Do I need a Chinese company to sell in China?

Usually not. Cross-border e-commerce and a Chinese distributor both work with no Chinese entity, and a Chinese customer can deduct what it pays a foreign supplier. A company becomes necessary when you must issue Chinese tax invoices domestically, employ staff in China, hold stock in your own name, or need a licence reserved to a Chinese legal person.

The expensive mistake is registering a company because registering feels like the serious step, then carrying its costs and its filing calendar while the market is still being tested. Foreign founders read an entity as the price of entry; Chinese counterparties read it as evidence of commitment. Neither reading is a rule. An entity is a tool with running costs, a filing calendar and a deregistration procedure at the end of it, so the first question is narrow: which specific thing you want to do in China cannot be done without one.

The four routes, and who sells to the Chinese buyer

Route	Entity of your own	Who the Chinese buyer contracts with
Cross-border e-commerce(跨境电子商务零售进口)	None	You. The consumer buys from the foreign company itself.
Chinese distributor or agent	None	The distributor. It buys from you, imports in its own name and resells on its own invoices.
Representative office(代表机构)	Yes, in a form that cannot trade	Nobody. A representative office cannot be the seller.
Wholly foreign-owned enterprise (WFOE)	Yes	Your own Chinese company, invoicing domestically in RMB and holding stock, staff and licences in its name.

The triggers that genuinely require an entity

• You must issue Chinese tax invoices to domestic customers and be paid in RMB onshore.
• You need to hold stock in China in your own name and sell it into the domestic market.
• You need people working for you in China rather than for a partner.
• Your activity needs a licence, and the licence attaches to a Chinese legal person.
• A customer or a platform requires a domestic contracting party and will not sign with an offshore one.

Only the last of those is a commercial fact rather than a legal one, and it is the one most often asserted without being tested. The first is the one that pushes most sellers into registering when they need not.

Can a foreign company invoice a Chinese customer?

Yes, and the customer can deduct what it pays you. The invoice rules say that a buyer must obtain an invoice from the payee when it pays for goods or services, and that an invoice which does not meet the rules cannot be used as a reimbursement voucher and may be refused.^⁠[1] Read on its own, that looks like a bar on buying from a company which cannot issue one. It is not. For expenditure on goods or services purchased from outside China, the counterparty’s own invoice, or a receipt document of that character, together with the relevant tax payment vouchers, is the pre-tax deduction voucher.^⁠[2] A page of its own sets out the kinds of Chinese tax invoice, or fapiao (发票), and what each one does.

What the Chinese customer actually deals with is withholding, and in both taxes it is the payer who accounts to the state. A non-resident enterprise that has not established an institution or place in China pays enterprise income tax on its China-sourced income. That tax is withheld at source, the payer is the withholding agent, and it comes out of each payment as it is made or falls due.^⁠[3] The Law sets the rate on that income at 20 per cent, and the implementing regulations levy it at a reduced 10 per cent.^⁠[4] Value-added tax works the same way. Since 1 January 2026 the Law provides that where an overseas unit or individual carries out a taxable transaction inside China, the purchaser is the withholding agent, unless a domestic agent has been entrusted under State Council rules to declare and pay the tax.^⁠[5] On services the rate is 6 per cent.^⁠[6]

The friction is therefore procedural, and it sits on the Chinese side of the payment. Your customer’s finance department has to withhold, remit and file, and may treat “no fapiao” as “no deduction” whatever the rule says. Registering a Chinese company does not remove that tax; it moves the accounting for it onshore.

Selling direct to Chinese consumers

The cross-border retail import scheme is built around a seller that is not a Chinese company. The operator is defined as an enterprise registered outside China selling to consumers inside China, and it is the owner of title to the goods.^⁠[7] That seller does not register with customs itself: it appoints a domestic agent, which registers with the customs office where the agent is located, carries the duty to declare truthfully and bears civil liability.^⁠[7,8] Purchases are capped at RMB 5,000 per transaction and RMB 26,000 per person per year, and what is bought is a final good for the buyer’s personal use which may not enter the domestic market for resale.^⁠[9] That resale bar is what rules the channel out as a way of supplying Chinese businesses: it reaches consumers, not trade buyers. Shipping on each order and holding stock in a Chinese bonded warehouse first are two separate customs modes.

Why a representative office is not the halfway house

A representative office is the structure founders reach for when they want a presence without a company, and it cannot do the job it is usually asked to do. It has no legal person status, and it may not engage in profit-making activities, save where a treaty or agreement China has concluded or acceded to provides otherwise and China has not reserved on the point.^⁠[10] It cannot hire its Chinese staff directly either: it must entrust the local foreign affairs service unit, or another unit the government designates, to engage them.^⁠[11] The full comparison with a WFOE, including what a rep office is still good for, is set out separately.

Employing anyone in China

An employment relationship begins on the day the employer puts the worker to work, and the employer must keep a register of staff for inspection.^⁠[12] The relationship arises from the work rather than from the document, so paying someone in China on a consultancy invoice does not by itself place the arrangement outside employment. Employer-of-record vendors exist to carry that relationship for a foreign company, and choosing between one and an entity of your own is a separate decision from this one.

Services, and the licence that needs the company first

Selling a service across the border and selling it through a Chinese company are governed by different lists, which is the part usually skipped. Supply from outside China falls under the cross-border trade in services negative list (跨境服务贸易特别管理措施), covering cross-border supply, consumption abroad and the movement of natural persons; fields outside that list are administered on the principle that domestic and overseas suppliers are treated alike. Supply the same service through a commercial presence, meaning a company established in China, and the foreign investment access negative list applies instead.^⁠[13] Registering changes which list you are read against.

Where the activity needs a licence, the order is fixed. A foreign-invested telecommunications enterprise is defined as one established by a foreign investor inside China, and it applies to the State Council industry and information technology department for its telecoms business operating licence after completing market entity registration.^⁠[14] The company comes first and the licence second, because until the company exists there is nothing for the licence to attach to. Where a permission can be held only by a Chinese legal person, that sequence is what the trigger means in practice.

Choosing the no-entity route is the moment the trademark risk appears

Trademark belongs on a page about entity choice because the distributor route creates the exposure it protects against. The Trademark Law refuses registration and prohibits use where an agent or representative registers the principal’s mark in its own name without authorisation and the principal opposes.^⁠[15] The Supreme People’s Court has read agent or representative to cover a distribution or sales agency relationship, and to cover the stage at which the parties are still negotiating one.^⁠[16] That is a description of when the risk starts rather than a safety net. The protection is an opposition fought afterwards on evidence of the relationship, and the conversations that create the exposure begin before any distributor is appointed. The trademark page covers what first-to-file means, and classes, subclasses, bad-faith filings and Madrid against a national filing.

If none of the triggers applies, the no-entity routes reach the market faster and leave it more cheaply, and starting without a company forecloses nothing. Register when something specific requires it, and you will choose the scope, the city and the capital figure knowing what you actually sell in China.

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