Can you do business in China without a Chinese company?

Search this question and you’ll hit two camps. Some consultants say it barely works. Some lawyers say forming a Chinese company is often the mistake.

Neither answer helps until you separate what you do from where you do it. This guide is part of our legal basics of a website in China. It’s a map, not legal advice.

What can you do without a Chinese company?

Most things done from outside the mainland, and little that puts people or servers inside it.

Harris Sliwoski draws the line clearly. A Chinese entity is legally necessary if you’ll have employees in China, or to be paid in RMB.

If neither is true, the firm says you probably don’t legally need one.¹

What you want to do	Without a Chinese entity?	What decides it
Publish a Chinese site hosted abroad	Yes, no ICP needed 330	Mainland servers trigger the ICP
Appear on Baidu	Yes, per Chinafy 31	Speed from China. See ranking without an ICP
Serve a Chinese client from abroad	Yes 1011	The client generally withholds the tax
Sell products through a distributor	Yes 2	Who controls the brand and store
Register a trademark in China	Yes 12	Through a local representative
Issue a fapiao	No 8	Only a China-VAT-registered entity can
Host on mainland servers	Not on your own 30	The ICP needs a Chinese entity
Employ staff in China	No 15	See below

For sales without a presence, read how to sell to Chinese clients without being in China. For hosting, start with our ICP license guide.

Which common claims don’t hold up?

Some guides overstate the limits. FDI China, which sells WFOE setup, answers “Technically, yes. Realistically, not well.” in its 2025 guide.⁴

It then lists what you can’t do, and several items conflict with other sources.

Claim in FDI China’s guide 4	What other sources show	Strength of the evidence
You can’t file trademarks under your business name	Foreign applicants can file directly with a signed power of attorney and a local representative 12	Strong
You can’t open Alipay or WeChat Pay merchant accounts	A direct account may need one, but Stripe lists 22 business locations outside the mainland that accept WeChat Pay from customers in China 13	Strong for WeChat Pay through Stripe. Alipay not checked
You can’t open a business WeChat account	Overseas companies can own a Service Account, not a Subscription Account 14	Vendor source
You can’t run ads on Baidu	Possible through an authorized agency, not on self-serve. The same source lists a landing page hosted in China 15	Vendor source that sells this service

FDI China may be right about opening an account directly with the wallets. We didn’t read their own rules. And a Service Account isn’t a store.¹⁴

Being paid in RMB is the open point. Harris Sliwoski and FDI China both tie it to an entity.¹⁴ Yet Stripe says CNY is available in every supported account country for WeChat Pay.¹³ We read no primary text that settles this, so ask a local adviser.

So “impossible” is too strong, and “just as good” would be too. Through agencies and providers, you depend on someone else’s rules and fees. Compare Baidu SEO and Baidu Ads before paying for either.

Can you have people working in China?

Not as your own employees, according to the sources we read. China’s Labor Contract Law covers organizations within China, such as enterprises.⁶

A foreign company with no entity or representative office generally doesn’t qualify as an employer, Shaohe Law Firm wrote in July 2026.⁵

Calling someone a contractor doesn’t settle it. Harris Sliwoski says to presume that anyone paid that way in China is an employee.¹

Shaohe reads two Supreme People’s Court guiding cases as looking past the contract to the actual working arrangement, and expects the same for these setups.⁵

An employer of record is the usual workaround, and it has limits.

• Control: If staff work under your direct oversight, you could be deemed the employer, Shaohe argues, though no directly comparable precedent exists.⁵
• Registration: Shaohe also flags the rule on unregistered activity,⁵ which provides for a stop order and a fine of RMB 50,000 to 200,000.⁷
• Scale: Shaohe sees the model as best suited to short, project-based work of limited size.⁵

That taxable presence is called a permanent establishment. China Briefing says it exposes China-sourced profits to 25% corporate tax, and that a short setup running longer than planned can count from its start date.²¹

The US treaty’s services test is more than six months in any twelve,²² and other treaties may differ.

Does a representative office or a Hong Kong company solve it?

Neither one replaces a mainland company for sales. They solve different problems.

Structure	Is it a Chinese entity?	Can it sell?	Limits
Representative office	Registered in China, no legal personality 7	No, non-profit activities only 7	One chief representative and 1 to 3 others 7
Hong Kong company	No, a separate jurisdiction 23	Abroad, like any foreign company	Doesn’t meet mainland entity requirements 23
WFOE	Yes	Yes, within its business scope 26	Sources disagree on timing: 3 to 5 months 1, 3 to 6 months 34, 8 to 14 weeks 35

A representative office may do market research, promotion and liaison for its parent.⁷

For-profit activity can bring a fine of RMB 50,000 to 500,000, confiscation of gains, and in serious cases loss of its registration.⁷

A Hong Kong company “will no more help you get legal in China” than one formed in New York or London, as Harris Sliwoski put it in 2016.²³

Hosting there is a separate choice, covered in Hong Kong or mainland hosting.

Our guide to WFOEs covers what a foreign-owned company changes.

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How do you get paid and protect yourself?

Your main risks without an entity are tax on each payment and collecting what you’re owed. Work through these before you sign.

1. Confirm who you’re signing with. Harris Sliwoski says checks go smoothly about 80% of the time. The rest can reveal, say, a Hong Kong or Taiwan company.²⁴
2. Put the main agreement in Chinese. Banks often expect it,¹⁶ and Chinese courts almost always rely on the Chinese version when texts conflict.²⁶
3. Decide who bears the tax. Under the VAT Law, the buyer withholds on a foreign seller’s taxable sale in China, unless a Chinese agent files instead.⁹ DLA Piper’s example is a foreign consulting firm advising a Chinese company without entering China.¹¹ The EU SME Centre advises stating in the contract that the amount payable is net of tax.¹⁰
4. Take money first. Harris Sliwoski’s rule is a substantial upfront payment, and no final work until you’re paid in full.¹⁷
5. Prepare the bank paperwork. Payments can be refused over unsigned invoices or documents not in Chinese.¹⁷ Above USD 50,000 per payment, the payer generally makes a tax filing first.²⁷
6. Choose how disputes end. See the note below, and have a lawyer draft this clause.

A 2010 guide called exclusive US court jurisdiction problematic, for lack of a treaty.²⁸ DLA Piper’s 2024 review says US money judgments are now generally eligible for enforcement.¹⁹

Finality and punitive damages remain risks.¹⁹

China has applied the New York Convention on arbitral awards since 1987, for commercial disputes and awards made in other member states.¹⁸ A revised Arbitration Law took effect on March 1, 2026.²⁰

Income tax is where the sources disagree. The EU SME Centre, in an undated FAQ, treats services to Chinese clients as income generated in China.¹⁰ The income tax regulations place service income where the work is performed.²⁹ Ask a tax adviser how that applies to work done abroad.

Our fapiao guide covers invoicing.

Which legal issues follow you anyway?

Having no entity removes some duties and leaves others in place. These apply to foreign companies too, depending on what you do.

• Trademarks: China is first-to-file, so Harris Sliwoski says to file before signing a distributor or shipping an order.²
• Brand control: Where the platform allows it, set up online stores so you control them from day one. Give a distributor permission to use your mark, not ownership.²
• Personal data: China’s privacy law can reach processing abroad when you offer products or services to people in China.²⁵ See our privacy guide.
• Your content: The Cybersecurity Law has regulators order banned information from abroad blocked, so hosting abroad doesn’t put a site out of reach.³⁶ See sensitive content on a Chinese website.

When does a Chinese company become worth it?

When a real need appears, not as your first step. Harris Sliwoski calls forming one you don’t need “a very common and expensive mistake,” and says closing one is harder still.¹

1. You hire in ChinaEntity
2. You want to be paid in RMBEntity, according to Harris Sliwoski
3. Your clients require a fapiaoEntity
4. You want to host in mainland ChinaEntity
5. You are testing demand from abroadNo entity

Our guide to entering the Chinese market puts that choice in context.

The bottom line

You can often do business in China without a Chinese company, as long as your staff, servers and fapiao aren’t part of the plan.

Keep each risk visible: tax on payments, contract enforcement, and anyone working for you in China. Confirm your own structure with a local adviser before you sign.

How Index in China can help

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We don’t form companies or give legal advice, and we’ll tell you when your case needs a local adviser. See what we do.

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