What it really costs to set up and run a company in China

Registering a company in China carries no government fee, and Shanghai gives a new company its first four chops free. What decides the budget is what runs every year after: bookkeeping and filings even at zero revenue, and above all staff. One employee on Shanghai’s minimum bases costs about RMB 23,300 a year in social insurance, plus the housing fund.

Most quotes you will be shown are for the wrong number. Registration is the cheap, one-off part. What the company costs every year afterwards is the number that decides your budget, and most of it is under your control. This page sets out the costs that are fixed by rule, using Shanghai as the worked example, and says how the rest is priced so you can compare quotes. Market prices for agents, rent and services vary too much by city and provider to print.

How much does it cost to register a company in China?

Nothing, in government fees. The national enterprise registration fee has been suspended since 1 January 2015,^⁠[1] and Shanghai’s own guide states that setting up a company, domestic or foreign-invested, involves no payment to any government department.^⁠[2] The city also supplies a new company’s first set of four seals free, and the guide says the main banks charge nothing to open a basic account.^⁠[2]

What you do pay for is outside government: a registered address, the provider who prepares and lodges the documents if you use one, and, for a foreign investor, the notarisation and legalisation of the investor’s proof of existence, or an apostille where a treaty applies (SAMR Order No. 52, Article 24),^⁠[3] and a Chinese translation for the registry. How that set is assembled is in the apostille guide. What a registration quote usually leaves out is its own list, in eight things a registration quote leaves out.

What does a company cost every year at zero revenue?

The price of its filings, because they are due whether it trades or not. A missed return brings an order to put it right, and a fine of up to RMB 2,000, or RMB 2,000 to 10,000 where the case is serious (Tax Collection and Administration Law, Article 62).^⁠[4] The calendar every company carries:

• Tax returns, monthly or quarterly, nil returns included.
• The corporate income tax annual return, within five months of the year end (Enterprise Income Tax Law, Article 54).^⁠[5]
• The annual report, between 1 January and 30 June, published on the national system; a company that misses it goes on the abnormal operations list (Interim Regulation on Enterprise Information Publicity, Articles 8 and 18).^⁠[6]
• Books, kept in-house or, where the work is outsourced, by an approved bookkeeping agency (Accounting Law, Article 34).^⁠[7] This is the recurring fee most small companies pay; agencies usually price nil-filing and trading companies differently, so ask for both.
• Invoices, issued through the tax authority’s national electronic platform, free of charge (STA Announcement 2024 No. 11, Article 5).^⁠[8]

The full calendar, with each deadline and its source, is in what annual filings a Chinese company must make.

Do you need to pay for an office?

Not necessarily, in Shanghai. A company registers one domicile, and provinces may make more convenient local rules (Regulation on the Registration of Market Entities, Article 11); it must show lawful use of the premises, unless the registry can verify them by data sharing (SAMR Order No. 95, Article 18).^⁠[9,10] Shanghai’s local rules let several entities register at one address, and let a company trade away from its registered address without a further registration filing at the market regulator, unless another law or administrative regulation provides otherwise (Shanghai Regulation on Optimising the Business Environment, Article 33).^⁠[11]

So a registered address in a business park and a team working from somewhere else can be lawful in Shanghai. Other cities have their own rules; check them before you sign a lease. Signing a whole-floor lease at this stage, with deposits, management fees and fit-out, is the classic way to turn a small company into an expensive one.

What does an employee cost in China?

Salary plus about a quarter again in social insurance, and the housing provident fund on top, at Shanghai’s minimum bases. The social insurance contribution base runs from RMB 7,546 to RMB 37,731 a month from 1 July 2026,^⁠[12] and the employer pays these rates on it.

Contribution	Employer rate	Set by
Pension	16%	Shanghai’s rate under the national plan 国办发〔2019〕13号, which allows 16%
Medical, including maternity	9%: 8.5% basic plus 0.5% local supplement	沪医保规〔2026〕2号, to 28 February 2027
Unemployment	0.5% in 2025; we found no notice setting the 2026 rate	沪人社规〔2024〕25号, whose rate is written for 2025; the notice itself runs to 31 December 2029
Work injury	0.2% to 1.9% by industry class, adjusted up or down by a floating rate set on the employer’s claims and accident record	沪人社规〔2026〕2号, to 31 December 2030
Housing provident fund(住房公积金)	At least 5%	Housing Provident Fund Regulation, Article 18

On the minimum base, pension, medical, the lowest work injury class and 2025’s unemployment rate come to 25.7%, or about RMB 23,300 a year per employee. The housing provident fund is extra: at least 5% of a base whose Shanghai floor is the minimum wage, about RMB 1,650 a year more. Base contributions on a real Shanghai salary and the employer’s share scales with it, up to the ceiling.

• The housing provident fund is compulsory. An employer registers each new hire within 30 days and pays at least 5% of the employee’s prior-year average monthly wage (Regulation, Articles 15, 18 and 20). Since 20 September 2026, an employer that fails to register and does not correct it is fined RMB 50,000 to 300,000 (Article 39).^⁠[17] In Shanghai, foreign employees may contribute by agreement rather than as of right (Shanghai Measures, Article 6).^⁠[18]
• The minimum wage in Shanghai is RMB 2,740 a month, excluding the employee’s own social insurance and housing fund contributions.^⁠[19]
• The company withholds income tax on salaries every month (Individual Income Tax Law, Articles 9 and 11).^⁠[20]

Why do small companies in China pay so little tax?

Because two concessions run to 31 December 2027. The headline corporate income tax rate is 25% (Enterprise Income Tax Law, Article 4),^⁠[5] and VAT is 13%, 9% or 6% under the VAT Law in force since 1 January 2026 (Article 10).^⁠[21] Small companies rarely pay either.

• Corporate income tax at an effective 5%. A small and thin-profit enterprise (小型微利企业) counts 25% of its taxable income and pays 20% on it (MOF and STA Announcement 2023 No. 12, Article 3). It qualifies with annual taxable income of no more than RMB 3 million, no more than 300 staff (dispatched workers included) and total assets of no more than RMB 50 million, with staff and assets taken as quarterly averages over the year, in an industry the state does not restrict or prohibit (Article 5).^⁠[22]
• VAT that may be nil. A small-scale taxpayer (annual sales of no more than RMB 5 million, VAT Law Article 9) pays VAT at a levy rate of 3% (Article 11).^⁠[21] Sales under a threshold of RMB 100,000 a month, or RMB 300,000 a quarter, are exempt. Where the threshold is reached, the 3% is reduced to 1% on everything except the sale or lease of immovable property and the transfer of land use rights (MOF and STA Announcement 2026 No. 10, Articles 1 and 3).^⁠[23]
• Stamp duty and local surcharges halved for small-scale taxpayers and small and thin-profit enterprises, to the same date (Announcement 2023 No. 12, Article 2).^⁠[22]

Does registered capital cost anything?

It is a commitment rather than a fee, which is what makes it dangerous. A limited liability company formed since 1 July 2024 must have its subscribed capital paid in within five years (Company Law, Article 47); one registered on or before 30 June 2024 must, before 30 June 2027, bring any later payment date forward to 30 June 2032 or earlier (State Council Order No. 784, Article 2).^⁠[25,26] Register RMB 10 million to look substantial and you have committed to funding RMB 10 million.

The one direct cost is stamp duty on the account books, charged on paid-in capital and capital reserve, and later only on increases (Stamp Duty Law, Articles 5 and 11),^⁠[27] and halved for small companies to the end of 2027. How to choose a figure you can fund is in what registered capital is.

What does foreign ownership add?

Administration, not tax. Domestic and foreign-invested companies have been taxed under one Enterprise Income Tax Law since 1 January 2008, when it replaced the separate foreign-enterprise tax law (Article 60),^⁠[5] so a wholly foreign-owned enterprise gets the same 5% and the same VAT treatment as a local company. The extra is paperwork:

• Legalised investor documents at formation (SAMR Order No. 52, Article 24).^⁠[3]
• Foreign investment information, reported through the same annual report.
• An annual audit. The Company Law requires the annual financial report to be audited by an accounting firm in accordance with law (Article 208),^⁠[25] and the bank reviews audited financial statements before it remits a profit of more than US$50,000 (SAFE Huifa [2017] No. 3, item 7).^⁠[28] How the rest of the money comes out is in getting your money out of China.

What happens if you just stop filing?

Fines, a public listing, and a harder exit. Missed returns are fined (Tax Collection and Administration Law, Article 62);^⁠[4] a missed annual report puts the company on the abnormal operations list, which anyone can see (Interim Regulation, Article 18).^⁠[6] A legal representative can be stopped from leaving China where the company owes tax and gives no security (Tax Collection and Administration Law, Article 44).^⁠[4] The better-known restrictions on flights and high-speed rail can be imposed on a debtor who does not perform an enforceable judgment or award in time, and for a company they reach its legal representative and the others responsible for the debt (SPC Provisions, Articles 1 and 3).^⁠[29] Deregistering later is harder than staying compliant would have been; if a company has stopped trading, close it properly, as how to close a company in China explains.

Should you pay yourself a salary through the Chinese company?

Not necessarily, and the decision has consequences on both sides of the border. A salary brings monthly income tax withholding^⁠[20] and, for an employee, social insurance and the housing fund; it can also bear on where you and the company are treated as tax-resident. Read tax-residency traps for remote founders before you set up payroll.

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