How to Smoothly Establish a Subsidiary in Mainland China for a Singapore Company? A Comprehensive Guide Covers All!

How Can a Singapore Company Successfully Establish a Subsidiary in Mainland China? A Comprehensive Guide

In recent years, as economic and trade cooperation between Singapore and China continues to deepen, more and more Singaporean companies are turning their attention to the Chinese market. China's vast consumer market, well-developed industrial chain, and continuously improving business environment have become key factors attracting foreign investment. Especially after the official implementation of the Regional Comprehensive Economic Partnership RCEP, trade facilitation within the region has further improved, offering Singaporean companies more opportunities to enter the Chinese market.

So, how can a Singapore company smoothly establish a subsidiary in mainland China? What are the key steps to pay attention to during the process? This article will provide a practical guide for Singaporean companies interested in entering the Chinese market, covering legal structure, registration procedures, tax compliance, human resources, and more.

1. Clarify Investment Structure and Company Type

Before setting up a subsidiary, Singaporean companies first need to clarify their investment structure and legal entity type. According to Chinese company law and relevant foreign investment regulations, foreign investors can establish the following types of entities in China

1. Wholly Foreign-Owned Enterprise WFOE - suitable for Singaporean companies that wish to fully control their business;

2. Joint Venture JV - appropriate for projects requiring collaboration with local partners;

3. Representative Office RO - suitable for preliminary market research but not allowed to engage in profit-making activities;

4. Branch Office - suitable for short-term or temporary business expansion, but does not have independent legal status.

For most Singaporean companies aiming for long-term development and independent operations in China, establishing a WFOE is the most common choice.

2. Choose the Right Location for Registration

Policies for attracting foreign investment vary slightly across regions in China. Singaporean companies should choose a suitable registration location based on their industry characteristics, target customer base, and available tax incentives. For example

Free Trade Zones such as Shanghai Free Trade Zone, Shenzhen Qianhai, and Guangzhou Nansha offer more relaxed foreign investment access and tax incentives;

Yangtze River Delta and Pearl River Delta regions have mature industrial support systems, ideal for manufacturing and technology companies;

Central and Western cities offer lower labor costs and strong government support, suitable for labor-intensive enterprises.

Some regions also provide tax exemptions, rent subsidies, and talent attraction programs for foreign-invested enterprises. It is worthwhile for companies to conduct in-depth research when selecting a location.

3. Complete the Company Registration Process

Although China's business environment has continued to improve in recent years, establishing a foreign-invested enterprise still requires going through a series of statutory procedures. The following is the basic process for setting up a WFOE

1. Company Name Approval and Business Scope Determination - submit a name pre-approval application to the local Market Supervision Bureau and define the business scope;

2. Submit Application Documents - including articles of association, shareholder identification, legal representative information, lease contract or office address proof;

3. Obtain Business License - after the materials are reviewed and approved, collect the business license;

4. Complete Post-establishment Procedures - such as tax registration, bank account opening, foreign exchange registration, and social insurance and housing fund account setup;

5. Apply for Industry-Specific Licenses - if the business involves special sectors such as education, healthcare, or finance, apply for operating licenses from the relevant authorities.

It is worth noting that since 2025, many provinces and cities across China have implemented an online one-stop service, allowing companies to submit applications through government platforms, significantly reducing approval time.

4. Tax and Compliance Considerations

After establishing a subsidiary in China, Singaporean companies are required to pay corporate income tax, value-added tax VAT, and other related taxes. The current standard corporate income tax rate in China is 25%. However, if the company is located in a high-tech enterprise development zone, it may enjoy a preferential tax rate of 15%.

Moreover, the Avoidance of Double Taxation Agreement DTA signed between Singapore and China in 2007 and updated multiple times provides convenience for Singaporean parent companies to repatriate profits from China. Companies should fully leverage this policy advantage to optimize cross-border tax planning.

With increasing compliance requirements for foreign enterprises in China, companies should establish robust financial, tax, and legal management systems from the early stages to ensure compliance with Chinese labor laws, environmental protection laws, data security laws, and other relevant regulations.

5. Human Resources and Localization Strategies

Talent is crucial to a company’s success. When entering the Chinese market, Singaporean companies often face challenges related to language, culture, and management practices. The following strategies are recommended

Hire Local Management Teams - local executives familiar with the Chinese market, regulations, and business culture can help the company adapt more quickly;

Collaborate with Local Service Providers - such as HR agencies, legal advisors, and financial consultants to reduce initial operational risks;

Focus on Cultural Integration - promote communication and understanding between Singaporean and Chinese employees to build a multicultural team.

In recent years, China has vigorously promoted digital transformation. Singaporean companies are advised to actively adopt digital management systems to improve operational efficiency.

6. Leverage Policies and Platform Resources

Singaporean companies setting up subsidiaries in China can also benefit from various policy and platform resources

Ministry of Commerce and local commerce bureaus provide guidance on setting up foreign-invested enterprises;

Sino-Singapore Chongqing Strategic Connectivity Demonstration Projects and Suzhou Industrial Park offer policy support;

China International Import Expo CIIE and Canton Fair provide platforms for market exposure and expansion.

Notably, in 2025, China continues to send strong signals of stability for foreign investment, with many regions introducing policies encouraging foreign capital to participate in local economic development - offering excellent opportunities for Singaporean enterprises.

Conclusion

Establishing a subsidiary in the Chinese market presents both opportunities and challenges. Singaporean companies that thoroughly understand Chinese laws and regulations, plan their corporate structure carefully, make full use of policy benefits, and focus on localization will be better positioned to establish a strong foothold and achieve long-term growth. As Sino-Singaporean economic and trade cooperation deepens, more Singaporean enterprises are expected to thrive in the vibrant Chinese market.