Limited Liability Company (LLC)
Limited Liability Company set-up
Looking to establish a company in China? Our expert guide covers steps, benefits, limitations, and costs.
Start Your China Limited Liability Company Formation today with ONE CLICK.
What is Limited Liability Company?
A Limited Liability Company (LLC) is one of the two main company types under China’s Company Law (amended 2023, effective July 1 2024) — the other being a Joint-Stock Limited Company (JSC).
In an LLC, each shareholder’s liability is limited to their subscribed capital contribution. The company itself bears responsibility for its debts with its assets. This structure is favored for smaller to medium-sized enterprises, including foreign-invested enterprises (previously “WFOE”) under the unified foreign investment regime.
Simplicity & speed
Lower governance threshold
Flexible shareholder structure
Cost-efficient setup
WFOE? Not Anymore!
With the implementation of the Foreign Investment Law of the PRC, all foreign-invested enterprises are now governed by the unified Company Law, meaning that traditional structures such as WFOE (Wholly Foreign-Owned Enterprise) and JV (Joint Venture) have been integrated into the new framework:
A former WFOE is now legally a Limited Liability Company with 100% foreign ownership.
A former JV (equity or cooperative) is now either an LLC or JSC, depending on its shareholding structure.
Why Choose Limited Liability Company?
Choosing an LLC allows foreign investors to establish a Chinese company with streamlined structure, predictable governance, and cost-effective compliance.
Simplicity & speed
fewer procedural burdens than a JSC
Adaptability
suitable for trading, services, manufacturing, and local operations
Foreign investor friendly
supports 100% foreign ownership in eligible sectors
Lower governance threshold
no mandatory board/monitor structure for smaller LLCs
Flexible shareholder structure
from 1 to 50 shareholders (according to the latest law)
Cost-efficient setup and operations
ideal for early stage or lower-capital entities
Who Should Consider Limited Liability Company?
A Limited Liability Company (LLC) is the most common and flexible business structure for both domestic and foreign investors entering China. It is designed for companies seeking a legal presence that strikes a balance between simplicity, cost efficiency, and compliance.
Unlike a Joint-Stock Limited Company (JSC), an LLC offers a lighter governance model while still providing full legal protection for shareholders and operational autonomy for everyday business management.
Start-ups and SMEs
Ideal for new market entrants requiring a quick and compliant setup
LLC with 100% foreign ownership
Suitable for investors seeking full ownership under the new Company Law.
Joint Venture Projects
Works well for limited-scale partnerships where control and risk allocation are clearly defined
Operational Subsidiaries
Perfect for companies expanding existing operations or establishing a China branch with flexible capital
China Limited Liability Company Registration Procedure
1. Preparation
Determine your company’s basic structure and business plan in line with China’s new Company Law (effective July 1 2024).
- Company name (Chinese & English)
- Registered address
- Registered capital & share structure
- Shareholder list
- Business scope
2. Articles & Share Structure
Draft the Articles of Association (AoA) and define how shares will be distributed among promoters.
- Articles of Association (AoA)
- Share subscription agreement
- Board & supervisor list
- Legal representative appointment
3. Capital Contribution & Verification
Fulfil the registered capital requirement through monetary or non-monetary contributions.
- Open a temporary capital account
- Deposit subscribed capital or assets
- Obtain CPA capital verification report
4. Registration & Licensing
Apply for incorporation with the Administration for Market Regulation (AMR) and obtain your Business License.
- Submit application package to AMR
- Receive business license (legal entity status)
- Register company seals (chops for official use)
5. Post-Registration Filings
Complete statutory registrations and foreign-investment filings.
- Corporate bank account opening
- Tax registration with local authorities
- Social insurance & housing fund setup
- MOFCOM & SAFE filings
6. Operational Launch & Compliance
Start business operations and maintain monthly compliance. Set up accounting and payroll systems, register VAT invoicing, and file periodic reports to remain fully compliant with local regulations.
Timeline
Planning & Structuring
This stage involves selecting a compliant business name, confirming shareholders, and drafting the Articles of Association according to the Company Law
- Estimated time: 2–3 weeks
Registration & Licensing
Submit your application package to the Administration for Market Regulation (AMR) to obtain a Business License, which serves as the company’s legal identity in China.
- Estimated time: 3–4 weeks
Launch & Compliance
Complete all filings necessary for financial, tax, and HR compliance before starting operations.
Foreign-invested LLCs must also file records with MOFCOM and SAFE.
- Estimated time: 3–5 weeks
Basic Documents required for LLC
To establish a Limited Liability Company (LLC) in China, investors must prepare a set of legal, financial, and administrative documents in compliance with the latest Company Law (2023 Revision).
These materials ensure proper registration, verified capital contribution, and long-term corporate compliance.
1. Foundational Documents
- Company name approval notice
- Registered address certificate
- Business scope description
- Shareholder identity documents or business licenses
- Confirmation of registered capital
2. Governance Documents
- Articles of Association (AoA)
- Shareholder resolution or meeting minutes
- Legal representative appointment letter
- Board or executive director appointment document
- Company seal application record
3. Financial Documents
- Bank capital deposit slip or statement
- Capital verification report (issued by licensed CPA)
- Tax registration form and bank account certificate
- Social insurance and housing fund registration forms
- MOFCOM / SAFE filings
WHAT DO YOU GET
Official Business License
Issued by AMR, confirming full legal entity status
Registered Company Seals
Authorized chops for official, financial, and legal use
Articles of Association
Defines internal governance, ownership, and decision rights
Valid Tax Registration
Enables invoicing, filings, and compliance with local tax law
Corporate Bank Account
Supports capital deposits and daily business transactions
Ongoing Compliance Records
Proof of continuous reporting and regulatory adherence
All-In-One LLC Entry Package
Our LLC Incorporation Package helps foreign investors establish a fully independent legal entity in China.
Under the 2023 Company Law, a LLC enables shareholding, capital raising, and long-term operations with transparent governance and full regulatory compliance.
LLC Registration
LLC registration securing your business certificate, registered address and bank accounts.
Tax & Accounting Compliance
China accounting system setup. Monthly, quarterly & yearly reporting. Corporate annual tax return.
Employer of Record
We take care of contracts, payroll, benefits, and HR administration.
LLC FAQs
What is the LLC equivalent in China?
The LLC equivalent is the Limited Liability Company — a structure where shareholders’ liability is limited to their capital contributions.
What is a “Ltd.” in China?
“Ltd.” refers to the same Limited Liability Company form under the Company Law (2023 Revision), applicable to both domestic and foreign enterprises.
Can foreigners own 100% of a company in China?
Yes, foreign investors can own 100% of a Chinese LLC if the industry is not restricted by the Negative List for foreign investment.
Do you need a Chinese partner to register an LLC?
No. A Chinese partner is not required unless your business operates in a sector that mandates a joint venture.
How to register an LLC in China?
The process includes name approval, Articles of Association, capital contribution, registration with AMR, and post-registration tax and banking setup.
How long does it take to register an LLC?
Generally 6–8 weeks, depending on local AMR processing speed, capital verification, and foreign investor documentation.
What are the advantages of an LLC in China?
- Full foreign ownership (for open industries)
- Simple governance and flexible structure
- Limited liability protection
- Lower compliance burden compared to JSCs
What are the disadvantages of an LLC?
- Harder to transfer equity compared to share-based companies
- Limited fundraising options
- Requires notarization and capital verification for foreign shareholders
What documents are required for LLC registration?
- Company name approval notice
- Articles of Association
- Shareholder ID or business license
- Registered address certificate
- Capital verification report
What is the minimum capital for an LLC?
There is no fixed minimum under the new Company Law, but the amount must align with your business scope and industry requirements.
What is the Business License in China?
The Business License is issued by the AMR and serves as your company’s legal certificate of incorporation.
What taxes must an LLC pay in China?
Standard taxes include Corporate Income Tax (CIT 25%), Value-Added Tax (VAT 6%–13%), and local surcharges. Rates may vary by region and industry.
Can an LLC hire employees directly?
Yes. A registered LLC can hire staff, issue employment contracts, and contribute to social insurance and housing funds.
Can a foreigner act as a legal representative?
Yes, a foreigner can serve as the company’s legal representative, provided they have valid visa status and authorization from shareholders.