How to Obtain a Business License in China

Posted by Dan Taylor

A business license is generally necessary for conducting long-term business operations in China.

Certain online businesses may operate through cross-border e-commerce platforms without a domestic license but might need an ICP commercial license for their website.

What is a Five-in-One Business License?

The five-in-one business license combines tax registration, business license, social security permit, organization code, and statistical registration certificate, simplifying the registration process.

Business License Requirements

  1. Unified Social Credit Number: An 18-digit code certifying legal business status, essential for transactions with government offices and financial institutions.
  2. Business Registration Number: Issued after registration, subject to change with the business license.
  3. Official Company Name: Must include the industry and transaction type, avoiding misleading or inappropriate terms.
  4. Business Type: Typically described as LLC for foreign companies.
  5. Legal Representative: The official spokesperson accountable for legal matters.
  6. Business Scope: Detailed description of planned activities; deviations can lead to penalties.
  7. Registered Capital: Indicates investor commitment; no legal minimum, but higher amounts reflect financial strength.
  8. Establishment Date and Operating Period: Declare the foundation date and operating period.
  9. Registered Business Address: Each company needs a unique address; virtual offices are an option for cost savings.

Registration Process

Applications are submitted online via the State Administration for Industry and Commerce. Requirements include opening a bank account, providing a list of directors, and presenting company chops and a detailed business plan for wholly foreign-owned enterprises.

Costs and Options for Foreigners

Registration costs range from 30,000 to 100,000 RMB. Foreigners can choose between wholly foreign-owned enterprises (WFOE), joint ventures (JV), or representative offices (RO), each with specific requirements and benefits.

Benefits and Challenges

A business license grants full control over marketing strategies and is necessary for an ICP license to launch a localized website. Challenges include language barriers, regulatory complexity, and non-centralized procedures.