The latest from China & Hong Kong

The first real decision in China is not how to set up. It is what to set up. The entity you choose shapes what you can invoice for, how you are taxed, how profit leaves the country, and how easily you can exit later. Getting this right before you file saves far more than it costs. Start with what the structure has to do Foreign investors in China have several vehicles available, but only a few are realistic for most operating businesses. The right choice depends on whether yo

Keeping accounting in-house in China is a reasonable choice for many foreign-invested companies. It gives you control, proximity, and lower recurring cost. What it does not do is guarantee that your books line up with how China's tax administration now reads them. A periodic health check is how you find the gaps before the system does. The environment your books are being read in has changed China's Golden Tax System Phase IV cross-references data across tax, banking, and mar

For foreign-invested companies in China, compliance is not a once-a-year scramble that can be handled in May. It is a fixed sequence of statutory obligations that must be completed in the right order, on a tight calendar, with limited tolerance for late or incomplete filings. A wholly foreign-owned enterprise (WFOE) that treats the annual cycle as a single deadline rather than a chain of dependent steps is the one most likely to miss it. Here is what the 2026 cycle actually r

Foreign founders often arrive in China with a reasonable assumption: keep clean books in the accounting software they already know, and hand the numbers to the accountant at year end. In most markets that works. In China it does not, and the reason is structural. Chinese tax compliance runs on a tight monthly, quarterly and annual rhythm with limited tolerance for late or incomplete filings, and the bookkeeping that feeds it has to be done to local standards from the outset,

For foreign companies operating in China, financial oversight should not stop at incorporation. Once the business licence has been issued, the company must maintain accounting records, complete tax filings, manage VAT and fapiao processes, monitor payroll, and ensure that payments, contracts and reporting all remain aligned. Two important tools support this process: the annual audit and the internal control review. They are connected, but they are not the same. The annual aud

Registering a company in China runs through a standard form filed with the State Administration for Market Regulation (SAMR): the Company Registration (Filing) Application Form. From 1 May 2026, a new version of that form replaced the one that had been in use since 2022 and for foreign investors setting up a WFOE, two changes are worth knowing about before you file. What changed on the form 1. Capital contribution deadline disclosure. Following the 2024 Company Law's introduc

China’s digital economy continues to expand at pace, creating clear commercial opportunities for overseas businesses. At the same time, the regulatory environment governing online activity is tightly controlled and continues to evolve. Foreign companies often underestimate how early licensing and structural decisions affect their ability to operate effectively in the market. Launching a website, app, or online platform in China is not simply a technical exercise. It is a regu

Hong Kong has long been used by international companies as a commercial bridge between Mainland China and global markets. For businesses buying from China, selling into China, managing regional distribution or coordinating cross border contracts, a Hong Kong company can provide a practical operating structure that supports trade, banking, tax planning, logistics and supplier management. The value of Hong Kong is not only that it sits next to Mainland China. Its strength lies

China’s approach to data protection is entering a more assertive phase. While the legislative framework has been largely in place for several years, enforcement is now becoming more structured, more frequent, and more closely tied to corporate governance expectations. For businesses operating in or entering China, this shift is not simply about compliance with data rules. It reflects a broader regulatory position where data management, internal controls, and board-level overs

A Shanghai Index Benchmark for Understanding Real Purchasing Power in 2026 For expatriates relocating to China, understanding the true cost of living goes far beyond headline salary figures. While China is often perceived as a lower-cost destination, the reality is far more nuanced. Living costs vary significantly depending on the city, lifestyle choices, and macroeconomic factors such as inflation, exchange rates, and regional policy direction. Using Shanghai as a benchmark,

For foreign companies operating in China, market access risk is no longer limited to whether a business activity is open, restricted or prohibited at the point of entry. Increasingly, the more important question is whether the company can continue to evidence compliance once operations begin. Across sectors, China’s regulatory environment is becoming more inspection driven. Authorities are placing greater emphasis on documentation, operational visibility, data control, custom

Foreign companies importing into or exporting from China must manage customs registration, product classification, documentation, tax treatment and ongoing compliance. Here is what businesses need to know. For foreign companies operating in China, customs compliance is not a one-off administrative step. It is an ongoing operational requirement that affects how goods enter the market, how products are classified, how taxes are calculated, how supply chains are structured and h

For overseas businesses entering China, one of the first and most important regulatory frameworks to understand is the Foreign Investment Negative List. It defines where foreign capital is permitted, where it is restricted, and where it is entirely prohibited. However, the system is not a single list. It is a structured framework that varies depending on the sector, location, and type of activity. Businesses must often review multiple lists and supporting policies to determin

When setting up a company in China, the registered address is not a simple administrative detail. It is one of the foundation points of the entire incorporation process. The address affects where the company is registered, which local authority handles the application, what business activities may be approved, whether the company can obtain licences, how tax registration is managed and how future inspections or filings are handled. For foreign investors, this is especially im

China’s regulatory environment has entered a phase where legal structure alone is no longer sufficient. Authorities are placing increasing emphasis on whether business arrangements reflect genuine economic substance, particularly in cross border group structures involving holding entities, service centres and intellectual property arrangements. In 2026, this shift is being driven by stronger tax enforcement, deeper data integration across government systems and a clear policy

For companies operating in China, annual audit requirements are a core part of the regulatory framework. Whether a business is a wholly foreign-owned enterprise, joint venture, or domestic company, statutory audit and reporting obligations are closely linked to tax compliance, foreign exchange control, and corporate governance. In 2026, enforcement has become more structured, with greater coordination between tax authorities, auditors, and regulatory bodies. Businesses are ex

China continues to refine its approach to attracting and retaining international talent, with regional governments playing an increasingly active role in shaping practical policy frameworks. In 2026, the Guangzhou–Foshan metropolitan area has introduced a new set of foreign talent measures designed to simplify work permit procedures and enable smoother cross-city mobility within the Greater Bay Area. These reforms are not isolated administrative updates. They reflect a broade

China remains one of the most commercially attractive markets globally, but entering in 2026 requires a far more structured and compliance-led approach than in previous years. Regulatory expectations have increased, enforcement is more consistent, and the gap between well-prepared businesses and those entering without a clear strategy is becoming more visible. For overseas companies, success is no longer determined by speed of entry. It is determined by how well commercial ob

For companies operating in China as part of an international group, one of the most common challenges is navigating the differences between China Accounting Standards (CAS) and International Financial Reporting Standards (IFRS). While CAS has moved closer to IFRS over the years, important differences remain that can affect financial reporting, tax calculations and group consolidation. Understanding these differences is not only a technical requirement. It is essential for ens

China’s 2026 “Two Sessions” opened with a notable shift in tone and positioning. In his Government Work Report, Premier Li Qiang announced a GDP growth target range of 4.5%–5%, marking a continued move away from single-point targets toward a more flexible, range-based approach. This adjustment is not simply technical. It reflects a deeper recalibration of China’s economic priorities, acknowledging external uncertainty while reinforcing a long-term transition toward sustainabl