Set up and run your company in mainland China

01 · ChinaMNC

Why China for Bulgarian founders and companies

For Bulgarian businesses, China is usually a market of scale and supply chain depth. Companies in machinery, electronics, food and agriculture, cosmetics, logistics, furniture, chemicals and consumer goods often look at China both as a customer market and as a sourcing base. A local presence can shorten communication lines with factories, make quality control easier and support long-term supplier relationships.

• Market proximity: a mainland entity can contract, invoice and support Chinese customers directly.
• Sourcing control: closer oversight of production, inspections and logistics.
• Brand and IP: registered marks and local contracts are easier to enforce with a local operating company.
• E-commerce and distribution: local entities are often expected by platforms, landlords and larger buyers.
• EU context: as an EU member state, Bulgaria gives founders a familiar regulatory home base while they expand abroad.

At the same time, China is not a single market. Consumer expectations, pricing, distribution and regulation vary by region. Before registering, define which products or services you will actually sell or source, which city fits that activity, and whether a local partner is genuinely needed. A clear commercial plan makes every later decision — structure, capital, address and staffing — easier and cheaper.

02 · ChinaMNC

WFOE, joint venture or representative office

The three structures most often considered by foreign investors are the wholly foreign-owned enterprise (WFOE), the joint venture (JV) and the representative office (RO). Each fits a different purpose.

• WFOE: a limited liability company owned entirely by the foreign investor. It can carry out permitted business activities, invoice customers, employ staff and repatriate profits. It is the most common choice for companies that want full operational control. The trade-off is full responsibility for compliance, staffing and capital.
• Joint venture: a company shared with one or more Chinese or foreign partners. It can open doors to local networks, licences or land, but requires careful shareholder agreements, governance rules and exit provisions. Choose a JV when a partner brings something you cannot easily build alone.
• Representative office: a non-profit contact office for market research, liaison and promotion. It cannot sign sales contracts or invoice customers directly. It suits companies testing the market or managing suppliers before committing to a full entity.

Some activities are restricted or require specific approvals, and negative lists define where foreign investment is limited or prohibited. Sector rules matter more than structure labels, so check your exact activity with local advisers before choosing. Bulgarian companies should also consider whether a Hong Kong or other regional holding structure is appropriate for their group, based on their own tax and banking situation.

03 · ChinaMNC

The five-step registration process

Registration in mainland China generally follows a sequence, though details and timelines vary by city and by the local authority handling your file. Treat the steps below as a planning framework rather than a fixed timetable.

• Step 1 — Feasibility and structure: confirm your business scope, sector restrictions, city, ownership model and capital plan. Decide who the legal representative and supervisors will be.
• Step 2 — Name and scope: reserve a company name and draft a business scope that matches what you will really do. Overly broad scopes can create compliance burdens later.
• Step 3 — Approvals and filings: where required, obtain sector or investment approvals, then complete the market entity registration and related filings such as tax, customs if relevant, and foreign exchange.
• Step 4 — Seals, accounts and capital: have company seals made, open the bank accounts, and handle capital contribution in line with the registered capital and applicable foreign exchange rules.
• Step 5 — Start operating: register with the tax authority, set up accounting and payroll, arrange premises, hire staff and complete any sector licences before trading.

Plan for document legalisation, translation and local coordination. Many Bulgarian founders find the process manageable when a local adviser handles filings while the founder focuses on commercial decisions. Budget time for banking and licensing, which often take longer than company registration itself.

04 · ChinaMNC

Documents you will typically need

Document requirements depend on the structure, city and activity, and authorities may request additional items. The list below covers what is commonly asked from a foreign corporate or individual investor.

• Investor documents: certificate of incorporation or equivalent, articles, and a current extract from the commercial register for companies; passport copies for individuals.
• Ownership evidence: documents showing the ultimate beneficial owners and the group structure, where relevant.
• Legalisation and translation: notarisation and legalisation or apostille as required, plus Chinese translations prepared to local standards.
• Corporate decisions: board or shareholder resolutions authorising the investment, the legal representative and signatories.
• Name and scope: proposed company names and a drafted business scope.
• Address: lease or proof of registered address, plus landlord documents where requested.
• People: identity documents and contact details for the legal representative, supervisors, directors and authorised signatories.
• Capital and banking: information on registered capital, funding source and the proposed bank account arrangements.

Keep originals consistent across all documents: names, addresses and shareholding should match exactly. Inconsistent paperwork is a frequent cause of delay. Bulgarian companies should also check whether documents need to be legalised in Bulgaria before translation, and allow time for that step.

05 · ChinaMNC

Registered address, business scope and premises

Every mainland company needs a registered address, which must be a real location accepted by the local authority. In many cities you can use a serviced office or an incubation address, while in others the address must match the actual operating site. Landlord cooperation matters: the property owner may need to provide ownership documents and sign the lease in a form the authority accepts.

The business scope defines the activities your company may carry out. Write it to reflect your real commercial plan, including the specific products or services you will sell or source. Some activities require a separate licence or filing before you can start; examples can include food, cosmetics, certain imports, logistics or regulated services. A scope that is too narrow may block invoicing, while one that is too broad can trigger extra reporting or approvals.

• Check the address: confirm the landlord can support registration and that the use of the property fits your activity.
• Match scope to revenue: include the activities you will actually invoice, not aspirational ones.
• Plan for licences: identify sector approvals early, as they can affect your launch date and premises.
• Consider expansion: if you expect to add products, check how the scope can be amended later.

For Bulgarian companies sourcing from China, a warehouse or inspection address may matter more than a sales office. Choose premises based on operations, not only on cost.

06 · ChinaMNC

Banking, tax and visas in practice

Opening a corporate bank account is often the step that takes the most patience. Banks apply their own due diligence, so expect questions about your shareholders, business model, expected transactions and counterparties. Prepare a clear explanation of your China activity and consistent supporting documents. Once the account is open, keep records of capital contributions and cross-border payments in line with foreign exchange rules.

On tax, a mainland company is generally subject to corporate income tax and, depending on activity, value-added tax and other levies. Rates, incentives and filing obligations depend on your sector, location and size, and can change. Work with a qualified accountant from day one: bookkeeping, invoices, payroll and annual filings all need local systems. Bulgarian founders should also consider how profits will be repatriated and how their home-country tax position interacts with the Chinese one, ideally with cross-border advice.

For travel and work, business visas allow short visits, but anyone employed and working in China generally needs a work permit and a residence permit tied to employment. The process involves the employer, local authorities and document checks. Plan hiring and visa timing before staff arrive. Keep permits and registrations current; lapsing them can disrupt operations.

• Banking: expect due diligence and prepare a clear business narrative.
• Tax: appoint a local accountant and keep records from day one.
• Visas: separate business visits from employment; plan permits early.

07 · ChinaMNC

Common mistakes to avoid

Many problems are avoidable with a little planning. These are the issues Bulgarian founders most often run into when entering mainland China.

• Choosing a city before the business model: pick the location that fits your customers, suppliers, talent and licences, not simply the cheapest office.
• Copying a template scope: a generic business scope can block invoicing or trigger unnecessary approvals. Match it to real activity.
• Underestimating banking: assume account opening will require time and documentation, and do not sign major contracts before funds can move.
• Ignoring sector rules: check restricted activities, licences and import requirements before committing capital.
• Weak contracts and IP protection: register trademarks early and use clear supplier, distribution and employment agreements.
• Poor document consistency: mismatched names, addresses or shareholding across documents cause delays.
• No local accounting: late or incomplete filings create penalties and management distraction.
• Assuming rules are uniform: practice varies by city; verify locally rather than relying on general guides.

Finally, avoid treating China as a short experiment. A local entity carries ongoing compliance costs, so budget for accounting, address, staffing and renewals. If you are only testing demand, consider an agent, distributor or representative office first. A staged approach often protects capital while you learn the market.