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Establish an Online Shop in China

Establish an Online Shop in China

According to statistics and numbers, China is one of the biggest e-commerce markets in the world, as a massive boom has been registered in recent years. Big online retailers have profits of billions of dollars on a yearly basis, so the attraction of having an online shop is pretty clear for international investors in China. If you would like to open an online business in China, we recommend you talk to one of our company formation agents in China and find out how they can help.

How do I set up an online company in China?

First of all, one must choose a name and verify its validity with the local authorities. Second, the business structure needs to be selected, and in most cases, the Wholly Foreign-Owned Enterprise can be the ideal solution because it addresses international investors. Below are a few important steps to consider for opening a WFOE in China:

  • CNY 30,000 is the minimum share capital for a WFOE in China – a local bank account is needed;
  • the activities, the owners, the general rules must be comprised of the Articles of Association of the company;
  • just like any other business, the online shop must be registered for tax purposes;
  • special licenses and permits might be needed for retail activities.

The online business in China must have a merchant account to allow future customers to make payments online, no matter the currency involved. One of our company formation specialists in China can give proper support to those interested in starting a company in China, including an online shop. The process of company registration in China is not that complex, but it is best to hire the services of specialists to handle the formalities implicated. We can help you set up an online company in China.

What licenses do I need for an online shop in China?

An online business in China needs an Internet Content Provider License or ICP and a transportation license for the goods sold on the internet. Because the number of online shops grows at a fast pace, the needed approvals might take a while, however, the Ministry of Commerce has the final decisions for online businesses. If you would like to skip this time-consuming process, we recommend you talk to one of our consultants.

Registering the trademark for your online shop in China

It is important to register the trademark before the online shop starts its activities. This is another significant step in business formation in China, so you might want to pay attention to the requirements involved. For example, a trademark must be unique and must be formed of letters, numbers, or signs as long as they are not offensive.

Verification of your trademark needs to be made in order to avoid any potential infringements. It is good to know that trademarks in China are valid for 10 years, and the owners have the possibility of renewing them for the next 10 years. Brief information about how to register a trademark in China can be offered by one of our company formation representatives in China, so feel free to address your inquiries.

Those who want to open a WFOE in China can do so with the help of our specialists. They can take care of the formalities, especially the preparation of the necessary documents, the opening of a local bank account, the registration for the payment of taxes, and the application for a business license. We mention that the whole process can take around 3 months, but to avoid problems related to documents and language, we recommend you contact us.

Choosing online payment platforms

An important step for an online business in China is to choose the online payment platform available in the country. Make sure you offer complete facilities for both desktop and mobile users and allow them to pay in complete safety on the internet. PayPal, TenPay, and AliPay are the most used payment platforms in China, so you might want to direct your attention to these well-known online tools. Also, it is important to offer the chance of paying in different currencies in complete safety. More about Chinese online company and imposed formalities can be discussed with our local agents.

Getting the ICP license in China

Online platforms registered in China need an ICP license to be able to display assets on the market and be accessed from anywhere in the world. The Chinese government issues ICP licenses, and they are divided into two categories, as follows:
ICP filings are required for non-commercial or informational sites. This type of license does not allow e-commerce activities.
A Commercial ICP license is required for online business in China. If you have products and services that you sell with the help of a website in China, then this type of license is necessary. Here are some formalities for obtaining it:

  • You must have a local phone number to be able to apply for an ICP license.
  • You must have a representative agent, accepted by the relevant authorities, and deal with the application for the license, emails, and interaction with the department involved.
  • You must have a server and domain registered in China.
  • You must also open a merchant account for the site you want to develop in China.
  • Another important aspect concerns the registration of the site with the Internet Security Administration Service Platform, but it is not valid for all provinces in China.

Once you have obtained the ICP license, you can develop your website and publish it when it is ready. An online business in China can be established by complying with all the formalities imposed by the authorities, so do not hesitate to call on the services offered by our local agents.

Use .cn domain for credibility

An official website shows credibility in front of Chinese users, especially if it has the ending .cn. This represents a dedicated domain in China and it is preferable to use it to attract as many buyers and/or visitors to the respective site as possible. You can find out more about how to open an online company in China from our experts.

What can you sell on a Chinese website?

Foreign entrepreneurs can open a Chinese online company taking into account the formalities and restrictions imposed by the relevant authorities. It is good to know that there are no restrictions regarding the sale of products of any kind online, however, it is recommended to do a little research before starting such a business. Below are some online business ideas in China that you can put into practice:

  • Selling clothes is probably one of the most successful businesses at the moment. A site of this profile can grow in a relatively short time and generate consistent income.
  • Perfumery and cosmetic products – If you focus on quality and brand, then success is assured with a Chinese online company of this kind. However, you must make sure that the goods come from safe sources.
  • The latest generation appliances and gadgets are very popular with Chinese consumers, especially young ones. As there are always new developments in the field, it is recommended to update your website with them, in order to always have something to offer your customers.
  • Foods and beverages is another area you can focus on if you want to open an online company in China. With same-day home delivery, sites like this can have a high success rate, so you can put this idea on the list as well.
  • Pet sale site – The online domain is really provocative and interesting in China. A website that offers the opportunity to purchase your favorite animal can be an excellent business idea.
  • Online gaming can be another great business option for entrepreneurs in China. This can be a good source of money, but one should consider the requirements for licenses and permits. Here, our local specialists can offer in-depth support.

The e-commerce sector in China

The type of customer on the internet has been discovered for many years and allowed top sellers in China to focus more on consumer needs. According to a recent survey in China, more than 75% of the people interviewed recognized that they shop online every week. Mobile online shopping developed quite fast in past decades, so attention to this type of consumer is extremely important for e-commerce retailers. Below you can find interesting facts and information about the e-commerce sector in China:

  • There are around 70.6% of internet users in China;
  • 51% of the total online shopping in China is made on a mobile phone;
  • China’s retail e-commerce sales value summed up at about USD 2.64 trillion in 2021, a 14% year-on-year growth.
  • According to forecasts, online retail sales in China will approach USD 4 trillion by 2026.

Foreign entrepreneurs in China who are interested in online business in China can get in touch with one of our company formation agents and ask for complete support and assistance.