What is China’s B21 (EDI) License and Who Needs One?

Operating an e-commerce platform that connects third-party sellers and buyers in China requires a B21 License, also known as the EDI (Electronic Data Interchange) License or 增值电信业务经营许可证-在线数据处理与交易处理业务 in Chinese. This guide outlines the key aspects of the B21 License including the legal foundation, who needs it, how to get it, and how to ensure your business remains compliant with local laws and regulations. 

What is the B21 (EDI) License?

The B21 License, formally known as the “Online Data Processing and Transaction Processing Business License” (在线数据处理与交易处理业务许可证) is a commercial operating license required for businesses that operate platforms providing online data processing and transaction processing services in Mainland China. The B21 License is specifically designed for platforms that facilitate transactions or data exchanges between multiple parties.

The B21 designation refers to the specific category within the Ministry of Industry and Information Technlogy’s (MIIT) telecommunications business classification system, where “B21” represents “Online Data Processing and Transaction Processing Business” (在线数据处理与交易处理业务).

This license serves as the government’s primary mechanism for regulating multi-party transaction platforms, ensuring that businesses facilitating e-commerce, data exchange, or networked equipment processing in China’s digital market comply with local laws.

What is the Legal Foundation of the B21 License?

The B21 License requirement is not optional, as part of the Value-Added Telecommunications Services (VATS) or 增值电信业务, the Telecommunications Regulations of the People’s Republic of China (中华人民共和国电信条例) applies to the B21 License.

Article 7 of the Telecommunications Regulations establishes that all telecommunications businesses require a license:

“The State shall implement a licensing system for telecommunications businesses in accordance with the classification of telecommunications businesses. Telecom operators shall apply to the information technology administration department of the State Council or the telecommunications administration authorities of the province, autonomous region or centrally-administered municipality for a telecommunications business permit pursuant to the provisions of these Regulations. No organisation or individual shall engage in telecommunications business without obtaining a telecommunications business permit.”

Article 8 clearly states that there are two types of telecommunications businesses: basic telecommunications and value-added telecommunications.

“Telecommunications businesses are categorised into basic telecommunications businesses and value-added telecommunications businesses. Basic telecommunications businesses shall mean the businesses of providing public network infrastructure, public data transmission and basic voice communication services. Value-added telecommunications businesses shall mean making use of public network infrastructure to provide telecommunications and information services.”

Who Needs a B21 (EDI) License?

The B21 License is required when any online data processing or transaction processing services involve third parties. According to MIIT’s Classification Catalogue of Telecommunication Services (2015), online data processing and transaction processing services are defined as services that facilitate transactions, data exchanges, or processing between multiple parties through internet platforms.

These services are further defined by MIIT as services that “include transaction processing services, electronic data interchange services, and network/electronic equipment data processing services.“

This therefore means that you will need a B21 License if your business revolves around any of the following: 

1. Transaction Processing Services – Facilitating commercial transactions between buyers and sellers. This includes services such as e-commerce marketplaces, online food ordering platforms, second-hand trading platforms, ticket booking services, and service marketplace platforms.

2. Electronic Data Interchange Services – Enabling business-to-business data exchanges. This includes services such as B2B data exchange platforms, supply chain management platforms, and commercial information exchange systems.

3. Network/Electronic Equipment Data Processing Services – Managing data processing for networked devices. This includes services such as machine-to-machine (M2M) communication platforms, IoT device management platforms, and industrial equipment data processing systems.

It is important to note, these three categories provide a clear guideline as to what kind of platforms fall under the B21 License. However, any platform that facilitates third-party transactions, data exchanges, or networked equipment processing will trigger the B21 License requirement.

What’s the Difference Between the ICP License and the B21 License?

The B21 License and ICP License are often confused as they both relate to commercial activities. The ICP License (also known as the B25 license) is required for commercial websites that generate revenue through advertising, subscriptions, or direct sales. It applies to businesses selling their own products or services directly to consumers. It does not cover third-party transaction facilitation.

The B21 License is required specifically for platforms that facilitate transactions between third-party sellers and buyers. This covers marketplaces, data exchange platforms, and M2M communication services. Requirements are more stringent due to the complexity of multi-party data processing.

In practice, an e-commerce company selling its own branded products needs only an ICP License. If that company opens its platform to third-party sellers and becomes a marketplace, it must obtain both an ICP License and a B21 License

What are the Basic Requirements to Apply for the B21 License?

Obtaining a B21 License requires meeting specific ownership, operational, and infrastructure requirements set by MIIT.

Ownership Structure

Foreign ownership limits depend on your business type:

• E-commerce platforms can have 100% foreign ownership as of April 8, 2024 in pilot regions like Beijing, Shanghai, Hainan, and Shenzhen. It is important to note, while legally permissible, obtaining a VATS license as a WFOE in pilot regions remains exceptionally difficult in practice. Approval thresholds are extremely high, with authorities primarily approving well-known multinational enterprises. As of 2025, only 13 companies total have successfully obtained VATS licenses as WFOEs across all categories since the pilot program began. 
• Other B21 services including B2B data exchanges are restricted to 50% foreign capital.
• Domestic companies face no ownership restrictions.

Company Requirements

• Your company must be legally established under Chinese law with “Value-Added Telecommunications Business” (增值电信服务) explicitly listed in your business scope. 
• You need minimum registered capital of RMB 1 million for provincial operations or RMB 10 million for cross-provincial operations. 
• The company and its key personnel must have clean records with no telecommunications violations in the past three years.

Technical Infrastructure

• Physical servers must be located in China
• Your website needs a completed ICP filing
• Technical plans must demonstrate platform security and functionality.
•  A cybersecurity department with supporting internal regulations is mandatory. 
• Companies must ensure compliance with data localization and cross-border data transfer regulations, along with user information encryption measures.

Personnel Requirements

• You need at least 3 Chinese employees with social security (社保) records covering 1-3 months from your company.
• Newly established entities typically require approximately 10 employees including technical staff with relevant qualifications. Some regions mandate at least one IT-related professional.

Foreign Enterprise Requirements

Foreign-invested enterprises face additional requirements: 

• Your legal representative must be a Chinese national. 
• You must demonstrate e-commerce operational experience through platform examples, screenshots, contracts, and transaction model descriptions.

It is worth noting, platforms involving payment services need cooperation agreements with banks or payment institutions. Industry-specific licenses may also apply to businesses that sell medical products or devices.

How to Apply for the B21 (EDI) License

The B21 License application process is administered through regional telecommunications authorities under MIIT oversight. The process is complex and typically takes 40-60 business days from initial submission to final approval. Depending on the scale of your operations, the authority managing your application will differ:

Provincial Operations: Approved by the Provincial Communications Administration Bureau (省通信管理局) where the company is registered.

Cross-Provincial Operations: Must apply to the Ministry of Industry and Information Technology (国家工业和信息化部).

Major filing authorities include:

• Shanghai Communications Administration (上海市通信管理局) for Shanghai
• Beijing Communications Administration (北京市通信管理局) for Beijing
• Guangdong Communications Administration (广东省通信管理局) for Guangdong
• Shenzhen Communications Administration (深圳市通信管理局) for Shenzhen

Step 1: Material Preparation

Confirm enterprise qualifications meet requirements and prepare all application materials organized by category: main qualifications, personnel materials, business materials, security plans.

Step 2: Online Submission

Access the Telecommunications Business Market Comprehensive Management Information System (电信业务市场综合管理信息系统). Complete and submit application forms, uploading all materials in PDF format.

Step 3: Material Review 

The Communications Administration conducts initial formal review followed by substantive review. Some regions may request supplementary materials. Total typical review period is 60-90 business days.

Step 4: On-Site Inspection

Authorities may conduct inspection of company office premises, verification of technical personnel, review of website operations, and physical inspection of server infrastructure.

Step 5: Approval Decision

Upon approval, the B21 License is issued with results notified via SMS and email. Rejections include specific reasons for non-compliance that must be addressed before resubmission.

Stage 6: Certificate Collection

Choose on-site pickup or mail delivery. The certificate is valid for 5 years and requires renewal before expiration. Finally, to remain compliant with local laws and regulations, companies are required to display the B21 License number provided on the certificate in the footer of their website.

The entire process generally takes 40-60 business days (approximately 3 months or less) from submission to approval. Complex applications or additional documentation requests may extend this timeline.

What Documents are Required for Application?

Company Documents – Business license (营业执照) with telecommunications scope(增值电信服务), company articles, legal representative ID (法人代表身份证) with photo, and shareholder identification.

Personnel Documents – Social security certificates for at least three employees and technical staff educational certificates where required.

Business Materials – License application form, business development plan, technical solution, data security assurance plan, and payment institution agreements if applicable.

Website Documents – Domain certificates valid for at least 6 months, server hosting agreements, and ISP certifications.

Compliance Documents – Cybersecurity department establishment records and data protection regulations.

All copies must be stamped with your company seal. Foreign language documents require certified Chinese translations. Requirements will vary by province. Due to the complexity of this process, it is recommended you work with a partner that is familiar with this process, such as AppInChina. This will not only reduce application delays, but will also increase the likelihood of the applicatio being successful. 

What Are the Consequences of Operating Without a B21 License?

Operating telecommunications or internet-based services in China without a valid B21 License directly violates Chapter 6 of the Telecommunications Regulations of the People’s Republic of China (中华人民共和国电信条例) and carries significant legal and operational risks:

• Criminal liability for serious offenses such as data misuse, illegal network operations, or market disruption.
• Administrative penalties including warnings, rectification orders, and confiscation of illegal gains.
• Fines ranging from CNY 5,000 to CNY 1 million, or calculated as multiples of illegal income.
• Business restrictions including suspension of operations or revocation of telecom permits in severe cases.
• User-focused remedies such as mandatory apologies and compensation for losses.
• Specialised oversight by product quality authorities for telecom equipment quality violations.

How Can AppInChina Help?

China’s B21 License requirements can be complex and time-consuming. At AppInChina, we provide comprehensive B21 License services to help international businesses succeed in China. We can help by:

• Preparing application documents and guiding you through the submission process.
• Translating any documents that aren’t already in Chinese.
• Liaising with provincial authorities throughout the approval process. 
• Managing annual audits and ensuring ongoing compliance.

Contact us to get started with deploying your commercial solution in China.