How Much Is a WFOE setup cost in China? A Year-One Budget
Quick answer: Setting up a wholly foreign-owned enterprise (WFOE) in China involves three separate budgets: one-off setup costs, ongoing running costs, and registered capital. With Woodburn, the full first-year setup package for a limited company is CNY 22,600. Running costs such as office space, accounting, payroll, and the annual audit come on top, and registered capital is money you commit to the company, not a fee.
Most founders ask "how much does a WFOE cost?" expecting one number. In practice, the figure that matters is your total year-one cash requirement. Separating the three budgets below makes it much easier to compare quotes and avoid surprises after the business licence is issued.
1. One-off WFOE setup costs in China
These are the costs of getting the company legally established and ready to trade. They typically cover:
• Company name check and registration with the market regulator (SAMR)
• Preparation of the articles of association and incorporation documents
• Business licence issuance
• Engraving and filing of company chops (seals)
• Tax registration and set-up of the electronic tax bureau account
• Corporate bank account opening support, including the capital account
• Social insurance and housing fund account registration
Woodburn's first-year package for a China limited company is CNY 22,600. It covers incorporation, post-incorporation set-up, government charges, out-of-pocket disbursements and administration. See the full scope on our China Company Registration page.
Costs outside this package usually relate to your home country: notarising and apostilling (or legalising) parent-company documents, and certified Chinese translations. These vary by country, so budget for them early. Our guide to documents foreign shareholders need explains what to prepare.
2. WFOE'S running costs in year one
The business licence is the start of your compliance obligations, not the end of the project. Plan for:
Cost item | What drives the cost |
Registered office | Must be a genuine commercial address in the district of registration; rent varies widely by city and building |
Monthly bookkeeping and tax filing | Transaction volume, number of fapiao issued and received, VAT status |
Payroll and social insurance | Headcount, city contribution rules, salary levels |
Annual audit and CIT reconciliation | Size and complexity of the business |
Finance manager / supervisor appointments | Whether you have qualified people in China to fill these roles |
Employer social insurance and housing fund are the cost most often underestimated. Depending on the city and the salary, they can add roughly a quarter to a third on top of gross salary, up to each city's contribution cap. Read more in China Social Insurance Obligations Explained.
3. Registered capital: commitment, not cost
Registered capital is the amount shareholders commit to put into the company. It is not paid to the government, and once injected it can be used for the company's operating expenses such as rent and salaries.
Under the 2024 Company Law, subscribed capital for a limited liability company must be fully paid within five years of incorporation. That makes it a real cash-flow commitment. Set it high enough to cover your operating costs until the company is self-funding, but not so high that you are obliged to inject money you will not need. See How to Calibrate Registered Capital for a China Company.
Hidden costs that catch founders out
• Delays in opening the bank account. Until the account is open, capital cannot be injected and staff cannot be paid locally. See Why Bank Account Opening Is the Longest Step.
• The wrong business scope. Changing scope later means a new filing and, in some cases, new licences.
• Choosing a city on address cost alone. A cheap address in the wrong district can cost more in time and local requirements.
• Penalties from missed filings. Monthly and annual filings apply even if the company has no revenue.
How to keep your year-one budget under control in China
1. Decide your business scope before filing, based on what you will actually sell.
2. Size registered capital against a 12–24 month operating budget.
3. Use one provider for setup and ongoing accounting so nothing falls between two firms.
4. If you only need one or two people in China at first, consider an Employer of Record before you incorporate.
Frequently asked questions
Is there a minimum registered capital for a WFOE?
For most sectors there is no statutory minimum. Some regulated industries have their own requirements, and banks and authorities expect capital to be realistic for the planned business.
Can I set up a WFOE without visiting China?
In most cases, yes. Documents are signed and authenticated abroad. Some banks require the legal representative to verify their identity in person or by video.
Are government fees included in Woodburn's package?
Yes. The CNY 22,600 first-year package includes the government charges for incorporating a limited company.
What does a WFOE cost after year one?
Ongoing costs are mainly accounting and tax filing, the annual audit, the registered address, and payroll. Your Woodburn adviser will quote these based on your expected transaction volume and headcount.
Related reading
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About Woodburn Accountants & Advisors
Woodburn Accountants & Advisors helps international businesses set up and run companies in mainland China and Hong Kong. With more than 30 years' experience and offices in Shanghai and Hong Kong, our team of chartered company secretaries, certified public accountants and tax specialists has guided hundreds of foreign companies, from first-time market entrants to established multinationals, through company registration, accounting, tax, payroll and annual compliance. We combine large-firm expertise with boutique responsiveness.
Our China services: China Company Registration · Cloud Accounting & Financial Reporting · Cloud Payroll · Tax & Audit · Employer of Record · Finance Manager · Visa Applications · Trademark Registration
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