Set Up and Run Your Company in Mainland China

01 · ChinaMNC

Why Mainland China for Iranian Founders

China combines large-scale manufacturing, an extensive supplier base and a growing domestic consumer market. For companies from Iran, this often matters in three ways. First, sourcing: many product categories, from machinery to consumer goods, are concentrated in industrial clusters where buyers can compare suppliers, inspect factories and negotiate directly. Second, market access: a locally registered company can sign contracts, invoice Chinese customers, hire staff and hold premises in its own name. Third, long-term positioning: a mainland presence can support distribution, after-sales service and partnerships that are harder to run from abroad.

At the same time, Iran-related business carries extra due diligence. Chinese banks and counterparties apply their own compliance and sanctions screening, and requirements can change. Expect more documentation and longer verification than founders from some other markets. A clear, well-documented business plan and transparent ownership structure help. Treat market entry as a compliance project as much as a commercial one, and budget time for checks before signing leases or moving money.

02 · ChinaMNC

WFOE, Joint Venture or Representative Office

The three structures most often considered are the wholly foreign-owned enterprise (WFOE), the Sino-foreign joint venture (JV) and the representative office (RO).

• WFOE: A limited liability company owned by foreign investors. It can conduct approved business activities, invoice customers, hire employees and remit profits. Most trading, consulting and service businesses start here. The business scope must be drafted carefully, because it defines what the company may legally do.
• Joint venture: A company shared with a Chinese partner. Useful where local licences, distribution networks or sector access require a domestic partner. Governance, capital contributions, decision rights and exit terms need detailed contractual work, and partner selection matters more than speed.
• Representative office: A liaison office that cannot earn revenue directly. It suits market research and coordination, not trading or invoicing. Staffing and activity restrictions apply.

Sector rules differ, and some activities require special permits. Confirm the current negative list and local requirements before choosing a structure.

03 · ChinaMNC

The Five-Step Setup Process

Registration usually follows a sequence, though timing varies by city, sector and the completeness of your documents.

• Step 1 — Plan and pre-check: Define activities, ownership, capital and a realistic business scope. Screen the proposed name and check sector restrictions and local filing rules. Decide the city based on customers, suppliers and staff.
• Step 2 — Prepare and legalise documents: Gather investor documents, translate them into Chinese where required, and complete notarisation and consular legalisation or apostille as applicable. Inconsistent names or addresses are a common cause of rejection.
• Step 3 — File for establishment: Submit the name, registration, legal representative and related filings through the local market regulation system. Obtain the business licence once approved.
• Step 4 — Post-licence registrations: Arrange company seals, tax registration, bank account opening and any sector-specific permits. Banking due diligence can take time for Iran-linked ownership.
• Step 5 — Start operating compliantly: Set up bookkeeping, invoicing, payroll and foreign exchange routines. Plan work visas for foreign staff and renewals for all registrations.

04 · ChinaMNC

Documents to Prepare

Document requirements depend on the entity, city and sector, but the core set is fairly consistent. Expect to provide investor identity documents, corporate registration certificates for company shareholders, proof of address, and a description of the proposed business. A legal representative, supervisor and, where relevant, executive officers must be nominated, with identity documents for each. You will also need a registered address document, such as a lease or a provider agreement, and the articles of association.

Foreign-language documents usually require Chinese translation, and certain documents need notarisation plus legalisation or an apostille, depending on the issuing country and current practice. Names, registration numbers and addresses must match across every document; small inconsistencies can trigger rework. For Iran-based shareholders, banks and authorities may request additional explanation of ownership and business purpose. Keep a clean, indexed file, retain originals, and check with the local registration authority or a qualified adviser before submission. Requirements change, so verify them at the time of filing.

05 · ChinaMNC

Registered Address, Business Scope and Local Compliance

A mainland company needs a registered address in the city of registration. This can be commercial office space, or in many cities a serviced address or incubator arrangement, subject to local rules. The address appears on the licence and is used for official correspondence and inspections. Confirm that the property can host your type of business and that the landlord can provide the documents the registry requires. Budget for rent, deposits and any local filing fees.

Business scope is the legal description of permitted activities. Draft it to cover what you actually plan to do, including related services, but avoid listing activities that trigger licences you do not intend to obtain. Some activities require pre-approval or sector permits, and certain goods face import, export or product-safety rules. After registration, maintain statutory records, file annual reports and keep accounting books in line with Chinese requirements. If you plan to import or export, confirm customs registration and product compliance early, because these affect contracts, warehousing and cash flow.

06 · ChinaMNC

Banking, Tax and Visas

Opening a corporate bank account is often the slowest step for Iran-linked companies. Banks conduct their own know-your-customer and sanctions screening and may request detailed information on ownership, source of funds, expected transactions and counterparties. Prepare a clear business narrative, contracts or letters of intent, and consistent documentation. Do not assume an account will be opened quickly; plan cash flow accordingly and avoid signing commitments that depend on immediate banking access.

On tax, a mainland company is generally subject to Chinese corporate income tax and VAT-type taxes, with invoicing rules that must be followed. Engage a local accountant early to set up books, determine applicable rates and incentives, and handle monthly or quarterly filings. For staff, foreign employees normally need a work permit and a residence permit; the process involves the employer, local authorities and documented qualifications. Short-term business visas do not permit local employment. Rules and processing times change, so verify current requirements with the authorities and qualified advisers.

07 · ChinaMNC

Common Mistakes to Avoid

Most delays come from preparation, not from the market itself.

• Rushing the structure: Choosing a WFOE, JV or RO before confirming sector rules, tax treatment and banking feasibility often forces a costly restart.
• Weak document consistency: Mismatched names, addresses or registration numbers across translated and legalised papers cause repeated rejections.
• Narrow business scope: A scope that omits planned activities can block invoicing or require later amendments.
• Ignoring banking reality: Signing leases and supplier contracts before understanding account-opening requirements can strand working capital.
• Underestimating compliance: Bookkeeping, invoicing, annual filings and work permits are ongoing obligations, not one-time tasks.
• Unclear partner terms: In joint ventures, vague governance and exit clauses create disputes later.

Use experienced local advisers, keep a single source of truth for corporate data, and verify requirements at the time of filing.