How to Set Up eCommerce In China
Like most of its online activity, China regulates its eCommerce environment more strictly than in the rest of the world. Most of these efforts are to help prevent fraud and money-laundering. Just keep in mind that you cannot simply set up a website and start to sell goods.
Licensing for eCommerce in China
If you want to do eCommerce in the Chinese marketplace, there are two Internet Content Provider (ICP) licenses you need to acquire first:
ICP Beian (ICP备案) – This is the standard ICP license required to host a website in China. It is issued by the Chinese Ministry of Industry and Information Technology and administered at at the provincial level. For sites that are purely informational and not involved in selling goods or services, this is the only ICP required. The numbers follow the format 京ICP备12345678号
ICP Commercial – This ICP license gives its holder the legal ability to accept payments online, but it generally applies to online stores that sell services or physical goods. These numbers follow the format 京ICP证12345678号 .
Under the spirit of the law, this would include both websites with online shopping carts and also people who are selling through stores in online marketplaces, such as Taobao, JD.com, or Alibaba. In practice, most online marketplaces have not required its users to prove they have a commercial ICP to open and operate a store.
However, recently this year, JD.com – one of China’ biggest online marketplaces, often referred to as “The Amazon.com of the East” – announced that they would begin requiring their merchants to submit their commercial ICP licenses. This would apply to accounts owned by both foreign and domestic accounts. It is unclear how and when they begin to enforce this rule, but it demonstrates that companies are becoming more serious about enforcing stricter compliance with the law.
Websites that do not have an ICP record cannot be accessed in Mainland China. You can see the ICP license numbers for any Chinese website at the bottom of the front webpage, where they are required to be displayed:
I need an ICP license for China. How can I get one?
Your website does not need to go live prior to applying for the license, but you will need to first obtain a local hosting provider, to whom you will submit the required documentation (these can vary from province to province):
- Certificate of the person making the application (generally the individual’s Chinese ID card)
- Certificate of the website administrator
- Certificate of the organization (business license or other such document to verify the business, if applying on behalf of an organization)
- Photo of yourself holding the required documents
- Letter of authorization
- Residence Permit
- Domain name holder certificate
- Domain name confirmation (Beijing)
- Commitment letter and website construction plan (Guangdong)
- Certificate of Authorization (Yunnan, Inner Mongolia, Heilongjiang, Jiangxi)
If the documents are approved, they are then forwarded to the Ministry of Industry and Information Technology for further review. Applicants who are rejected for any reason will be contacted and asked to submit additional information. Assuming all documentation is in order, it takes an average of 20 business days for a company to finally receive its ICP license.
The ICP system follows a “one account, one owner” rule. This means that if you own multiple websites, you can file for all of them from a single account, as long as you are the listed owner listed for all the domain names you will register. For sites with different owners, you’ll need one account per owner.
All steps can be completed online, but you will need the assistance of a Chinese speaker, as no English forms are available.
Who can get an ICP license?
- Chinese-owned businesses with a Chinese business license.
- Partially or wholly foreign-owned (WOFE) businesses with any type of Chinese business license. For Sino-foreign joint ventures, the proportion of foreign investment cannot exceed 50%, and you will only be able to receive an ICP Beian – not a commercial ICP. Also, foreign companies need to apply for a “Foreign (Regional) Enterprises Resident Representative Registration Certificate” (外国（地区）企业常驻机构代表登记证) before filing.
- Chinese nationals can receive an Individual ICP (个人备案) using their state-issued ID.
- Non-Chinese individuals who are physically present in China long enough to fulfill some basic registration requirements can apply for an Individual ICP with their passport.
It is important to understand that foreign companies are not eligible to receive either ICP license. It is not enough to have an office in China: You must be a registered Chinese business.
So how can a foreign company do eCommerce in China? Foreign entities usually partner with Chinese internet companies to use the licenses of the Chinese company.
This is where AppInChina can help. As a Wholly Foreign Owned Entity (WFOE), we are a Chinese company that can apply for these licenses on behalf of our clients. This is part of our range of services that ensures you can operate worry-free in China, knowing that you are in full legal compliance with all Chinese laws.
Your company will simply sign a partnership agreement with us and we will help run your eCommerce platform for you. When you sign up for AppInChina’s services, you always retain the right to your own content and complete control of your own operations, while at the same time taking advantage of our company status and many years of expertise in the Chinese market.
How Can I Host My Online Store in China?
In addition to the ICP licenses, AppInChina will also assist you with:
Creating a Chinese domain name. This will be required to apply for the various licenses, and must undergo real name verification of the owner. Chinese domain names end in .cn. You can choose a name that is similar to your own current domain, such as mystore.com.cn, or mystore.cn.
Hosting your site in China. All hosts will require your ICP license numbers before releasing server credentials to you. Chinese law states that data acquired in China must stay within its borders. This would naturally include email addresses, physical addresses, passwords, preferences, and other personal data that are necessary to operate an eCommerce site. So your site and databases must be hosted on servers that physically reside in China. Moving the data across borders for any reason requires your company to apply for specific permission to do so.
Additionally, because outside traffic must pass through The Great Firewall before making it to a device in China, locally-hosted sites almost always load more quickly and operate more efficiently, providing for a much better experience for your users.
The AppInChina Advantage
AppInChina has a full China-side hosting solution to make it easy and affordable for your company to remain legally compliant and provide the best experience possible for your customers. Send us a message or sign up for a free account on our client dashboard to get more information.