Setting Up a China Subsidiary of a German Company

A German company can establish a wholly owned subsidiary in China where the proposed business permits full foreign ownership. For a German CFO or expansion manager, an early practical question is how to demonstrate that the parent exists, who can commit it to the investment, and how the Chinese bank will understand the group behind it.

This guide concerns a German corporate shareholder, such as a GmbH, UG or AG. If a German individual will own the Chinese company personally, the shareholder documents and funding arrangements will differ. Settle the ownership structure before ordering certified documents or signing powers of attorney.

Official sources checked: 17 October 2026.

Confirm the parent, business activity and funding plan

Identify the exact German entity that will hold the Chinese shares. A group's trading name, its operating company and its holding company may be different entities. Use the chosen parent's registered name and details consistently across the application, translations, approvals and bank file.

Check the proposed activity against the applicable foreign-investment negative list and sector licensing rules. China's national negative list governs foreign-ownership restrictions; being outside it does not remove ordinary operating licences. Use our WFOE incorporation guide for the general registration sequence.

Agree a realistic contribution schedule with German treasury. For a newly established Chinese limited liability company, Article 47 of the Company Law generally requires subscribed contributions to be paid within five years of incorporation, subject to special rules. Our registered capital guide explains the planning implications.

Which Handelsregister extract should you order?

Start with a current register review. The official German register portal distinguishes the current extract, showing presently valid entries, from chronological and historical records. Filed documents, such as a GmbH shareholder list, serve a different purpose from the company's register extract.

A downloaded PDF can help advisers review the company. Do not assume that every portal printout is ready for an Apostille. German register rules distinguish an ordinary printout from an official printout, with different certification features. Before ordering, ask the Chinese registrar which evidence it accepts and ask the German register court or notary which official document can be Apostilled.

Prepare a short document schedule:

Obtain the receiving office's requirements for document age, originals and certification before paying for the final set. A recent management change is a reason to refresh the review before signing.

Check signing authority before preparing the investment documents

The legal form alone does not tell the China project team whose signature is sufficient.

For a GmbH or UG, review the managing directors and the registered representation arrangements. Section 35 GmbHG provides for joint representation where several managing directors are appointed unless the articles provide otherwise. For an AG, section 78 AktG addresses representation by the management board, including permitted arrangements involving individual board members or a board member together with a Prokurist.

If a Prokurist will sign, have German advisers confirm the registered arrangement and whether the proposed act falls within that person's authority. The statutory scope of Prokura should not be reduced to an assumption that any employee with that title can sign every shareholder document alone.

For example, where two managing directors must act jointly, a power of attorney signed by only one deserves review before notarisation. Internal approval of the investment and external authority to sign are separate questions. Ask German counsel which corporate approval is needed, then align the Chinese articles, shareholder decisions and any delegation with the authorised signatories.

Apostille: route each document to the right German authority

Since 7 November 2023, German public documents within the Apostille Convention's scope can be used in mainland China with the appropriate German Apostille, without Chinese consular legalisation. The Chinese Embassy in Germany's notice also explains that an Apostille does not guarantee acceptance of a document's contents, format or translation.

First confirm which document is required: an official register extract, a notarial certificate concerning the company, or a notarised signature or authorisation. Then identify the competent Apostille authority for that public document. Private resolutions and powers of attorney should be assessed individually against the receiving office's requirements; do not automatically Apostille every page of the project file.

The BfAA's current guidance distinguishes federal documents from documents falling under the Länder. Register-court and notarial documents normally involve the competent Land's judicial authorities, while federal documents follow the relevant federal route. Confirm the particular issuing authority and any prior certification required.

The transfer of relevant federal responsibilities from the Bundesverwaltungsamt to the BfAA took effect on 1 January 2023. That change does not make the BfAA the destination for every German company document.

Arrange Chinese translations after the document set is agreed

China's 2026 registration material specifications require Chinese translations of foreign-language submissions, including relevant notarisation and authentication materials. They prescribe supporting details for translation agencies and individual translators.

Confirm the accepted translation format with the receiving registrar. Keep the parent's legal name, register number, officers' names and the Chinese subsidiary's proposed name consistent throughout. Where an Apostille is required, plan for the completed document and its certification to be translated as requested. A German sworn translation should not be assumed to satisfy the Chinese filing requirements automatically.

Can Hainan simplify the German parent's qualification documents?

Hainan has a conditional route that can remove notarisation and Apostille requirements for an overseas corporate investor's qualification evidence. Under the 2025 provincial measure, eligible investment outside the foreign-investment negative list requires, among other conditions, a recommendation from the Hainan Provincial International Economic Development Bureau or a city or county government, a copy matching the original, an authenticity undertaking and verified identification of the designated representative or agent. Credit-related exclusions also apply.

Ask whether the proposed German parent and investment meet those conditions before commissioning certification. This is a registration-document simplification with defined eligibility. It does not automatically waive the Chinese bank's checks or every other authorisation in the incorporation file.

A group that has already invested in China should also ask about Hainan's 2026 arrangements for reusing qualifying investor documents. Availability depends on the existing records, unchanged information and the applicable reuse conditions.

Prepare the group's ownership evidence for the Chinese bank

The parent's register extract may establish its legal existence without explaining who ultimately owns or controls the group. China's financial-institution customer due-diligence rules effective from 1 January 2026 require banks to understand ownership and control structures and identify and reasonably verify beneficial owners.

Discuss the proposed structure with the bank early. A useful preparation file includes a dated ownership chart, intermediate holding companies, ownership percentages, registration jurisdictions and supporting records for the persons or entities the bank asks to verify. A GmbH shareholder list may explain one layer while leaving further holding companies to be traced.

Keep the incorporation file and bank review coordinated. Confirm whose identity must be verified, how an authorised representative is checked and what the bank requires before the first capital remittance. Our China business bank account guide covers the wider opening process.

Assign German reporting responsibilities before funding

Chinese incorporation does not complete the German parent's obligations. Have German treasury assess direct-investment stock reporting, cross-border payment reporting and any shareholder-loan reporting separately.

Under the current section 64 AWV, direct ownership of at least 10% of a foreign enterprise's capital or voting rights falls within the foreign-asset reporting rules, with an exemption where that enterprise's balance-sheet total does not exceed €6 million. Indirect holdings have additional rules. This is a balance-sheet test, not a €6 million Chinese registered-capital threshold or a threshold for the first transfer.

For execution, nominate one coordinator to reconcile the German corporate documents, Chinese filing requirements and bank questions. Agree the document list, verify signatories, complete the necessary certification and translations, then coordinate registration and banking. Build the timetable around those dependencies before fixing a launch date.

Zhongzhi can help review the proposed shareholder structure, coordinate the China registration file and identify questions for the receiving office and bank. Contact our team with the German parent's legal form, intended Chinese activity, proposed location and ownership chart to start the document review.

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