Overview

Publishing internet content in mainland China, such as a website or app, is subject to national government rules and regulations enforced locally by the city/region.

These rules and regulations require your business to have access to an Internet content publishing (ICP) license before publishing on the Chinese Internet. Different levels of ICP licenses enable you to publish various types of content and engage in online trading.

However, there are ways to publish online in China without needing your business to have an ICP. These are Chinese platforms and services, such as Chinese email, social media, and search engines, where service providers must ensure their customers comply with Chinese publishing rules and regulations.

Under certain conditions, Access to China can assist international businesses in establishing their online presence in China by serving as an agent for their Chinese publications. There are many ways to publish your online content in China. We recommend considering all options before making a decision.

Options are in three groups

• International and Chinese e-Commerce platforms
• International and Chinese System as a Service (SaaS)
• Your internet presence.

Note: “International” in the context of this paper means “any platform or service running outside mainland China” and includes Hong Kong and Macau.

No ICP is needed for internet content published outside China, including Hong Kong and Macau. However, access to your internet content outside China may be blocked (e.g., YouTube, Facebook, etc.) or slowed down, making it unusable (e.g., Google).

Management summary

International and Chinese e-Commerce and IT platforms

In mainland China, e-commerce and IT platforms are very popular. The service providers have obtained approval from the Chinese government to publish on the Chinese Internet. Therefore, you do not need an Internet Content Provider (ICP) license to use the providers' services.

The Chinese platform suppliers ensure that customers comply with Chinese publication and trading rules and regulations.

If you are selling from within mainland China, you will need a Chinese business to process payments, tax returns, and other related matters. Most SDPs offer an international service that allows you to sell to mainland China without needing a local Chinese company.

Start with brand and compliance

Before trading, review your branding in China. If your business branding is not registered in China, correct this ASAP. Another company can undermine your marketing efforts by registering your brand(s) and reproducing products/services locally.

If you are selling goods inside China, products may require local certification (e.g., CCC). Importers usually manage certification, but it can be appropriate for your business to be involved so you own the final documentation.

Your local market: Chinese visitors and internet sales

Many Chinese citizens study and work abroad. Visitors can see products first-hand and share information on Chinese social media, which can increase interest.

Chinese buyers often prefer overseas suppliers for perceived quality and authentic branding. Develop relationships with Chinese social media users with large followings and provide links to online content.

Your local market: direct Chinese sales

Chinese visitors can be supported by:

• Local internet presence plus accessibility in China (with a short Chinese introduction)
• Meetings at trade shows
• Local trade organisations

This approach builds connections in China from within your local country and is often supported by trade organisations.

Direct selling to the Chinese market

Proactive marketing and sales strategies can begin without visiting China. The internet lets you do early-stage work from your office.

• Chinese B2B marketing (e.g., Alibaba)
• Chinese B2C distribution channels (e‑Malls)
• Chinese social media (e.g., WeChat)
• New overseas channels (e.g., b2b66 project)

Appoint a local Chinese agent

A Chinese agent can become your local representative in Chinese markets. Success is networking-based—learn as much as you can about their network.

• Do not appoint an agent for all of China or an entire region
• Use performance-based targets and a clear termination clause
• Ensure B2C selling via e‑Malls can continue where appropriate
• Allow Chinese customers to approach your business directly
• Register trademarks in your company name before deep engagement

Distributor, office, licensing, JV, and WFOE

• Distributor: handles importing, storage, shipping, returns, servicing, and payments—aim for payment before arrival.
• Representative office: local contact and language support without full entity setup.
• Licensing: can be cost-effective; ensure your company name is on certifications and documents.
• Joint Venture (JV): less common now, but may help access funding or special agreements.
• WFOE: easier than before, but costly—consider after trying other options.

Creating a Chinese company

Before establishing a company in mainland China, make sure you fully understand why you need to do so. In many cases, you can trade into China from outside mainland China (e.g., via Hong Kong, the UK, or the USA) without creating a local entity.

Why you might need a Chinese company

• Production costs are cheaper in China
• Chinese government grants available
• Local Chinese investment available
• Local Chinese overseas branded services – e.g., coffee shop chain
• You wish to sell directly to businesses/consumers from within China
• Chinese government licensing is only available if you have a Chinese company, e.g., ICP certification

When you may not need a Chinese company

You do not need a Chinese business if you are selling into China from a company or e-commerce site located outside mainland China, such as Hong Kong, the USA, or the UK.

Planning and setup points

• Find a local agent in your country who can advise and help set up your Chinese business or local trading organisation and who can advise your business on the right approach to trading in China.
• Be very clear about what trading rights you want in China. There are some restrictions on overseas business trading in China.
• In creating the company, you must declare what areas of business you are trading in. You must trade in China within your declared trading area or have it changed/updated as your Chinese business develops.
• Make sure that your brands can be registered in China. Your brand/trading name may already be registered to another company.
• Check the import requirements of any products you plan to sell in China. Test the import requirements by sending product samples to Chinese customers.
• Find and appoint a Chinese General Manager. The General Manager is legally responsible for the Chinese business, including all funds in China. The General Manager is legally accountable if the company breaks Chinese rules and regulations. It is not easy for a Chinese person, as many overseas trading methods must be adapted to the Chinese market.
• If you are creating a factory in China, understand the local trading rules. Some factories are built solely for exporting. You cannot sell your goods in the Chinese market unless you first export them from China and then reimport them.
• Land is only leased 50 years for a business and 75 years for a private apartment or house. Chinese government companies own the land. When a Chinese government company moves from public ownership to private ownership, the 50 year lease rule applies.

Capital, banking, and ongoing costs

• A Chinese business must be established with declared capital. You can create a Chinese company with one US dollar in capital.
• Capital can be paid into a company over five years.
• Businesses are mainly measured in China based on their registered capital and the number of staff employed.
• A local Chinese bank account will be required to deposit the money needed to run the business. This can be an international bank name, e.g., HSBC. All international banks operating in China will comply with Chinese banking rules and regulations, so a local HSBC is a regional Chinese bank for day-to-day trading in China. You cannot control your Chinese bank account from your local country bank branch.
• Please note: Online Chinese banking can help manage overseas Chinese banks.
• Capital can be transferred into China in stage payments over two years. If the capital is not invested in the Chinese company according to the agreed payment schedule, which was filed with the Chinese bank at the outset, the Chinese authorities may close your Chinese company on the advice of the Chinese bank.
• Different tax rates apply to different types of business.
• The minimum annual running costs for a shell company in China are about $3,000, including local monthly and yearly filing of papers and tax returns.

Additional notes

• The business rules and regulations in China are constantly changing, so you must always seek local legal advice. Access to China has set up several businesses in China. We outlined several key points from our expectations to facilitate the planning process for establishing a Chinese company.

Why payment gateways matter

A gateway that processes local payment methods, including local credit cards, is essential for successful Internet trading.

All countries have rules and regulations on which payment methods can be used and when. To that end, China has its own rules and regulations and will not allow a Chinese business to process payments on non Chinese approve systems. This applies to all Internet transactions processed on servers/clouds/or in data centres in China. All payments made in China must be to a Chinese bank account.

An overseas business needs access to certain features of these payment gateways to trade successfully with Chinese consumers and businesses. “If you cannot take a payment, you cannot process an order.”

China has very successful payment processing systems and a gateway for day-to-day trading.

Historically, China has used cash and bank money transfers. Money transfers between accounts and banks have always been fast: a few minutes between accounts and only a few hours between banks.

Today, just like in the rest of eastern Asia, mobile touch payment systems are replacing cash. In China, an increasing number of stores are no longer taking cash.

An overseas business typically needs local-friendly payment options to convert interest into orders. If customers cannot pay, you cannot process an order.

Chinese credit cards and UnionPay

Union Pay was the business credit card processing system for historical Chinese citizens. Today, some Chinese credit cards support Visa and Mastercard processing, but UnionPay remains the dominant provider of credit card processing in China.

We recommend contacting your business credit card processing company to ensure you can accept UnionPay credit card payments.

When processing a Chinese credit card, the funds are debited from the Chinese bank account in your local currency. The purchaser has already exchanged the funds into your local currencies at the Chinese bank.

When using a Chinese credit card overseas, it works like a debit card because funds are taken from the Chinese account to complete the transaction. Generally, within a few seconds, confirm on their Chinese mobile.

Please note: Currently, most Chinese cards require “swiping” because “chip and pin” / “contactless” processing is not compatible with other countries.

Online payment processing in China

The rollout of payment systems in China is happening very fast, and many people and businesses prefer these systems because they eliminate the need for cash.

Local charge cards and the shift to apps

A local charge card requires you to put small amounts of money on it at the outset.

Then, stores, etc., take touch card payments. Different operators operate in other cities/areas in China.

These systems are often used in food halls, where you purchase a prepaid card before buying food and pay with it. This allows food halls to process many orders quickly, and staff serving food do not handle dirty money.

These systems have been widely used in China for the past ten years because they eliminate the need to carry cash, visit banks, or make other transactions.

Today, these cards have been replaced by smartphone apps. The processing is the same as with the Change Cards; the card is no longer needed.

Alipay and WePay

There are two main online Chinese payment gateways;

These are the leading online payment processing gateways used in China.

Alipay, owned by Alibaba, was the first significant online payment processing system.

WePay, owned by Tencent, is a new system gaining popularity in China due to its full integration with WeChat.

Both gateway systems support online payments, touch payment apps (replacing local charge cards), and, increasingly, bank services.

These systems are significantly cheaper, being 50% to 75% more affordable than the payment systems we use in Europe.

You can open an Alipay or WePay account as an overseas citizen or business.

Your trading rights with these payment gateways in China change monthly.

We recommend contacting the payment gateways directly and determining their terms and conditions.

Ask the specific questions:

Will your payment gateway support payments from Chinese citizens or businesses in RMB, ensuring funds are available in an overseas bank account?

What are the costs of achieving this? (Setup, running costs, transaction fees, etc.)

• Alipay (Alibaba)
• WePay / WeChat Pay (Tencent)

Compliance reality check

If your internet presence is being processed in mainland China, regardless of what the payment gateways say, you must have a Chinese bank account and business.

The workaround is to have your Chinese online store operate outside China. Maintain a local marketing presence in China and direct customers to overseas Chinese stores. TMall Global operates this way for overseas businesses (based in Hong Kong).

The Chinese government limit the amount of money Chinese citizens can spend overseas each year ($50,000)

Many Chinese citizens often have overseas bank accounts, which is legal, so they have access to overseas payment gateways and credit cards. Therefore, your existing payment system will support some Chinese businesses in your local market.

Recommendations

Make sure your credit card processing payment system can process Union Pay.

Monitor the international progress of Alipay and WePay. Once they can process Chinese citizens paying in Chinese RMB directly into your bank account outside China, it would be an excellent time to install them as a payment option for the Chinese market.