Legal Insight

Foreign-Invested Trading Company in China: Business Scope, Import and Export

What foreign investors should check when establishing a trading company in Chinese Mainland for sourcing, sales, import or export.

September 29, 2026 · Jay Zhifeng Chen

A practical guide for foreign investors establishing a trading company in Chinese Mainland to source, sell, import or export goods.

A foreign-invested trading company is usually a Chinese limited liability company whose business model includes purchasing, selling, importing or exporting products. The main legal work is not finding the label “trading company”; it is aligning the business scope, foreign-investment access, product regulation, customs arrangements and actual revenue model.

Since the former general filing requirement for foreign trade operators was removed at the end of 2022, investors should not rely on old incorporation checklists that still treat that filing as a standard step. Customs filing and product-specific permits can still matter. This guide forms part of our Foreign Investment & China Market Entry resources.

Key takeaways

Define what the company will actually buy, sell, import and export before drafting the business scope.
The foreign-investment negative list and the generally applicable Market Access Negative List are separate checks.
The former general foreign-trade-operator filing has been abolished, but customs registration and product-specific licences may still be required.
A broad product strategy needs a workable compliance process; one company cannot lawfully trade every product merely because the business scope is drafted broadly.
Banking, customs, tax, invoices, warehouse arrangements and contracts should be designed around the actual flow of goods and money.

1. Start with the transaction flow, not the company name

Map the commercial process: who buys from whom, where goods are stored, who imports, who exports, who invoices the customer, who receives foreign currency, and whether sales occur domestically, cross-border or through e-commerce channels.

This process determines which registrations, contracts and licences need attention. A company sourcing Chinese goods for export has a different risk profile from a company importing regulated products for domestic sale.

2. Draft the business scope around real activities

The business scope is recorded in the articles and registration information. It should be broad enough for the planned operation but specific enough to identify regulated activities. Where a product or service requires approval or a licence, a generic trading description does not remove that requirement.

Before incorporation, identify the product categories expected in the first phase and any likely expansion. If the business may trade a wide range of ordinary goods, build a process for checking new categories rather than assuming the initial scope covers every future product.

3. Check both foreign-investment access and general market access

The 2024 Foreign Investment Negative List identifies foreign-investment restrictions and prohibitions. The 2025 Market Access Negative List applies more generally to market access. Sector-specific laws, licensing rules and product standards may add another layer.

For ordinary trading activities outside restricted sectors, full foreign ownership may be possible, but the actual product line still matters. See Can Foreign Investors Enter This Industry in China?.

4. The old foreign-trade-operator filing is no longer a standard incorporation step

China removed the statutory requirement for foreign trade operators to complete the former MOFCOM filing at the end of 2022. Businesses should therefore be cautious with older guides that still list that filing as mandatory.

This does not mean import and export operations are registration-free. Importers and exporters may need customs filing as an import/export consignee or consignor, and regulated goods can require licences, quotas, inspection, certification or other approvals. The Customs online guide also explains the current filing routes, including integration with market-entity registration in appropriate cases.

5. Product compliance can determine whether the model works

Before importing or selling goods domestically, identify applicable product standards, labelling, certification, registration, inspection, environmental, food, medical-device, cosmetics, hazardous-material or other rules. The relevant requirements vary materially by product.

Where the company plans to trade “general merchandise” from a wholesale market, create a prohibited/restricted product list and an internal approval process for new categories. Market-entry flexibility should not become uncontrolled compliance exposure.

6. Plan tax, invoices, customs and foreign-exchange operations together

The legal entity needs a workable operational chain for purchase invoices, sales invoices, customs declarations, foreign-currency receipts and payments, logistics documents and accounting. The legal agreement with customers and suppliers should match the entity that actually invoices, pays and takes title to the goods.

Where an overseas affiliate or Hong Kong company also participates in the supply chain, document each entity’s role rather than allowing payments and contracts to drift between group companies without a clear basis.

7. Registered capital should reflect inventory and working-capital needs

A trading company that pays suppliers before collecting from customers can have material working-capital requirements. Inventory, deposits, freight, duties and taxes can consume cash before revenue is received.

Use a realistic cash-flow model when setting registered capital and funding. See How Much Registered Capital Should a Foreign-Invested Company Have in China?.

Before you act

List the actual products and sales channels for the first phase.
Check foreign-investment and general market-access restrictions.
Identify product-specific licences, standards and certifications.
Confirm customs filing and import/export procedures for the planned model.
Map the contract, invoice, payment and goods flows.
Budget for inventory, deposits, logistics and tax timing.

Frequently asked questions

Does a foreign-invested trading company need a Chinese shareholder?

Not in every case. Full foreign ownership may be possible in many ordinary trading activities, but the particular products and business model should be checked against the current foreign-investment and sector rules.

Do I still need the old “foreign trade operator filing”?

The general filing requirement was removed from the Foreign Trade Law at the end of 2022, and local commerce authorities stopped processing that filing. Customs and product-specific procedures can still apply.

Can the company import and export any product?

No. Product-specific prohibitions, licences, quotas, inspection, certification and other regulatory requirements can apply. The company should check each regulated category before trading it.

Can I operate from Hong Kong and use the Chinese company only for sourcing?

Potentially, but the contracts, invoicing, customs, foreign-exchange and tax positions should reflect the real functions of each entity. Avoid a structure where the paperwork and actual commercial conduct contradict each other.

How should I choose the city?

Consider suppliers, logistics, warehouse needs, staff, customer location, local procedures, premises, sector licences and operational cost. Incorporating where the business will genuinely operate is usually more useful than selecting a city only for marketing reasons.

Principal official sources

Discuss your China market-entry plan with Jay Chen

If you are considering establishing, acquiring or restructuring a business in Chinese Mainland, contact Jay Chen with a short description of the investors, proposed activities, preferred location and intended ownership structure. After conflict clearance, the scope can be tailored to the decisions that need to be made before incorporation or investment.

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About Jay Chen

Jay Zhifeng Chen (陈植锋), known professionally as Jay Chen, is a PRC-qualified lawyer and partner at Guangdong Zhuojian Law Firm in Shenzhen. He is also a registered foreign lawyer in Victoria, Australia, and a CPA (Australia). His prior in-house legal roles at Foxconn, Hytera and Avnet inform his commercially focused approach to China-related investment, contracts, compliance and cross-border disputes.

This article provides general information, not legal advice for a particular investment or company. The legal and regulatory position depends on the investor, sector, location, transaction structure and current rules. Reading this article or submitting an enquiry does not create a lawyer-client relationship.

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General information only; not legal advice. Legal outcomes depend on the facts and applicable law.

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