and authorised signatories. Some banks require a site visit. Most require the legal representative to attend in person.

Three practical observations. Banks differ substantially in their appetite for newly established foreign-invested entities, so if your first choice is slow it is often faster to approach another than to keep waiting. A group with a complex or offshore-heavy ownership chain should expect additional questions and prepare the explanation in advance. And documents authenticated for the registration may need refreshing for the bank, which is worth checking before you assume the file is complete.

Our bank account opening service page covers the institution-by-institution differences and the documentation packs.

Days 15 to 45: tax registration and invoicing

Your tax obligations begin when the entity is established, not when it earns revenue. A WFOE with no sales and no staff still has monthly and quarterly filings to make, and a nil filing not made is a late filing.

Register and set up the filing calendar

Tax registration establishes your records with the tax authority, confirms your applicable taxes and filing frequency, and links your bank account for payment. From that point your compliance calendar is running: VAT and surcharges, corporate income tax prepayments, individual income tax withholding once you have staff, and stamp duty where relevant.

Set up bookkeeping in parallel rather than afterwards. Chinese statutory accounts must be maintained in Chinese and in renminbi under Chinese accounting standards, which is a separate exercise from your group reporting. Companies that run three months on a spreadsheet and then engage an accountant pay for a reconstruction. Our monthly bookkeeping service exists precisely to start this from day one.

Decide your taxpayer status

New entities are generally treated as small-scale taxpayers by default, with a lower VAT rate but no ability to credit input VAT or to issue special VAT fapiao that your customers can use to claim credits. General taxpayer status reverses both.

The decision is commercial rather than administrative. If your customers are Chinese businesses that expect a special VAT fapiao, small-scale status becomes a sales obstacle quickly. If you have significant input VAT on purchases or imports, crediting it matters. Our guide to VAT general taxpayer status covers the thresholds and the application.

Apply for fapiao capability

You cannot bill a Chinese customer properly without the ability to issue fapiao. This means applying for the appropriate fapiao types and quotas and getting set up on the invoicing system, which now runs largely through fully digitalised e-fapiao.

Give this attention early, because the quota you are granted initially may be lower than your invoicing needs, and increasing it takes a further application. A first significant customer invoice held up by an insufficient fapiao quota is an avoidable and highly visible failure.

Days 20 to 50: foreign exchange and capital

Getting money into the entity is a regulated process, and it is where the registration phase and the operating phase connect.

Registration and injection

Foreign exchange registration establishes your entity in the system that governs cross-border flows, and it is a precondition for receiving capital. The capital contribution is then remitted from the shareholder into the capital account, identified as capital rather than as a payment or a loan, and settled into renminbi for operational use in line with the permitted purposes.

Each of those steps produces documentation that needs to reconcile with your accounting records and with the contribution schedule in your articles of association. Capital that arrives as a general transfer, or is settled without proper records of use, creates problems that surface later during audit or when you first try to repatriate profits.

Plan the amount and the timing deliberately

Under the revised Company Law, subscribed capital must be paid up within five years of establishment, so the figure in your articles is now a funding commitment with a deadline. The first injection should be sized to fund the entity to a realistic operating point, with the remaining tranches diarised against the schedule you filed rather than left to be remembered in year four. Our article on the five-year capital contribution rule works through the sizing and the consequences of missing a deadline.

A related trap: a company short of cash before its capital arrives sometimes asks the parent for a loan instead. That is a different instrument with its own foreign debt quota, registration and interest deductibility considerations, and it does not discharge the capital subscription.

Days 30 to 60: people and payroll

You cannot lawfully employ anyone in China until the employer-side registrations exist, and the timing is tighter than most groups expect because employment relationships are treated as beginning on the first day of work.

Social insurance and housing fund registration

The entity registers as an employer for social insurance and, in most cities, the housing fund. Contributions are due from the start of employment, at locally set rates and against locally set contribution bases, and late registration typically means back contributions with surcharges rather than a waiver.

Contracts, handbook and the first hires

A written employment contract is required, and the law expects it within one month of the start of work. Contracts should be in Chinese, specify the term, the role, the workplace, the working hours system, remuneration and probation within the statutory limits, and be consistent with your handbook.

The handbook itself is worth doing properly at this stage rather than adopting a translated group policy. To be enforceable it needs to have gone through a proper adoption process involving employee consultation and individual acknowledgement. A handbook that has not been adopted correctly is effectively unavailable to you at the moment you need to rely on it, which is usually a disciplinary or termination situation two years later.

Payroll and individual income tax

Payroll runs monthly with individual income tax withheld and reported by the employer, alongside the social insurance and housing fund filings. Set this up before the first payday rather than after. The first payroll cycle is also when the practical consequences of your contract terms and benefit decisions become visible, which is a good reason to have had them reviewed rather than improvised.

Where you need people working before the entity is ready, an employer of record arrangement can bridge the gap lawfully, and it is a far better answer than engaging staff as contractors, which is the misclassification risk that produces claims later.

Days 45 to 90: licences, customs and the compliance calendar

Sector licences and permits

Your business licence records a business scope. Some activities within a scope require a further licence or filing before you may actually carry them out, in areas including food and beverage, healthcare and medical devices, education, telecommunications and value-added internet services, freight forwarding and certain retail and import categories.

Confirm early whether anything in your scope carries this requirement, because these approvals run on their own timetables and occasionally require premises or personnel conditions that affect decisions you have already taken about your office and your first hires.

Trading entities: customs and E-Port

An entity intending to import or export needs customs registration and import and export recordal, plus E-Port registration and the associated IC cards for the people who will handle declarations. Where you expect export VAT refunds, that registration is a separate step again.

Build these into the schedule from the start if you are a trading business, because they commonly take longer than the banking and tax steps and they gate your first shipment. Our customs registration page sets out the sequence and the documentation.

Establish the annual calendar

By day 90 the recurring obligations should be documented with owners and dates: monthly and quarterly tax filings, monthly payroll and contributions, the annual corporate income tax reconciliation, the statutory annual audit, the annual report to the market regulator, the foreign exchange annual reporting, and any licence renewals. Our company secretarial service maintains this calendar and the statutory records for clients who would rather not build the function internally.

The dependencies that decide your timeline

Most of the delay in a 90-day launch comes from treating these steps as a list to work through rather than a chain with hard links. The critical dependencies are worth stating plainly.

Chops gate everything. No chopped documents means no bank application, no tax registration and no signed lease amendment.

The basic bank account gates tax registration and payroll. Tax payment and salary and contribution payments both run through it.

Foreign exchange registration gates the capital injection, which gates your ability to pay for anything substantial. An entity with no capital and no revenue cannot fund a deposit, a fit-out or a first payroll.

Tax registration gates fapiao, which gates billing. You can sign a contract before this is done, but you cannot invoice against it.

Employer registrations gate lawful hiring. Start dates should be set against the registration status, not against the recruitment timetable.

The three most expensive sequencing mistakes

Hiring before the employer registrations exist. The employment relationship begins on the first day of work regardless of your registration status, and the exposure is back contributions, surcharges and a contract that was late from the outset.

Committing to a customer delivery date before fapiao capability is in place. The commercial damage of an unbillable first sale is out of proportion to the administrative step that caused it.

Leaving the capital plan until the entity needs cash. Foreign exchange registration, remittance and settlement are not same-week activities, and a payroll funded by an informal transfer from the parent creates an accounting and tax problem that outlives the cash flow problem it solved.

Who owns each step

The pattern behind most post-incorporation problems is not ignorance of the rules. It is that the registration project had an owner and the launch phase did not.

Assign each of the areas above to a named person with a date, and be explicit about the handoffs between them: from the registration adviser to the bank, from the bank to the tax adviser, from tax to payroll, from payroll to HR. Every one of those boundaries is a place where a step gets assumed to be someone else's. Our piece on how China compliance failures usually start with a handoff that never happened is a set of case studies in exactly this failure.

Two roles are worth naming specifically. Someone in China needs standing authority to sign and file, because a launch phase that routes every document through an overseas approval chain will not meet these timelines. And someone needs to own the compliance calendar from day one, so that the first monthly filing happens on time rather than being discovered late.

A realistic view of the 90 days

A well-run launch for a straightforward services WFOE gets chops, banking, tax registration, fapiao capability, foreign exchange registration and the first capital tranche done inside about eight to ten weeks, with employer registrations and the first hires following immediately behind. A trading entity needing customs and E-Port should plan on the full 90 days and sometimes longer. A regulated or manufacturing entity should treat 90 days as the point at which the licensing path is clear rather than complete.

What separates the companies that hit those timelines from the ones that spend six months on it is rarely local knowledge. It is that they sequenced the work, assigned it, and started the recurring obligations on time instead of retrofitting them.

Acadia Advisory handles the full post-incorporation sequence for foreign-invested entities, from chops and banking through tax registration, foreign exchange and capital injection to payroll and the ongoing compliance calendar. If your licence has just been issued, or is about to be, a short planning conversation now is worth considerably more than a remediation exercise later.