Planning a WFOE in China? Don't get caught by hidden fees. Read Asomerit’s transparent guide to China company registration costs, maintenance, and visa requirements.
For many international investors, the massive opportunities in the Chinese market are often accompanied by a cloud of uncertainty—especially regarding money. At Asomerit, a simple yet complex question we frequently receive is: “How much does it actually cost to open a company in China?”
The answer is rarely a single figure. While many agencies may attract attention with extremely low "signup fees," the real cost of running a compliant entity consists of three distinct layers: One-time Setup Costs, Annual Maintenance Costs, and Human Resource Costs.
This guide provides a transparent breakdown of the lifecycle costs for a Wholly Foreign-Owned Enterprise (WFOE)—the most common investment vehicle—and briefly compares it with Representative Office (RO) expenses to help you build an accurate budget.
A WFOE is an independent legal entity that allows you to issue invoices, hire staff directly, and repatriate profits. The initial investment to obtain your business license generally falls into five categories.
Unless you are fluent in Mandarin and familiar with Chinese Corporate Law, navigating the registration process alone is risky. Professional consulting firms charge service fees to handle name approval, document drafting, translation, and coordination with the Administration for Market Regulation (AMR).
Here at Asomerit, we offer a free preliminary consultation to help you understand the basic requirements of company establishment at the lowest possible time cost.
Chinese law requires every company to have a compliant registered address. Costs vary significantly depending on the city and district.
For consulting firms, tech startups, or trading companies that don't need a physical storefront, using a "Virtual Address" provided by economic zones is the most cost-effective compliant solution.
If you rent a physical office, you must verify a critical detail: Does the office have a "registration quota" available? Many offices, especially in co-working spaces, have limited slots for company registration. Even if you pay rent, you might still need to purchase a separate virtual address for registration if the building's quota is full. Additionally, renting physical space usually requires a 2-3 month rent deposit, adding to your initial cash flow pressure.
To encourage foreign investment, the Chinese government has abolished most official fees (such as license printing fees). However, in some cities, you should still budget a few hundred RMB for carving official company stamps (chops) and filing them with the police bureau.
Once the enterprise is registered, opening a bank account involves several minor but necessary fees:
This is the fund investors commit to the WFOE. Two major factors in 2025 affect your budget planning here:
Our Advice: If you do not meet the "2 years experience + Bachelor's degree" exemption for a work visa, you may need to increase your registered capital commitment to support your visa application.
Once established, compliance is non-negotiable. Even if your company has zero revenue, you must file monthly tax returns.
Chinese Accounting Standards (CAS) differ from international norms. You must maintain compliant books and file taxes monthly or quarterly. The service fees for bookkeeping are typically determined based on your company's annual turnover, the volume of invoices to be issued, and your VAT taxpayer type.
Chinese companies are required to submit an annual report to the Administration for Market Regulation (AMR) before the end of June each year. During this process, we strongly recommend that all WFOEs simultaneously submit an annual audit report conducted by a Chinese CPA. This is particularly critical if you intend to repatriate your WFOE's profits overseas, as you must submit this audit report to both the bank and the tax bureau to authorize the transaction.
The cost of an annual audit is generally a few thousand RMB (e.g., around 5,000 RMB), and you should factor this into your company's standard operational costs. Attempting to save this small amount often leads to significantly higher compliance risks, which is ultimately not worth the potential consequences.
This is the area most often underestimated by foreign investors. In China, an employee's "Gross Salary" is not the total amount the company pays. Given China's social security system, you must calculate the Total Cost of Employment (TCE).
To give you a concrete example, let's assume you hire a manager in Beijing with a gross monthly salary of 20,000 RMB. In addition to the salary, the employer is legally required to contribute to Social Insurance (Pension, Medical, Unemployment, Injury, Maternity) and the Housing Provident Fund. In Tier 1 cities, this additional expenditure accounts for approximately 35% - 40% of the gross salary.
If you want to understand China's social insurance system or learn exactly how employee social insurance is calculated, you can click here to view our previous blog post.
At the same time, if you plan to apply for a work visa yourself, or if your company intends to hire foreigners, you also need to factor in the cost of applying for a China Work Visa. This generally includes three parts:
Some investors view a Representative Office (RO) as a "cheaper" shortcut. While setting up an RO is slightly simpler, it is functionally restricted: It cannot earn profit, issue invoices, or sign sales contracts. It is strictly for market research and liaison.
Crucially, an RO is not necessarily cheaper to maintain. First, there is the tax on expenses; since an RO has no revenue, tax authorities levy tax based on your operational expenses (Rent + Salaries), which often results in a higher effective tax burden than a WFOE that hasn't made a profit yet. Second, there are hiring restrictions; an RO cannot hire staff directly. You must use a third-party dispatch agency (like FESCO), which adds a mandatory service fee on top of every employee's salary.
For investors planning to conduct commercial activities, the WFOE remains the optimal choice for long-term value. However, for those strictly engaging in non-profit market research who want a simple physical presence, an RO can still be a viable option.
Does the list of setup fees, annual audits, and compliance costs detailed above seem "asset-heavy" for your current stage?
If you are still in the market validation phase, or simply need to place 1-2 sales representatives in China to test demand, registering a full company immediately might be an over-commitment. Not only are the maintenance costs high, but the deregistration process (if you decide to exit) can be lengthy and complex.
For this scenario, Asomerit’s Employer of Record (EOR) service acts as your low-risk launchpad:
Entering the Chinese market is a strategic marathon, not a sprint. While it is tempting to focus solely on the lowest initial registration quote, the long-term success of your business depends on a realistic understanding of the Total Cost of Operation. From the "hidden" annual compliance fees to the nuances of social insurance and the rigid capital requirements of the 2025 Company Law, every RMB planned for today prevents a compliance headache tomorrow.
Whether you choose a WFOE for full operational control or an RO for market exploration, the key to a smooth entry is transparency.
Why Choose Asomerit Consulting? At Asomerit, we don't just hand you a business license; we help you build a sustainable roadmap. We pride ourselves on Transparent Pricing—what we quote is what you pay. There are no hidden "renewal fees" or surprise "service charges."
Are you ready to build a budget that works? Contact Asomerit Consulting today for a free, customized cost simulation tailored to your specific industry and location. Let us handle the complexities of compliance so you can focus on growing your business in China.