China sees surge in one-person companies in AI era

The term “one-person company” (OPC) has surged into China’s business lexicon this year, defining a new AI-era entrepreneurial model. Empowered by artificial intelligence, solo entrepreneurs can now build virtual teams capable of shepherding projects from conception to completion – fuelling rapid growth across China’s innovation landscape.

To better understand this business model, it helps to break down its core features from multiple dimensions.

First, in terms of company setup, registering an OPC is no different from registering a regular company. The entire process can be completed online with zero registration fees.

Like any other legally registered company, an OPC enjoys rights protected by law and must also fulfil statutory obligations such as paying taxes. Its business license must clearly indicate its type of operating entity, such as “limited liability company (solely invested by a natural person)” or “limited liability company (solely invested by a legal person).”

Second, when it comes to organised structure, an OPC does not necessarily mean only one staff member.

Here, “one-person” means the company shall have only one shareholder, either a natural person or a legal entity. Its directors, supervisors and senior management personnel may be other individuals separate from the sole shareholder, and the company may also hire regular staff.

If additional shareholders or senior management personnel as stipulated by Company Law are introduced, relevant registration and filing procedures shall be completed in accordance with the law.

Third, as for market exit rules, when an OPC ceases business operations and withdraws from the market, it also needs to go through three major procedures: resolution for dissolution, liquidation and asset distribution, and cancellation registration.

One important point should be noted: if the sole shareholder cannot prove that the company’s assets are independent from personal assets, that shareholder may bear joint liability for the company’s debts.

Some people ask: how is an OPC different from a sole proprietorship or self-employed household?

The key distinction lies in legal status.

An OPC, established under the Company Law, is a corporate legal entity and assumes limited liability. By contrast, self-employed households, or “getihu” in Chinese, is treated as a natural person under civil law. It does not have legal person status, cannot establish branch offices, and its operator must bear liability with all personal or family assets.

 

This feature of limited liability allows OPCs to reduce investor risk, improve the efficiency of capital concentration and allocation, and in turn promote business innovation and economic growth.

Why, then, are OPCs becoming so popular in the AI era? The answer lies in how technologies are empowering development.

AI has made this new entrepreneurial model even more attractive by enabling lighter organisational structures, more flexible management, faster responses, lower costs, and greater operational flexibility.

With effective use of AI tools, far fewer people are needed to complete tasks ranging from product design and technological development to marketing and customer service.

Science and technology are the primary productive force and a core source of competitiveness. To foster a more supportive environment for entrepreneurship, many regions across China have introduced targeted policies.

For instance, Shanghai’s Pudong New Area offers newly registered OPCs free computing power worth up to 300,000 yuan ($43,876). Shenzhen in south China’s Guangdong province has launched an action plan to build itself into a leading hub for AI-driven OPC entrepreneurship. Chengdu in southwest China’s Sichuan province is stepping up innovation in talent recruitment and training, accelerating the launch of new products and application scenarios, and refining full-chain support for innovation and startups.

By beefing up institutional and policy support, improving the innovation ecosystem, and building a world-class business environment that is market-oriented, law-based, and internationalized, local governments aim to turn more good ideas into reality and foster new industries and business models.

By the end of 2025, nearly 7.32 million OPCs were newly registered in China, up 42.3 percent year on year. This rapid growth was closely tied to revisions to the Company Law that removed the previous restriction allowing one natural person to invest in only one one-person limited liability company.

With more inclusive and prudent regulation, greater room for development, and stronger support for innovation, more entrepreneurial seeds are taking root and growing strong. Together, they are helping China’s economy flourish like a vast forest — dense, vibrant, and full of vitality.

People’s Daily Online