How to Start Selling in China Step by Step

Key Fact	Data Point	Source
China e-commerce market size (2025)	US$3.8 trillion	PLTFRM, 2025
CBEC import/export value (H1 2025)	RMB 1.32 trillion (+5.7% YoY)	China Customs / MOFCOM, 2025
Top legal risk for foreign brands	Trademark squatting (first-to-file system)	Trademark Law of the PRC (2019), Art. 32

Selling in China is one of the biggest commercial opportunities available to any foreign brand today. But it is also one of the most legally complex. The rules on intellectual property, customs, advertising, data privacy and tax are strict — and they change fast.

This guide gives you a complete, step-by-step roadmap for entering the Chinese market. It covers every stage: from protecting your brand name before you say a word publicly, to choosing the right sales channel, setting up your legal structure, clearing customs, marketing legally, and meeting your tax obligations.

Whether you are a small business testing the waters through cross-border e-commerce or a larger company planning a full entity setup, this article will show you exactly what to do — and what to avoid.

Why Sell in China in 2026? The Numbers Make the Case

China is not just a large market. It is the fastest-growing, most digitally connected consumer economy in the world. For foreign brands with the right strategy, the potential is enormous. For those without one, the risks are equally large.

A Market That Has Outgrown Every Competitor

China’s e-commerce ecosystem was projected to reach US$3.8 trillion in 2025, expanding roughly 50% faster than all other markets combined.^[1] That figure is not a prediction. It is the result of a consumer base that shops online as a default, uses mobile payments exclusively, and discovers brands through social platforms like Xiaohongshu and Douyin before ever visiting a store.

Cross-border e-commerce (CBEC) alone reached RMB 1.32 trillion in the first half of 2025, up 5.7% year-on-year.^[2] This channel lets foreign brands sell directly to Chinese consumers without establishing a local legal entity — a critical entry point for brands that want to test the market before committing to a full setup.

Global Brands Are Already Seeing Results

Large international retailers have validated the opportunity. Gap, Zara (Inditex) and Mango each recorded more than 30% online sales growth in China in 2025.^[3] These are not niche brands. They are mainstream global players that invested in compliant, well-structured entry strategies — and they were rewarded for it.

The key phrase there is “compliant, well-structured.” Chinese consumers still embrace international brands. But trust is built through transparency, correct labelling, platform-verified flagship stores, and demonstrated respect for local regulations. Brands that cut corners on compliance lose that trust quickly — and Chinese social media ensures that bad news travels fast.

The Cost of Not Acting Now

Every year that a foreign brand delays its China entry is a year in which a local competitor, a distributor, or a professional trademark squatter can claim your brand name, copy your product design, or establish a channel relationship that is hard to displace. China’s first-to-file trademark system means that whoever registers first wins — regardless of who created the brand. This is covered in detail in Step 1 below.

The opportunity is real. So is the urgency. The brands that succeed in China are those that move decisively and move with the right legal foundations in place from day one.

Three Ways Foreign Companies Can Sell in China

Before choosing a platform or registering anything, you need to decide which market entry model fits your business. There are three main options. Each has different cost, speed, control, and compliance implications. Choosing the wrong one wastes time and money. Choosing the right one sets you up for long-term growth.

The Three Entry Models at a Glance

Model	Description	Pros	Cons
Cross-border e-commerce (CBEC)	Sell through platforms such as Tmall Global or JD Worldwide without a Chinese entity.	Fast market test; no local company needed; products treated as personal goods.	B2C only; limited data and brand control; per-consumer purchase limits apply.
General trade / distributor	Appoint an importer, distributor or agent in mainland China.	Access to offline retail and B2B channels.	Less control over pricing and brand; potential for channel conflict.
Wholly Foreign-Owned Enterprise (WFOE)	Set up a limited-liability company in mainland China.	Full operational control; access to domestic platforms such as Taobao and Douyin Shop.	Higher cost; longer setup time (2–6 months); ongoing compliance obligations.

Legal Framework for Each Model

Each model operates under a distinct legal framework. Understanding this before you commit saves significant time and expense later.

CBEC is regulated primarily by notices issued by the General Administration of Customs (GAC) and the Ministry of Commerce (MOFCOM). Goods sold through CBEC channels are treated as personal articles, provided they stay within per-transaction and annual purchase limits. This means they are generally exempt from domestic product registration requirements — but they must comply with the regulations of the country of origin.

General trade requires that goods pass through standard customs clearance. Products must meet all Chinese national standards (GB standards), obtain any mandatory certifications (such as CCC or NMPA approval), and carry Chinese-language labelling.

WFOE and joint ventures are governed by the Foreign Investment Law of the People’s Republic of China (effective 1 January 2020). A key 2025 regulatory development: the 5-year term for subscribed capital injection has been reinstated. Investors establishing a WFOE must complete their capital contributions within five years of establishment. The WFOE must also obtain a business license and complete registration with the State Administration for Market Regulation (SAMR).

YCIP Practice Note: Most foreign brands entering China for the first time start with CBEC to validate product-market fit, then transition to a WFOE once revenues justify the setup cost. This two-stage approach reduces risk while maintaining optionality. For guidance on structuring your entry correctly, see our full range of IP and market entry services.

Step 1 — Protect Your IP Before Entering the Market

This is the single most important step for any foreign brand entering China. It must happen before anything else — before you speak to distributors, before you post on WeChat, before you register on any platform. Once your brand is visible in China, the clock is ticking on trademark squatting.

Why China’s First-to-File System Is Uniquely Dangerous

China operates a first-to-file trademark system. This means the first person to submit a trademark application — regardless of prior use anywhere else in the world — generally obtains the exclusive right to that mark in China.^[4] There is no requirement to prove that you created the brand, have been using it for years, or have customers who associate it with your business.

The consequence is brutal and well-documented. Distributors, competitors, and professional trademark squatters routinely monitor foreign brand activity — trade shows, press releases, social media — and pre-emptively register valuable marks before the original owner has filed in China. Once that happens, recovering your mark requires expensive litigation, and success is not guaranteed even with the strongest evidence. For a deep dive into this risk, read our guide on trademark squatting in China and what to do if your name has already been registered.

What You Must Register — and in What Order

A robust Chinese IP registration strategy covers three distinct elements. All three should be filed as close to simultaneously as possible:

• Your Latin-letter brand name — exactly as used in your home market, in all relevant Nice Classification classes.
• Your logo — the visual mark that consumers associate with your products.
• A Chinese-character brand name — this is critical. Chinese consumers will naturally transliterate or translate your brand name. If you do not register a Chinese-character version yourself, someone else will. A well-chosen Chinese name also dramatically improves consumer recognition and purchase intent. See our guide on how to create a perfect Chinese brand name.

Foreign applicants without a residence or business establishment in China must file through a legally qualified Chinese trademark agent. This is a mandatory requirement under the Trademark Law of the People’s Republic of China (2019 revision), Article 19.

Relevant Legal Provisions

The following provisions of the Trademark Law of the People’s Republic of China (2019 revision) are directly relevant to foreign brand owners:

• Article 4 — establishes the right to apply for trademark registration; natural persons, legal persons, and other organisations may apply.
• Article 13 — provides protection for well-known trademarks, including unregistered marks that are widely recognised.
• Article 32 — prohibits filing trademark applications in bad faith that would preempt a prior user’s rights; the key provision used to challenge squatters.
• Article 33 — sets out the opposition procedure, allowing third parties to challenge a pending application within three months of publication.
• Article 49 — allows cancellation of a registered trademark for non-use for three consecutive years.

Additionally, the Anti-Unfair Competition Law (2025 amendment) is highly relevant. Updated Article 7 now explicitly covers digital confusion acts — including the use of others’ trademarks as search keywords — and the law now has express extraterritorial application. If your activities anywhere in the world disrupt competition in China or harm Chinese entities or consumers, you face potential enforcement.

Record Your IP with China Customs

Registering your trademark with CNIPA is necessary — but it is not sufficient on its own. To actively prevent counterfeit goods from crossing the border in either direction, you must also record your registered IP with China Customs. Once recorded, Customs officers can proactively detain suspicious shipments and notify you for verification.

This is a low-cost, high-impact step that many foreign brands overlook. Our detailed guide on how to register IP with China Customs explains the process and requirements. You can also read about how Chinese Customs blocks counterfeits to understand how the system works in practice.

The 2025 Draft Trademark Law: A Critical Update

The 2025 draft revision to the Trademark Law proposes a meaningful shift: moving from a pure registration system toward a more use-oriented approach. Under the proposed changes, foreign companies will need to collect and maintain evidence of genuine commercial use — purchase orders, invoices, customs documents, and marketing materials — to defend registered marks against cancellation challenges.

This change is not yet in force, but it signals where Chinese trademark law is heading. Brands entering China now should begin building their evidence files from day one. For a full breakdown of the current process, see our China trademark registration guide for foreign companies (2025).

Cost Benchmark: A Chinese trademark application in one Nice Classification class typically costs USD $140–$300 (official CNIPA fee plus agency fee), with a registration timeline of 12–18 months. CNIPA’s expedited examination procedure can reduce the examination phase to as little as 20 working days after approval.

Step 2 — Choose the Right Sales Channel

Once your IP is protected, the next decision is where you will actually sell. China’s e-commerce landscape is vast, fragmented, and platform-specific. The wrong channel choice leads to wasted setup costs, weak conversion rates, and brand positioning problems that are difficult to reverse. The right choice puts you in front of the exact consumer segment you are targeting, on the platform where they already shop.

Your channel options split cleanly into two groups, determined by one factor: whether or not you have a Chinese legal entity.

CBEC Platforms — No Chinese Entity Required

Cross-border e-commerce platforms allow foreign brands to sell directly to Chinese consumers. Products ship either from your home country or from a bonded warehouse inside China. Legally, these goods are treated as personal imports, which means they are exempt from many domestic product registration and labelling requirements.

The leading CBEC platforms are:

• Tmall Global — Alibaba’s flagship CBEC marketplace. The most prestigious channel for international brands. Requires a trademark certificate or filing receipt to open a flagship store.
• JD Worldwide — JD.com’s cross-border platform. Strong in electronics, health, and baby products. Known for fast logistics and lower counterfeit rates.
• Kaola — NetEase’s CBEC platform, popular for beauty, health, and premium consumer goods.
• Douyin Shop (CBEC) — Allows cross-border sales through bonded warehouses. Rapidly growing, particularly for impulse-purchase and lifestyle categories driven by short-video content.
• Xiaohongshu (RED) — Combines social content with e-commerce. Essential for beauty, fashion, wellness and lifestyle brands targeting younger consumers. Over 70% of Gen-Z shoppers now search for products on Xiaohongshu before buying, making it the number one pre-purchase discovery platform.^[5]

Having an official flagship store on Tmall Global or JD Worldwide increases perceived trustworthiness by 400% compared to third-party sellers on the same platforms.^[6] For a first-time entrant, this credibility signal is invaluable.

Domestic Platforms — Chinese Business License Required

If you establish a WFOE, you unlock access to China’s domestic e-commerce ecosystem — a significantly larger market than CBEC, with more channel diversity, better data access, and greater pricing control.

• Tmall.com — The premium domestic B2C marketplace. The gold standard for brand building in China.
• JD.com — Domestic B2C with a reputation for authentic products and same-day or next-day delivery in major cities.
• Taobao — The C2C and B2C marketplace. Enormous traffic volume. Best for high-frequency, lower-priced categories.
• Pinduoduo — Group-buying platform with explosive growth among budget-conscious consumers outside tier-1 cities. Not suitable for premium brand positioning.
• Douyin Shop (domestic) — Requires a Chinese entity. Live-commerce and short-video commerce are its primary sales mechanics. Increasingly important for reaching younger demographics.

Legal Basis: E-Commerce Law Article 10

The E-Commerce Law of the People’s Republic of China (effective 1 January 2019), Article 10, requires all e-commerce operators to register as market entities. Limited exceptions exist for small-scale individual sellers, but foreign brands selling commercially on Chinese platforms are not covered by these exceptions. CBEC operators are exempt from certain domestic registration requirements but must comply with GAC and MOFCOM regulations — and platforms are increasingly required to collect, verify, and submit merchant identity and income information to regulators.

For a broader view of how IP protection intersects with e-commerce channels, our article on e-commerce IP protection in China covers platform enforcement tools, takedown procedures and brand registry programmes in detail.

YCIP Practice Note: Do not start selling on any Chinese platform without first completing a trademark clearance search. Platform brand registry programmes — such as Alibaba’s IPP and JD’s Brand Protection Programme — require a registered trademark or a verified filing receipt. Starting without this creates an enforcement gap that counterfeiters and grey-market sellers will exploit. Our complete guide to China trademark search walks through the process step by step.

Step 3 — Set Up Your Legal and Business Structure

Your legal structure determines what you can sell, where you can sell it, and how much tax and compliance overhead you carry. Getting this right at the outset avoids costly restructuring later. This step looks different depending on which entry model you chose in Step 2.

The CBEC Path: Lighter, but Not Obligation-Free

If you are entering through cross-border e-commerce, you do not need to establish a Chinese legal entity. However, “no entity” does not mean “no obligations.” Foreign sellers operating on CBEC platforms must:

• Register with Chinese customs — all CBEC operators and goods must be registered with the General Administration of Customs. Platforms submit this information on behalf of sellers, but sellers must provide accurate identity and product data.
• Comply with tax registration requirements — CBEC sellers are subject to import duties, VAT, and consumption tax on individual transactions, collected at the point of customs clearance by the platform or logistics provider.
• Comply with the new platform tax reporting regulations — since 1 October 2025, more than 6,000 domestic and overseas platforms have submitted basic information to Chinese tax authorities, and over 4,000 platforms have agreed to report tax-related information about the operators using their services.^[7] This is covered in full in Step 6.

The WFOE Path: Full Control, Full Compliance

A Wholly Foreign-Owned Enterprise gives you the broadest market access and the highest level of brand control. But it also comes with a structured set of registration and compliance obligations:

• Business license — issued by the State Administration for Market Regulation (SAMR). This is the foundational document that allows your company to operate legally in China.
• Tax registration — completed with the State Taxation Administration (STA) after the business license is issued. You will receive a Unified Social Credit Code that combines your business registration and tax identification.
• Social insurance and housing fund registration — mandatory for WFOEs with employees. Contributions cover pension, medical, unemployment, work injury and maternity insurance.
• Bank account opening — a basic corporate bank account with a Chinese bank is required for domestic transactions, payroll and tax payments.

The 2025 Capital Injection Rule: Do Not Overlook This

A critical regulatory change took effect in 2025: the 5-year term for subscribed capital injection has been reinstated under the Foreign Investment Law of the People’s Republic of China. This means investors establishing a WFOE must complete their full subscribed capital contributions within five years of establishment. Failure to meet this timeline can result in administrative penalties, restrictions on business operations, and reputational damage in dealings with Chinese counterparties.

If your WFOE was established before this rule took effect, review your current capital injection schedule immediately and ensure it is compliant.

Platform Tax Reporting: The New Reality

The Regulations on Internet Platform Companies’ Submission of Tax-related Information — State Council Decree No. 810, effective 20 June 2025 — represent the most significant change to the compliance landscape for e-commerce sellers since the E-Commerce Law itself. Under Decree No. 810, all internet platform enterprises — including overseas platforms providing profit-making services in China — are required to report:

• Operator identity information (name, address, tax identification number)
• Income earned through the platform
• Platform service fees charged

Amazon confirmed in October 2025 that it would submit tax-related information covering Chinese business operators’ identities, earnings and platform charges for Q3 2025 and beyond.^[8] Tmall, Taobao, JD, Meituan, TikTok Shop and Xiaohongshu are all participating. The practical implication: if you are generating revenue in China through any of these platforms, Chinese tax authorities now have direct visibility into that income.

Legal Basis: State Council Decree No. 810 and State Taxation Administration Announcements [2025] No. 15 & No. 16 implement the platform tax reporting framework. The Foreign Investment Law of the People’s Republic of China (effective 1 January 2020, 2025 capital injection amendment) governs WFOE establishment requirements. For IP compliance considerations specific to foreign companies operating in China, see our China IP compliance guide for foreign companies (2025).

Step 4 — Clear Customs: Tariffs, Duties, and Certifications

Even if you enter through CBEC and avoid domestic product registration requirements, your goods still cross a border. And that border has rules. Import duties, value-added tax, consumption tax, and mandatory product certifications can dramatically affect your landed cost and your ability to legally sell in China at all. This step is where many foreign brands discover — too late — that their product economics do not work as expected.

Import Duties, VAT and Consumption Tax by Category

China’s tariff system is administered by the Customs Tariff Commission of the State Council. Import duties vary significantly by product category and HS code. The following table shows 2025 Most-Favoured-Nation (MFN) tariff rates for key product categories, along with applicable VAT and consumption tax rates:^[9]

Product Category	HS Code (indicative)	2025 MFN Tariff	VAT	Consumption Tax	Key Certifications
Electronics	8517	8–12%	13%	—	CCC (China Compulsory Certification)
Textiles / Apparel	6204	10–16%	13%	—	GB standards testing
Cosmetics	3304	8%	13%	15%	NMPA registration / filing
EV batteries	8507	10–25% (2025 increase)	13%	—	CCC; UN38.3
Solar panels	8541	0–3% (green tech preference)	9%	—	CQC voluntary certification

Sources: FreightAmigo 2025 tariff guide; China Customs Tariff Commission Announcement 2024 No. 11.

The Bonded Warehouse Advantage

For CBEC sellers, bonded warehouses inside China offer a compelling logistical and cost advantage. By pre-positioning your inventory in a bonded zone — for example in Ningbo, Guangzhou or Zhengzhou — you can:

• Reduce delivery times to Chinese consumers to 2–4 days, compared to 7–14 days for international direct mail.
• Reduce effective import duty burdens by up to 60% compared to standard general trade import rates, because CBEC goods attract preferential CBEC tax rates.^[10]
• Improve platform ranking — faster fulfilment is rewarded by Tmall Global’s and JD Worldwide’s search algorithms.

Bonded warehouse programmes are government-approved and platform-integrated. Most major CBEC platforms have partnerships with bonded zones and can facilitate the setup process.

Mandatory Product Certifications — Get These Wrong and You Cannot Sell

Certain product categories require mandatory certification before they can be legally sold in China — regardless of whether you are using CBEC or general trade. The most important certifications to know are:

• CCC (China Compulsory Certification) — required for electronics, electrical appliances, motor vehicles, tyres, and certain toys. Administered by the China Quality Certification Centre (CQC). Products cannot legally enter China without CCC marking where required.
• NMPA registration or filing — required for cosmetics, medical devices, and pharmaceutical products sold through general trade. CBEC cosmetics require a filing (备案) rather than a full registration (注册) for ordinary products, but the process still takes time and requires a Chinese responsible person.
• GB standards testing — China’s national standards (Guobiao) apply to a wide range of consumer products. Non-compliance triggers customs detention, product recalls, and platform delisting.

Relevant Legal Basis

The following laws and regulations govern customs clearance and product compliance for foreign sellers:

• Customs Tariff Law of the People’s Republic of China (effective 1 December 2024) — provides the updated legal framework for import duty rates, tariff classification, and adjustments. This replaces the previous provisional Customs Tariff Rules.
• Product Quality Law of the People’s Republic of China — establishes liability standards for defective products sold in China, including products imported from overseas.
• Cosmetics Supervision and Administration Regulations (effective 1 January 2021) — governs NMPA registration and filing requirements for cosmetics entering the Chinese market.
• Regulations on the Supervision and Administration of Medical Devices — applies to any product classified as a medical device under Chinese standards.

Cost Benchmark: Customs clearance and certification costs vary enormously by product category. Budget at a minimum for GB standards testing ($500–$3,000 depending on category), CCC certification ($2,000–$8,000 for electronics), and NMPA cosmetics filing ($1,500–$5,000 per SKU). These are non-negotiable upfront investments. Brands that skip them face product seizures, platform suspension and reputational damage. For a full breakdown of what to expect when products are detained, see our article on products detained by China Customs.

Step 5 — Market Legally: Advertising, Data, and Consumer Rules

Marketing in China is not the Wild West it may once have been perceived to be. Today it is one of the most tightly regulated marketing environments in the world. Foreign brands that assume their home-market campaigns can be adapted and republished in China — without legal review — routinely face platform suspensions, regulator fines, and public relations crises.

Three legal frameworks govern almost every aspect of how you market to Chinese consumers. You need to understand all three before you spend a single yuan on advertising.

The Advertising Law: No Superlatives, No Exceptions

The Advertising Law of the People’s Republic of China (2018 revision) is strict, specific, and actively enforced. The core rules that trip up foreign brands most frequently are:

• Absolute prohibition on superlative claims. Words such as “the best,” “No. 1,” “top-ranked,” “most advanced,” “unique” and their Chinese equivalents are flatly prohibited in commercial advertising — with very limited exceptions for claims verified through official ranking bodies. This applies to all formats: banner ads, livestreams, influencer posts, product listings, and packaging.
• False advertising prohibition. Article 28 prohibits any advertising that deceives consumers about product quality, performance, ingredients, origin, or price. This includes omission of material facts.
• Endorsement rules. Article 38 holds advertising endorsers jointly liable for false advertising claims. This applies to KOLs (Key Opinion Leaders), livestreaming hosts, and celebrity ambassadors. Brands are responsible for ensuring their influencer partners comply — ignorance is not a defence.
• Livestreaming under the microscope. Since 2021, livestreaming e-commerce has been subject to particularly strict real-time monitoring by market regulators. Hosts must be licensed, and claims made during livestreams are treated as commercial advertising subject to the same rules as all other formats.

Relevant provisions: Advertising Law of the People’s Republic of China (2018 revision) — Articles 4 (truthfulness), 9 (prohibited content), 28 (false advertising), and 38 (endorser liability).

PIPL: China’s Data Privacy Law — and in Some Ways Stricter Than GDPR

The Personal Information Protection Law (PIPL), effective 1 November 2021, governs how brands collect, process, store, and transfer the personal data of Chinese users. For marketing purposes, the implications are significant:

• Separate, granular consent is required for each distinct purpose for which you use personal data — including marketing, retargeting, personalisation, and profiling. A single bundled consent at account registration does not satisfy PIPL requirements.
• Users must be able to revoke consent with one click. If a consumer withdraws consent, you must stop processing their data for that purpose immediately. Your CRM and marketing automation systems must handle opt-outs in real time.
• Fines for non-compliance are severe. Under Article 66 of PIPL, penalties can reach RMB 50 million or 5% of annual China revenue — whichever is higher.^[11] For a mid-sized brand generating RMB 200 million annually in China, that is a potential RMB 10 million fine for a single serious violation.

Relevant provisions: Personal Information Protection Law (PIPL) (effective 1 November 2021) — Articles 13–15 (legal bases for processing), 17 (transparency obligations), 23 (conditions for providing data to third parties), and 38–39 (conditions for cross-border data transfers).

Cross-Border Data Transfers: The CAC Assessment Requirement

This is the compliance area most commonly overlooked by foreign brands — and one of the most operationally disruptive when discovered late. If your marketing technology stack sends Chinese user data outside of China — to a global analytics platform, a DSP, an email service provider, or your headquarters CRM — you are conducting a cross-border data transfer subject to Chinese regulation.

Under the Data Security Law (DSL) and the Cybersecurity Law (CSL), combined with PIPL Article 38, any such transfer now requires one of the following:

• A CAC (Cyberspace Administration of China) security assessment — mandatory for transfers above defined data volume thresholds. Processing time: 6–12 months.
• A Personal Information Protection Certification from a CAC-accredited body.
• Execution of standard contractual clauses (SCCs) prescribed by the CAC.

Most international brands with a global martech stack trigger the security assessment requirement. The 6–12 month processing time means you must begin this process well before your marketing launch. Brands that have not yet completed this assessment are increasingly shifting to local tracking solutions to keep data onshore: Tencent TAG, ByteDance Volcano Engine, and Alibaba Tanx are the leading alternatives.

The 2025 Anti-Unfair Competition Law: Digital Confusion Acts Now Explicitly Covered

The 2025 amendment to the Anti-Unfair Competition Law introduced explicit coverage of digital confusion acts — including the use of competitors’ trademarks as search keywords in paid search advertising. Updated Article 7 prohibits any act that creates confusion between one business and another through the use of identical or similar commercial identifiers in digital environments.

For foreign brands, this cuts both ways. You can now take action against competitors in China using your trademark as a keyword to divert traffic. But your own digital advertising team must ensure your keyword strategy does not inadvertently infringe Chinese competitors’ marks. The law also carries express extraterritorial application — enforcement can follow you even if your advertising operations are based outside China. For more detail, read our analysis on China IP compliance for foreign companies in 2025.

YCIP Practice Note: Before launching any paid digital campaign in China, have your advertising materials reviewed by a China-qualified lawyer. The cost of a compliance review is a fraction of the cost of a regulatory fine or platform suspension. Our consultation and litigation support team regularly assists foreign brands with pre-launch advertising compliance reviews.

Step 6 — Understand Your Tax and Reporting Obligations

Tax compliance in China has become significantly more complex for foreign sellers since 2025. The combination of a new VAT Law, reinstated WFOE capital rules, and the sweeping platform tax reporting framework introduced by State Council Decree No. 810 means that operating in China without proper tax advice is no longer a manageable risk. This step breaks down what you owe, when you owe it, and who now knows about it.

Import-Stage Taxes: What You Pay at the Border

Every product entering China — whether through CBEC or general trade — is subject to three potential taxes at the point of customs clearance:

• Import duty — the tariff rate applicable to your product’s HS code (see the full table in Step 4 above).
• Value-added tax (VAT) — the standard rate is 13% for most goods, 9% for certain categories including agricultural products and utilities. The VAT Law of the People’s Republic of China, effective 1 January 2026, consolidated and updated the previous provisional VAT rules into a formal statutory framework.
• Consumption tax — applies to specific luxury and discretionary categories including cosmetics (15%), alcohol, tobacco, jewellery, and high-end watches. Consumption tax is calculated on the dutiable value plus import duty.

For CBEC transactions, a preferential tax formula applies. Goods below the per-transaction and annual purchase limits are taxed at 70% of the standard combined rate — a meaningful cost advantage over general trade imports.

Corporate Income Tax for WFOEs

WFOEs are subject to corporate income tax (CIT) at the standard rate of 25% on taxable income generated in China. Several preferential categories exist:

• Small low-profit enterprises — companies with annual taxable income below RMB 3 million, fewer than 300 employees, and total assets below RMB 50 million may qualify for a reduced CIT rate of 5% on the first RMB 3 million of income.
• High-tech enterprises — companies certified as high-tech enterprises qualify for a reduced CIT rate of 15%.
• Encouraged industries in specific zones — foreign investment in encouraged industries in western China and certain free trade zones may qualify for additional reductions.

A qualified Chinese tax advisor should assess your exposure before your WFOE is established, not after. IP structuring — particularly how royalties flow between your Chinese entity and your overseas IP holding company — carries additional transfer pricing scrutiny and withholding tax implications. Our licensing and transaction services team works alongside tax advisors to align your IP ownership and tax structures from day one.

State Council Decree No. 810: Tax Authorities Now See Your Revenue

State Council Decree No. 810 — the Regulations on Internet Platform Companies’ Submission of Tax-related Information, effective 20 June 2025 — is the most consequential tax compliance development for e-commerce sellers in years. The practical effect is straightforward: Chinese tax authorities now have direct, automatic visibility into your China revenue.

The scope is broad. As of 1 October 2025, more than 6,000 domestic and overseas platforms have submitted basic information to Chinese tax authorities, and over 4,000 platforms have agreed to report tax-related information of operators using their platforms.^[12] The platforms covered include Amazon, AliExpress, TikTok Shop, Tmall, Taobao, JD.com, Meituan and Xiaohongshu. Amazon confirmed in October 2025 that it would submit tax-related information covering Chinese business operators’ identities, earnings and platform charges for Q3 2025 and beyond.

The information being reported covers three categories:

• Operator identity — legal name, address, identification or registration number, and tax identification number.
• Income data — total revenue generated through the platform during the reporting period.
• Platform fees — commissions, service fees, and other charges levied by the platform on the operator.

If you have been operating in China without full tax registration, regularise your position now — before a platform audit does it for you.

Relevant Legal Basis

• Enterprise Income Tax Law of the People’s Republic of China — governs CIT rates and preferential treatment for qualifying entities.
• VAT Law of the People’s Republic of China (effective 1 January 2026) — consolidated statutory framework for value-added tax.
• State Council Decree No. 810 and State Taxation Administration Announcements [2025] No. 15 & No. 16 — implement platform tax reporting obligations for domestic and overseas platforms operating in China.

Cost and Timeline Benchmarks for Entering the Chinese Market

One of the most common questions from foreign brands considering China entry is: how much will this actually cost, and how long will it take? Costs vary significantly depending on your product category, entry model, and target markets. The table below provides reliable benchmark ranges based on current market data.

Item	Typical Cost (USD)	Typical Timeline
Chinese trademark application (one class, via qualified agent)	$140–$300 (official fee + agency fee)	12–18 months; 20 working days via expedited examination
WFOE setup (business license, chops, bank account)	$5,000–$15,000+ (varies by city)	2–6 months
Tmall Global flagship store setup	$5,000–$25,000 deposit + annual service fee	4–8 weeks
CAC security assessment (cross-border data transfer)	Variable (legal and consulting fees)	6–12 months
CCC certification (electronics)	$2,000–$8,000 per product	3–6 months
NMPA cosmetics filing (ordinary product, CBEC)	$1,500–$5,000 per SKU	2–4 months
Full-scale market entry (IP portfolio + entity + platform onboarding)	$20,000–$100,000+	6–18 months

Sources: YCIP client benchmarks; PLTFRM 2025 market entry data; China-Briefing 2025 WFOE setup guide.

Where to Allocate Your Budget First

If your budget is limited, prioritise in this order:

1. Trademark registration — the lowest-cost, highest-risk item if skipped. A squatted trademark can cost tens of thousands of dollars to recover — if recovery is possible at all. Use our complete cost guide to China trademark registration (2025) to budget accurately.
2. Product certification — if your product requires CCC or NMPA approval, this is non-negotiable. No certification means no legal sales. Budget and timeline this early.
3. Platform onboarding — flagship store deposits are significant but recoverable through sales. Budget these as working capital, not sunk costs.
4. WFOE setup — only if your business model requires domestic sales or B2B operations. Do not set up a WFOE speculatively before validating product-market fit through CBEC.
5. CAC security assessment — start this process as early as possible given the 6–12 month timeline. Do not let your martech stack become a compliance liability at launch.

Your First 90-Day Checklist for Entering China

The six steps above cover everything you need to understand. But understanding and doing are different things. This checklist turns the framework into an action plan. Work through it in order. Each item either unlocks the next, or protects you from a risk that gets harder to fix the longer it is left unaddressed.

Print this out. Assign an owner to each item. Set a deadline. China market entry rewards preparation and punishes improvisation.

Weeks 1–4: IP and Market Foundations

• Conduct a China trademark availability search using the CNIPA trademark database. Check your Latin-letter name, logo, and shortlisted Chinese-character names across all relevant Nice Classification classes. Our complete guide to China trademark search explains how to run this correctly.
• File Chinese-character, Latin-letter, and logo trademarks with CNIPA through a qualified Chinese trademark agent. Do not delay. File before you speak to any Chinese distributor, platform, or media contact.
• Determine your entry model — CBEC, general trade, or WFOE — based on your product category, target customer, budget, and timeline. If uncertain, start with CBEC.
• Classify your products under the correct HS codes and calculate your landed costs. Factor in import duty, VAT, consumption tax (if applicable), freight, and customs clearance fees. This is your true cost of goods in China.

Weeks 5–8: Regulatory Compliance and Platform Preparation

• Identify mandatory product certifications — CCC, NMPA filing or registration, GB standards testing — and initiate the application process. These take months. Start now, even if your launch is not imminent.
• Select your platform or platforms and begin the merchant onboarding process. For Tmall Global or JD Worldwide, prepare your brand story, product catalogue, trademark certificate or filing receipt, and business registration documents from your home country.
• Establish a data compliance roadmap. Audit your marketing technology stack. Identify every tool that collects or processes Chinese user data. Determine whether a CAC security assessment, SCC execution, or certification is required. Engage a qualified data privacy lawyer to advise.
• Draft compliant advertising and marketing materials. Remove all superlative claims. Ensure influencer and KOL contracts include explicit compliance obligations for advertising content. Review product listing copy against the Advertising Law before going live.

Weeks 9–12: Tax, Customs, and IP Enforcement

• Set up tax registration and reporting. If operating through CBEC, confirm your platform’s compliance with Decree No. 810 reporting requirements and ensure your identity and tax information on file is accurate and up to date. If setting up a WFOE, engage a Chinese accountant to establish your tax registration and payroll systems.
• Record your registered IP with China Customs. Once your trademark registration certificate is issued — or even at the filing receipt stage in some cases — record it with the General Administration of Customs. This activates border enforcement. Read our guide on how to register IP with China Customs for the step-by-step process.
• Set up platform brand protection programmes. Enrol in Alibaba’s Intellectual Property Protection (IPP) platform, JD’s Brand Protection Programme, and equivalent tools on any other platforms you use. Monitor for counterfeit listings and grey-market sellers from day one. Our article on removing counterfeit listings from Alibaba explains the enforcement process.

People Also Ask: Common Questions About Selling in China

These are the questions that foreign brand owners ask most frequently when evaluating a China market entry. The answers below are based on current Chinese law and regulatory practice as of 2025.

Can a foreign company sell in China without a local entity?

Yes — and this is the route most foreign brands use to enter China for the first time. Cross-border e-commerce (CBEC) platforms such as Tmall Global, JD Worldwide, Kaola, Douyin Shop (CBEC), and Xiaohongshu allow foreign brands to sell directly to Chinese consumers without establishing a Chinese legal entity. Products sold via CBEC are treated as personal imports and are generally exempt from domestic product registration and Chinese-language labelling requirements — though they must comply with the laws and standards of the country of origin and with Chinese customs and tax regulations. CBEC is limited to B2C sales, and annual per-consumer purchase limits apply. For B2B sales or domestic platform access, a Chinese entity is required.

Do I need a Chinese trademark before selling in China?

Strongly yes. China operates a first-to-file trademark system, meaning the first party to file an application — regardless of prior use anywhere in the world — obtains the exclusive right to that mark in China. Delaying registration exposes your brand to professional trademark squatters who monitor foreign brand activity specifically to pre-register valuable marks. Beyond protection, a registered Chinese trademark is a practical commercial requirement: Tmall, JD, and most other major platforms require a trademark certificate or at least a filing receipt to open a flagship or brand store. Customs recordal — which allows border seizure of counterfeits — also requires a registered mark. See our China trademark registration guide for foreign companies for the full process.

How long does it take to register a trademark in China?

A standard trademark application in China typically takes 12–18 months from the date of filing to the issuance of a registration certificate, assuming no office actions, oppositions, or examination issues arise. CNIPA has introduced an expedited examination procedure that can reduce the formal examination phase to as little as 20 working days after the expedited request is approved — though the full process including publication and opposition period still adds additional time. For brands that need platform access before their registration is complete, a filing receipt (issued shortly after submission) is often accepted by Tmall Global and JD Worldwide as proof of trademark rights. Our China trademark registration process guide for 2025 covers every stage in detail.

What are the main legal risks foreign brands face when entering China?

The five most significant risks, in order of frequency and financial impact, are:

1. Trademark squatting — a local party registers your mark before you do, forcing expensive litigation or rebranding. Preventable by filing early.
2. Advertising law violations — using superlative claims, unverified performance assertions, or non-compliant influencer content. Can trigger platform suspension and regulator fines.
3. Cross-border data transfer violations under the PIPL — sending Chinese user data offshore without a CAC security assessment or equivalent compliance mechanism.
4. Product certification gaps — selling products without mandatory CCC, NMPA, or GB certifications, leading to customs seizures, platform delisting, and potential recall liability.
5. Tax reporting failures — operating through platforms covered by Decree No. 810 without proper tax registration, resulting in back-tax assessments and penalties.

Our article on common IP mistakes foreign businesses make in China covers the most avoidable errors in more detail.

How much does it cost to start selling in China?

Costs vary significantly by entry model and product category. A lean CBEC launch — covering trademark filing, Tmall Global or JD Worldwide flagship store setup, and basic compliance — can start at USD $10,000–$30,000. A full-scale market entry including WFOE establishment, a complete trademark portfolio across multiple classes, product certifications, and domestic platform onboarding typically ranges from USD $20,000 to $100,000+, depending on the complexity of your product range and the number of platforms you target. The cost of getting it wrong — through trademark disputes, regulator fines, or product recalls — typically far exceeds the cost of getting it right from the start. See the full benchmark table in the Cost and Timeline section above.

Is China’s 2025 Anti-Unfair Competition Law relevant to foreign brands?

Yes — and its relevance has increased significantly with the 2025 amendment. The updated law now explicitly covers digital confusion acts, including the use of others’ trademarks as paid search keywords. More importantly for foreign brands, the 2025 amendment includes express extraterritorial application: if your business activities anywhere in the world disrupt competition in the Chinese market or harm Chinese entities or consumers, you are subject to Chinese enforcement action. This means your global marketing strategy, keyword campaigns, and competitive tactics need to be reviewed for China compliance — even if your operations are based entirely outside China. For a full analysis of how this law affects foreign companies, see our China IP compliance guide for 2025.

How Yucheng IP Law (YCIP) Can Help You Enter China the Right Way

Entering China successfully requires more than a market strategy. It requires a legal foundation that protects your brand, keeps you compliant, and gives you the tools to enforce your rights when challenges arise. That is exactly what Yucheng IP Law (YCIP) is built to provide.

YCIP is a China-based intellectual property law firm with a team of specialists covering every dimension of IP law — trademarks, patents, copyright, trade secrets, branding, and market entry compliance. Our lead attorney, Peter H. Li, brings expertise across the full spectrum of IP matters that foreign companies encounter when entering and operating in China.

Our Services for Brands Entering China

We offer a complete range of services aligned to every step of the China market entry process described in this guide:

• Trademark clearance searches and strategic filing — Latin-letter, logo, and Chinese-character marks filed across the right Nice Classification classes, with a filing strategy designed to close the gaps that squatters exploit. See our trademark and copyright services.
• IP portfolio management and enforcement — ongoing monitoring of your registered marks, opposition filings against infringing applications, and enforcement action against counterfeit sellers on Alibaba, JD, and other platforms. Our track record of removing counterfeit listings gives clients confidence that their brand is protected beyond registration.
• China Customs recordal and anti-counterfeiting strategy — we handle the full recordal process and advise on border enforcement procedures to intercept counterfeit goods at the point of import or export. Read our guide on how Chinese Customs blocks counterfeits to understand the system.
• Patent and design protection — for brands with proprietary product designs or technologies, our patent and design services cover filing, prosecution, and enforcement of invention patents, utility models, and design patents with CNIPA.
• IP licensing and transaction support — structuring royalty agreements, technology transfer arrangements, and IP assignment transactions for brands commercialising their IP through Chinese partners or entities. See our licensing and transaction services.
• Consultation and litigation support — for brands already facing trademark disputes, infringement claims, or administrative challenges, our litigation support team provides strategic advice and representation before CNIPA, the Beijing IP Court, and other relevant tribunals.

Our clients range from global consumer brands and technology companies to SMEs taking their first steps into the Chinese market. Whatever your size or sector, we provide the same rigorous, commercially minded approach to IP protection.

Start with a trademark quote. For most brands, the first step is a trademark availability search followed by a filing strategy assessment. Submit our trademark application form to receive a quote, or contact our team directly to discuss your China market entry plans.

Conclusion: China Rewards the Prepared

Selling in China is genuinely one of the most significant commercial opportunities available to any foreign brand. A US$3.8 trillion e-commerce market, a digitally sophisticated consumer base that actively seeks international brands, and a growing cross-border e-commerce infrastructure that makes entry more accessible than ever — the fundamentals are compelling.

But the brands that succeed in China are not those that move fastest. They are those that move correctly. The six steps in this guide — protecting your IP, choosing the right channel, building your legal structure, clearing customs, marketing compliantly, and meeting your tax obligations — are not bureaucratic boxes to tick. Each one addresses a real risk that has derailed real brands with real budgets and real ambitions.

The most expensive mistake you can make in China is assuming that your global brand reputation protects you. It does not. China’s first-to-file trademark system, its strict advertising rules, its data privacy enforcement, and its new platform tax reporting framework all operate independently of how well known your brand is elsewhere in the world.

The least expensive thing you can do right now is file your Chinese trademark. It takes days to initiate, costs a few hundred dollars per class, and closes the door on the single most common and most damaging risk that foreign brands face in China.

The next step is yours. If you are ready to start — or if you are already in China and need to review your existing IP position — the YCIP team is ready to help. We offer practical, commercially focused IP and market entry advice grounded in years of China-specific experience.

Get a Trademark Quote Today    Talk to Our Team

References and Further Reading

1. PLTFRM, How Overseas Brands Are Tapping into China’s $3.8 Trillion E-Commerce Potential (2025) — pltfrm.com.cn
2. Ministry of Commerce of the People’s Republic of China (MOFCOM), Cross-Border E-Commerce Statistics (H1 2025) — mofcom.gov.cn
3. China Briefing, SMEs Selling to China: Practical Tips (July 2025) — china-briefing.com
4. China National Intellectual Property Administration (CNIPA), Trademark System Overview — cnipa.gov.cn
5. PLTFRM, Gen-Z Consumer Behaviour and Xiaohongshu Pre-Purchase Research Data (2025) — pltfrm.com.cn
6. PLTFRM, Flagship Store Trust and Conversion Data (2025) — pltfrm.com.cn
7. State Taxation Administration of China, Platform Tax Reporting Compliance Update (October 2025) — chinatax.gov.cn
8. State Taxation Administration of China, Amazon Tax Reporting Confirmation (October 2025) — chinatax.gov.cn
9. FreightAmigo, Understanding China Import Taxes and Customs Tariffs (2025) — freightamigo.com
10. FreightAmigo, CBEC Bonded Warehouse Duty Advantage Analysis (2025) — freightamigo.com
11. Cyberspace Administration of China (CAC), Personal Information Protection Law Enforcement Guidance — cac.gov.cn
12. State Taxation Administration, Announcement [2025] No. 15 & No. 16, Platform Tax Reporting Implementation Rules — chinatax.gov.cn
13. EU SME Centre, Ways to Enter the Chinese Market 2025 Report — eusmecentre.org.cn
14. Baker McKenzie FenXun, Doing Business in China (2025 edition) — bakermckenzie.com
15. China Customs Tariff Commission, Announcement 2024 No. 11, Import Tariff Rate Adjustments — mof.gov.cn

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Disclaimer: This article is provided for general informational purposes only and does not constitute legal advice. The information contained herein reflects publicly available materials and regulatory developments as of May 2025. Laws and regulations in the People’s Republic of China are subject to frequent change. Readers should not act on the basis of this article without first obtaining advice from a qualified legal professional with expertise in Chinese law relevant to their specific circumstances. Yucheng IP Law (YCIP) accepts no liability for actions taken or not taken based on the content of this article.