Incorporation in China: Licensing
- Максим Миненко
- 5 мая
- 3 мин. чтения
Обновлено: 9 мая
Incorporation in China requires companies to follow many rules and regulations, with one of the most important being the need to obtain various licenses for legal operations. These licenses not only confirm the legality of the business but also allow companies to operate in specific fields. In this article, we will review the main types of licenses that companies must obtain to operate in China, as well as the key requirements and procedures for obtaining them.
Business Registration Certificate (Business License)
This certificate confirms the existence of the company and is issued by the Administration for Industry and Commerce. Companies must obtain a business license in order to legally operate in China. Failure to comply with this requirement can result in serious fines or even a ban on conducting business.
The business license includes the following information:
Taxpayer identification number / registration number
Company name
Type of legal entity
Legal representative
Registered capital
Legal address
Business scope
Date of establishment
License issuance date
License expiration date
Registration authority
Registration number
Import and Export License
Previously, companies had to obtain an import and export license from the local customs authority to carry out import and/or export operations. This license allowed companies to handle customs clearance, pay customs duties, and pass product inspections.
After the pandemic began, China abolished this license. Today, to engage in foreign trade, it is enough to:
Indicate import-export activity in the business license of the company
Register for foreign trade activities with the Ministry of Commerce
Obtain approval from the State Administration of Foreign Exchange
Register with the General Administration of Customs of the PRC (GAC PRC) as a foreign trade participant
Obtain a key for the unified customs portal
Sign an electronic agreement between the GAC PRC, the bank, and the company (a tripartite agreement) to enable payment of customs duties (this is required for imports to China, but not for exports)
Environmental Impact Assessment
This applies only to manufacturing companies. Legislation requires them to conduct an assessment of their environmental impact.
Environmental authorities require the following information:
Consumption and disposal of hazardous materials
Economic analysis of the profits and losses from the environmental impact of projects
Environmental protection measures
Raw materials used
Equipment and machinery used
The environmental impact of manufacturing projects can be classified into three categories:
Minor impact
Moderate impact
Significant impact
License for Food and Beverage Activities, License for Pharmaceutical Activities
Companies engaged in food and beverage activities (including the sale of pre-packaged food, bulk products, the production and sale of hot and cold food, bakery products) and pharmaceutical activities (such as retail and wholesale trade in medicines, and the production of medicines) must obtain a separate license for each type of activity. Different types of activities and products require different licenses, with varying complexity and entry requirements. These licenses are issued by the Administration for Food and Drug Administration.
License for Value-Added Telecommunication Services (VATS)
Companies wishing to provide value-added telecommunication services, such as:
Online games
E-commerce
Web hosting
Advertising
News
Entertainment
Video services
must obtain a separate license. This license is issued by the Ministry of Industry and Information Technology.
Some areas of telecommunication services are not available for foreign investments (e.g., online payment services).
Accounting License
Companies providing accounting services must obtain an accounting services license.
License for Educational Activities
Educational institutions or companies offering non-compulsory education programs, such as professional training, language courses, or academic education, must obtain an educational activity license. This license is issued by the Municipal Education Commission.
License for HR Services
Companies engaged in employment services, such as job placement, providing job vacancy information, and searching for highly qualified staff, must obtain a separate license from the Ministry of Labor and Social Security.
Obtaining all the necessary licenses is an essential requirement for the legal operation of companies in China. From the business license to specialized permits in different industries, each license plays a role in ensuring compliance with legal requirements. Understanding the process of obtaining these licenses and properly managing them helps avoid legal risks and ensures the successful operation of businesses in China.
