Starting an Import and Export Business in China: What Foreign Companies Need to Know

China's position as the world's largest trading nation makes it one of the most significant markets for import and export businesses. Foreign companies that establish a proper trading presence in China gain direct access to one of the most developed manufacturing and distribution networks in the world, along with the ability to sell into one of the fastest-growing consumer markets.

Setting up correctly from the start is what makes the difference between a trading operation that runs smoothly and one that runs into compliance problems that could have been avoided.

Choosing the Right Business Structure for Trading in China

The business structure you choose determines what trading activities your company can legally conduct in China. For foreign companies involved in import and export, two structures are most relevant.

A Foreign-Invested Commercial Enterprise (FICE) is specifically designed for trading businesses. It allows a foreign company to import and export goods, engage in wholesale and retail distribution within China, and operate commercially across the supply chain. If your primary activity is buying and selling goods across the Chinese border, an FICE is the structure to consider.

A trading WFOE (Wholly Foreign-Owned Enterprise) is the broader structure for foreign companies that want full operational control. A trading WFOE covers import and export activities alongside the ability to issue invoices, sign commercial contracts, and manage operations directly. Many foreign trading companies choose this structure for the operational flexibility it provides.

The right choice depends on the specific nature of your trading activities, the products involved, and your longer-term plans for the China operation. Getting this decision right before registration avoids a costly restructuring later.

What You Can and Cannot Import and Export

Not all goods move freely across China's borders. Understanding the general framework before selecting your product categories helps avoid surprises during the registration and licensing process.

Freely tradeable goods cover the majority of commercial products and can be imported and exported without special licences beyond the standard trading entity requirements.
Restricted goods require specific licences or approvals before they can be traded.

Categories that commonly require additional permits include certain agricultural products, chemicals, technologies with dual-use potential, medical devices, and goods subject to international trade agreements. The specific requirements depend on the product category and the direction of trade. Prohibited goods cannot be legally imported or exported, regardless of the entity structure or licences held.

Before finalising your product scope, it is worth confirming which category your goods fall under and what, if any, additional approvals are required. This directly affects how your business scope should be written in the registration documents.

Why Business Scope Matters More Than You Might Expect

In China, your company's registered business scope defines what activities your entity is legally permitted to conduct. For trading businesses, this means specifying the categories of goods you intend to import or export.

Under China's current registration framework, business scope entries must be selected from the national standardised directory. Vague or non-specific descriptions are automatically rejected. The first item listed in your scope determines your company's official industry classification, which affects tax treatment and regulatory oversight.

Under China's current registration framework, business scope entries must be selected from the national standardised directory. Trading a product category that is not included in your registered scope is a compliance breach, not a minor administrative oversight.

Customs Registration and Operational Compliance

All companies engaged in import and export in China are required to register with customs authorities separately from the company registration process. This customs registration is what allows the entity to legally clear goods through Chinese customs.

Depending on the products being traded, additional regulatory registrations or certifications may be required before goods can be imported or exported. These requirements vary by product category and should be confirmed for your specific product range as part of the setup planning process.

Working with an experienced local compliance team or registration service provider reduces the risk of missing a required step that could delay your first shipment.

The Registered Address Requirement

Like all foreign-invested enterprises in China, a FICE or trading WFOE requires a physical office address as the registered company address. This must be a commercial or office property with a formal lease agreement, confirmed before the business licence application can proceed.

A virtual office address does not satisfy this requirement and will be rejected. Under China's current regulations, the registered address must reflect a genuine operational presence, not a correspondence-only arrangement.

A serviced office in a Grade A commercial building provides a compliant registered address immediately, with the formal lease documentation already in place. For foreign companies entering the Chinese market, this is the most efficient way to satisfy the address requirement without taking on a long-term conventional lease at the point of entry.

Servcorp's company registration service in China includes a private serviced office as the registered address component, giving your trading entity a compliant address in a recognised commercial building in Shanghai or Beijing from the first day of operations.

Planning for a Successful Market Entry

Starting an import and export business in China rewards careful upfront planning. The entity structure, business scope, product categories, and registered address all interact, and decisions made at the registration stage have lasting operational consequences.

Foreign companies that enter with the right structure, a clearly defined product scope, and a compliant registered address are positioned to begin trading without the delays and costs that come from having to correct errors made at the foundation stage.