Foreign Investors Take Note: Are 100,000 CNY in Registered Capital and 25% Equity the Hard Requirements for Setting Up a Company and Obtaining a Work Permit in Yiwu?

Many foreign merchants doing business in Yiwu are caught in the same cycle: entering on an M visa or visa-free, and then flying to Hong Kong or Seoul when it expires, and re-entering. When asked why they don't apply for a work permit, the common response is often two 'hearsay' reasons—heard that a bachelor's degree or higher is required, and heard that two years of relevant work experience is needed.

These two conditions generally apply to employed foreign employees, but for foreign investors who 'set up their own company in Yiwu,' there is another pathway. The Yiwu Municipal People's Government Office issued the Pilot Detailed Rules for Facilitating Work Permits for Foreign Investors in Yiwu (Provisional) (Yizhengbanfa [2025] No. 17) on June 6, 2025, and subsequently released the Notice on Amending the Pilot Detailed Rules for Facilitating Work Permits for Foreign Investors in Yiwu (Provisional) (Yizhengbanfa [2026] No. 27) on September 8, 2026, which will be in effect until December 31, 2027. This document specifies the requirements very clearly: how much registered capital, what percentage of personal equity, how to pay social insurance, how many years can be approved, and what points are considered for extensions.

I. First, Clarify: This Pathway is Only for 'Foreign Investors'

The document applies to 'foreign investors'—foreigners who have completed the registration of a market entity in Yiwu, have a fixed place of production and operation, are operating normally, and are personally involved in the business activities of the enterprise. In other words, you are a shareholder and owner of the company, not an employee hired to work.

Therefore, this is a different pathway from the regular work permit (such as for foreign engineers or teachers). Regular employees follow the provincial standard work permit process, which looks at education and work experience; the investor pathway looks at how much you have invested in the company, your shareholding, and the performance of the enterprise. For the relationship between the two, you can refer to this article: Does Registering a Company Automatically Convert a Visa to a Work Residence Permit?.

II. Three Hard Thresholds, Missing Any One Will Block You

1. The Company Must Be Real and Operating

There must be a fixed place of production and operation, normal operations, and personal involvement in the business. Shell companies or those with only a registered address but no actual operations will not pass this requirement.

2. Registered Capital and Personal Equity (This is the Easiest to Miscalculate)

The document sets two tiers based on industry, noting that both 'registered capital' and 'personal equity percentage' must be met simultaneously:

A common issue is when several people form a partnership, each holding 20% or 15%, which may seem fine for the company, but individually, the 25% threshold is not met. There are also cases where the registered capital is 500,000 CNY, but the actual paid-in capital has not been fully contributed, and the company has no funds, making it difficult to explain 'normal operations' during the review.

3. Social Insurance

You must participate in social insurance and pay social insurance premiums according to regulations. For individuals who do not meet the social insurance participation criteria, commercial insurance can be used as a substitute—this is crucial for those who are over age or have mutual exemption arrangements in their home country, but it is not an option to avoid paying if you simply do not want to.

The three basic conditions are also listed here: being friendly to China, in good health, having no criminal record, and possessing the necessary professional skills or corresponding knowledge level for the job.

III. A, B, C Categories, Determining How Many Years You Can Get

Meeting the basic conditions is just the 'entry point'; the category you fall into determines the duration of the permit. Yiwu categorizes foreign investors into A, B, and C classes based on their business performance:

This table is worth reading twice: an annual sales volume of 2 million CNY can qualify for Class B, which is not a high threshold in Yiwu; an annual foreign exchange settlement of 500,000 USD is also a common scale for foreign merchants exporting small commodities. Many people fall into Class C, not because they are unqualified, but because these figures are not presented in their materials.

IV. Extension is Not Automatic: Up to 5 Years for Class A, Based on Points for Class B, 1 Year for Class C

After the initial approval, whether one can continue to stay depends on the extension criteria. The document stipulates that individuals applying for an extension must first meet the corresponding standards for Classes A, B, and C, and simultaneously satisfy: no criminal record and self-reporting of work status; normal insurance payments; agreement to additional investigations by the decision-making body as needed.

• Class A: Work permit duration can be issued according to the work requirement, up to a maximum of 5 years.
• Class B: Can apply for a 1-year extension; if points reach 60 or above, can extend for 2-4 years; age can be relaxed to 65 years old.
• Class C: Points need to reach 50 (inclusive) or above, with a maximum of 1 year; in principle, should not exceed 60 years old.

The eight aspects of the point system include: honesty and trustworthiness, tax payment, job creation, cumulative years of work, education level, proficiency in Chinese, Class B related indicators, honors and social activities. Specific scores can be found in the attachment 'Extension Point Table' of the document. If it is discovered during the extension process that the individual no longer meets the original category, re-evaluation is required; if none of the three categories are met, the extension will not be granted.

We handle such documents every month. Jinfan (Yiwu) Tax & Finance Management Co., Ltd. has been operating in Yiwu for ten years, handling licenses and residence materials for International Trade City, Huangyuan Market, and Beixiazhu. The most common issues are a few percentage points difference in equity ratios or a two-month gap in social security, only to be discovered when applying for an extension. If you are unsure, you can call 135 6699 1667 for a consultation before preparing your application.

V. Procedure: First Permit, Then Visa, Finally Residence

The document clearly states that the processing procedure follows the Zhejiang Province Guidelines for Foreigners' Work Permits in China (Zhe Wai Zhuan [2019] No. 9). In practical terms, the sequence is roughly as follows:

1. The company prepares the business license, premises, equity, social security, and operational data;
2. Apply for a foreigner's work permit (overseas personnel usually first obtain a work permit notification);
3. With the work permit notification, apply for a Z visa at the Chinese embassy or consulate abroad;
4. After entering the country, go to the public security exit-entry department to apply for a work-related residence permit.

The processing time limits, photos, health examinations, and accommodation registration for steps 3 and 4 are managed by the public security exit-entry administration. The list of required documents should be based on the current requirements of the accepting authority. There have been recent adjustments to the accommodation registration process, which can be reviewed alongside the new changes in 2026 for accommodation registration and residence permits in Yiwu.

The original policy text and its interpretation are handled by the Yiwu Science and Technology Bureau. For inquiries, you may contact the Talent and Cooperation Division at 3/F, No. 299 Chengbei Road, Yiwu, phone: 0579-85670207. For specific procedures, see work visa and residence permit.

Six Common Pitfalls

• Equity Difference of a Few Points: In structures like 30%, 30%, 20%, 20%, where no individual reaches 25%, adjust the equity before applying.
• Interruption in Social Insurance Payments: A two-month gap during a change in companies or entities is easily detected through payment records.
• Zero Declaration for the Company: Having a business license but no operations, with no figures for turnover, imports and exports, or foreign exchange settlement, will result in a C classification, or even denial of extension.
• Working Long-term on an M Visa: A business visa is for negotiating deals and inspecting goods. Working long-term in a factory or shop does not align with the visa's purpose.
• Rushing to Gather Documents for Extension: Points are based on tax payments, employment, and duration, all of which accumulate over previous years and cannot be made up in the month before expiration.

Frequently Asked Questions

Q: Is it necessary to fully pay up the registered capital of 100,000 yuan?

The document states that the "registered capital shall not be less than 100,000 yuan," without specifying full payment; however, the same document requires the company to have "a fixed place of production and operation and normal business activities." Actual paid-in capital and operational cash flow will affect this judgment, subject to the review criteria of the accepting authority.

Q: Can Chinese partners hold shares on behalf of foreigners to meet the 25% requirement?

The document specifies "individual shareholding ratio of foreign investors." Nominal holding is not reflected in industrial and commercial registration, leaving the risk to the individual. This approach is not recommended.

Q: Is the C category not very useful?

It is useful. The C category allows legal work and residence, though for a shorter period (up to one year) and generally for those under 60 years old. It is suitable for newly established companies that have yet to build up their data. Once the company grows, it can be reclassified according to B category standards.

Q: What happens after December 31, 2027, when these detailed rules expire?

The document is valid until December 31, 2027. Typically, revisions or extensions are made before expiration. Confirm the currently effective version before proceeding.

Policies are fine-tuned annually. Whether your company qualifies depends on whether your business license, equity, social insurance, and transaction records meet the criteria. If unsure, you can call us at 135 6699 1667 for clarification, and then proceed on your own if you wish.

Source and Basis