Legal Requirements for Selling Products in China

China is the world’s largest e-commerce market, with cross-border import and export trade reaching RMB 2.65 trillion in 2024 and forecast to hit RMB 3.25 trillion by 2026.^[1] For foreign businesses, the opportunity is enormous. But so is the complexity.

China’s legal framework for selling products is multi-layered. It spans company law, product safety, intellectual property, advertising, data privacy, and tax — and the rules differ significantly depending on how you enter the market. Getting this wrong is expensive. Penalties can reach RMB 50 million, and platforms can delist your products overnight.

This guide breaks down every major legal requirement clearly and practically. Whether you are entering China for the first time or auditing your existing operations, this article gives you what you need to make informed decisions and stay compliant.

Two Ways to Sell in China — and Why It Changes Everything

Before diving into specific regulations, you must answer one foundational question: How will you sell in China? The answer determines your entire compliance profile — from whether you need a Chinese business licence to how your products must be labeled.

There are two legally distinct routes into the Chinese market. Each has its own regulatory framework, tax treatment, and operational requirements. Mixing them up is one of the most common and costly mistakes foreign businesses make.

Setting Up a Local Entity (WFOE or Joint Venture)

If you want to sell through domestic retail channels — operating physical stores, listing on mainstream domestic platforms like JD.com or Taobao, or distributing through Chinese wholesalers — you must establish a Chinese legal entity.

The two most common structures for foreign investors are:

• Wholly Foreign-Owned Enterprise (WFOE): You retain full ownership and operational control. Best for companies that want to protect proprietary processes or trade secrets without sharing control with a local partner.
• Joint Venture (JV): A partnership with a Chinese company. Often necessary for industries on the Negative List (restricted sectors), where foreign ownership caps apply.

The governing law is the Foreign Investment Law of the PRC (effective 1 January 2020). Under Article 4, China applies a Pre-Establishment National Treatment and Negative List system. If your business activity does not appear on the Negative List, you only need to file a record — no prior approval is required. This significantly streamlined market access for many foreign investors.

Operating as a local entity means you are subject to the full scope of Chinese domestic law: corporate tax, VAT registration, product liability, employment law, and domestic advertising standards. You will also need a business licence and, for any online presence, an ICP filing or licence.

Cross-Border E-Commerce (CBEC) — No Local Entity Needed

The CBEC model allows foreign companies to sell directly to Chinese consumers from overseas — either via bonded warehouses inside China’s free trade zones or through direct international mail. No local entity is required.

CBEC operates under a dedicated policy framework, anchored by the Circular on Improving the Regulatory Policy on Cross-Border E-Commerce Retail Imports (Shanghai Customs No. 486 of 2018), which was extended indefinitely in 2022 and remains in force through 2026. Key features of the CBEC model include:

• No Chinese business licence required — you register as an overseas merchant with the platform (e.g., Tmall Global, JD Worldwide, Kaola).
• Relaxed labeling rules — products sold under CBEC are exempt from the Chinese physical label requirement that applies to general trade imports.
• Tax concessions — import tariff is 0%; VAT and consumption tax are levied at 70% of the statutory rate. For a product with 13% standard VAT, the effective rate is just 9.1%.
• Personal purchase limits apply — annual limit of RMB 26,000 per person; single transaction limit of RMB 5,000 (Circular Cai Guan Shui [2018] No. 49).^[1]
• Products must appear on the CBEC Positive List — the revised 2022 list covers 1,476 tariff lines. Products outside this list cannot use the CBEC import channel.

The CBEC channel is ideal for foreign brands testing the Chinese market, direct-to-consumer product launches, or businesses in categories like cosmetics, health supplements, and food — where domestic entity setup is more heavily regulated.

However, CBEC is not unlimited. You must establish an after-sales service contact in China, comply with consumer protection obligations, and — critically — still register your trademark in China regardless of which channel you use.

Business Licenses and ICP Filing Requirements

Once you decide on your market entry mode, the next step is registration. For domestic operations, this means securing both a business licence and — if you operate online — an ICP filing or licence. These are not optional formalities. They are legal prerequisites that trigger the moment you start trading.

When a Business Licence Is Mandatory

Under Article 10 of China’s E-Commerce Law (effective 1 January 2019), all e-commerce operators — except for individuals selling home-grown agricultural products or individuals with genuinely negligible sales — must register as a market entity and hold a valid business licence. This applies to anyone operating a store on a Chinese domestic platform, running a Chinese-language brand website hosted in China, or distributing through domestic wholesale networks.

Failure to obtain a business licence when required can result in a fine of RMB 10,000 to 30,000 under Article 76 of the E-Commerce Law. The platform may also be required to suspend your store.

In 2026, major platforms including Douyin (TikTok) Shop China require merchants to upload both a valid business licence and an ICP filing during the store setup process. Without these documents, the store onboarding process cannot be completed.

For foreign-invested enterprises, the business licence is issued after completing WFOE or JV registration through the State Administration for Market Regulation (SAMR) or its local branches. The process includes name approval, scope of business registration, registered capital filing, and legal representative designation.

ICP Filing vs. ICP Licence — What’s the Difference?

Any website hosted on a mainland China server and targeting Chinese users must comply with China’s Internet Content Provider (ICP) system. There are two types, and confusing them is a costly mistake:

• ICP Filing (备案, Bèi’àn): Required for informational or content websites that do not engage in commercial transactions. This is a simpler administrative registration, processed through the Ministry of Industry and Information Technology (MIIT). A typical brand’s informational landing page or blog would fall here.
• ICP Licence (增值电信业务经营许可证): Required for commercial websites that collect payments, facilitate transactions, or provide value-added telecommunications services. This is a full operating licence. The legal basis is Article 7 of the Telecommunications Regulations of the PRC.

If you operate a Chinese-language e-commerce website or an official brand store with a .cn domain hosted in China, you need an ICP licence — not just a filing. Operating without one is a criminal-level telecommunications violation.

Purely overseas websites — hosted outside mainland China and not specifically designed to serve Chinese users — are generally exempt. However, if you embed your operations within a licensed Chinese platform (which is the standard CBEC approach), the platform’s own ICP licence covers your store.

Practical note: if you are operating via Tmall Global, JD Worldwide, or similar CBEC platforms, the ICP requirements are handled at the platform level. Your primary obligation is to provide your overseas company’s incorporation documents during the merchant onboarding process.

Product Compliance — GB Standards, CCC Certification, and Labeling

Product compliance is where many foreign sellers face their first major legal exposure in China. The rules are technical, category-specific, and actively enforced. Non-compliance leads to customs seizure, market confiscation, and substantial fines — often before a business even realizes it has a problem.

Which Products Require CCC Certification?

China’s Compulsory Product Certification (CCC) system — established under the Regulation on Compulsory Product Certification — applies to 16 product categories. These include:

• Electrical wires and cables
• Circuit breakers and switches
• Low-voltage electrical apparatus
• Small power motors
• Household electrical appliances
• Audio and video equipment
• Information technology equipment
• Lighting equipment
• Telecommunications terminal equipment
• Motor vehicles and safety components
• Toy products
• Safety helmets

Any product in these categories must bear the CCC mark before it can be sold, imported, or used in China. Selling without certification — or with a falsified certificate — triggers confiscation of all non-compliant goods and fines ranging from RMB 50,000 to RMB 200,000, as set out under Article 67 of the Certification and Accreditation Regulations.^[2]

Under the CBEC model, CCC is generally not required for personal-use quantities — this is one of the key regulatory advantages of the CBEC channel. However, this exemption does not apply once volumes suggest commercial resale rather than personal consumption.

Chinese Label Requirements for Imported Goods

For general trade imports, labeling is non-negotiable. Under Article 27 of the Product Quality Law of the PRC (amended 2018) and Article 27 of the Standardization Law, every imported product must carry a Chinese label that includes:

• Product name
• Ingredients or components
• Net content / specifications
• Country of origin
• Name and address of the Chinese importer or distributor
• Production date and shelf life (where applicable)
• Safety instructions or warnings
• National standard code

Labels must be in Chinese — bilingual labels are acceptable, but the Chinese text must be equally prominent. Labels must be physically affixed or printed on the product or packaging before it clears Chinese customs. Under General Administration of Customs Order No. 249 (2021), imported goods must have the Chinese label verified and filed with China Inspection and Quarantine (CIQ) at the port of entry.^[3]

Missing or non-compliant labels result in customs holds, mandatory relabeling at the importer’s cost, or outright destruction of the shipment for perishable goods.

CBEC Labeling Exemptions — and Their Limits

Under the CBEC framework, physical Chinese labels are not required. This is a meaningful exemption — it removes one of the most expensive and logistically complex compliance steps for general trade importers.

However, the exemption is not unlimited. CBEC sellers must still provide:

• Chinese-language product information accessible via the platform listing (including ingredients, safety warnings, and usage instructions).
• An electronic label or QR code that consumers can scan for full product details in Chinese.
• Accurate and complete product descriptions on the platform — misrepresentation of ingredients, origin, or certifications constitutes a violation of the E-Commerce Law, Article 17.

Additionally, certain product categories — particularly food, cosmetics, and health products — have category-specific labeling requirements that apply even within CBEC. For example, imported cosmetics sold via CBEC must comply with the Regulations on the Supervision and Administration of Cosmetics (2020), which impose specific ingredient disclosure requirements regardless of import channel.

Intellectual Property — Trademark Registration Before You Sell

Intellectual property is not just a legal formality in China — it is a market access prerequisite. Without a registered Chinese trademark, you may find yourself legally locked out of the market you are trying to enter: unable to open a branded store, unable to stop counterfeits, and at risk of being sued in your own name by a trademark squatter. This is one of the most common and most expensive mistakes foreign businesses make in China.

For a comprehensive overview of the trademark registration process, see our guide: China Trademark Registration Guide for Foreign Companies (2025).

China’s First-to-File System Explained

China operates on a strict first-to-file trademark system. This means trademark rights are granted to the first party to file a registration application with the China National Intellectual Property Administration (CNIPA) — regardless of who used the mark first, even internationally.

This is fundamentally different from the US and EU systems, where prior use can establish common law rights. In China, prior use provides almost no legal protection unless you can prove the mark has achieved a very high level of fame (chi ming shang biao — well-known trademark status), which is an extremely high bar.

The practical consequences are stark:

• A Chinese distributor, manufacturer, or bad-faith filer can register your brand name — and then use that registration to block you from selling under your own brand in China.
• You may face demands to purchase your own trademark back at inflated prices.
• Platforms like Tmall and JD will delist your products in response to complaints from the squatter — even if the squatter has never used the mark commercially.

For a detailed breakdown of this risk, see: Trademark Squatting in China: What Foreign Brands Must Know and China’s First-to-File System — Why It Matters for Foreign Brands.

Trademark Recordal with China Customs

A registered Chinese trademark is also the foundation of customs border protection. Under General Administration of Customs Order No. 183, trademark owners can record their registered marks with China Customs. Once recorded, Chinese customs officers can:

• Proactively detain shipments suspected of carrying infringing goods.
• Notify the rights holder and allow them to inspect and confirm infringement.
• Seize and destroy counterfeit goods without requiring the rights holder to initiate separate legal proceedings for each shipment.

This customs recordal system is one of the most cost-effective anti-counterfeiting tools available to foreign brands. But it is only accessible to holders of registered Chinese trademarks — not pending applications, not foreign registrations, and not common-law marks. To learn more about this process, see: How to Register IP with China Customs and How Chinese Customs Block Counterfeits.

How Platforms Like Tmall and JD Enforce IP

China’s E-Commerce Law, Articles 41–43, requires platforms to implement a notice-and-takedown system. Rights holders can submit takedown requests against infringing listings, and platforms must act promptly or face joint liability.

In practice, this system works both for and against foreign brands:

• For registered rights holders: You can use the platform’s IP protection portal to remove counterfeit or infringing listings quickly — often within 24–48 hours. Alibaba’s IPP Platform and JD’s equivalent allow verified rights holders to file complaints and monitor results.
• Against unregistered foreign brands: A trademark squatter holding a Chinese registration can file a complaint against your official store, forcing the platform to delist your products until the dispute is resolved — which can take months or years.

For most categories, Tmall and JD require a valid Chinese trademark certificate — or at minimum a CNIPA acceptance notice — before approving a branded store application. Without this, the onboarding process will not proceed.

YCIP Practice Note: Filing a Chinese trademark as early as possible — ideally before any public announcement of China market entry — is the single most cost-effective IP protection step available. Multi-class applications are strongly recommended: Class 35 (retail services) should be filed alongside the primary product class to protect online and offline sales channels. Contact YCIP’s trademark team for a pre-filing risk assessment.

For further reading on trademark strategy for foreign businesses in China, see:

• Trademark Registration in China for US Businesses
• Defensive Trademark Strategies in China
• China Trademark Registration Guide — Protect Your Brand Now

Advertising and Consumer Protection Rules

Once your products are listed and your business is registered, day-to-day operations in China come with their own compliance obligations. China’s advertising and consumer protection laws are among the most actively enforced in the world. In 2023 alone, China’s market regulator imposed fines exceeding RMB 82 billion across all advertising violations — a significant portion of which targeted online product claims and platform sellers.^[4] Foreign brands are not immune, and platform operators are increasingly held jointly liable for the conduct of their merchants.

Banned Words and Superlative Advertising

China’s Advertising Law (amended 2018), Article 9 contains a strict prohibition on certain types of language in commercial advertising. The following categories of language are banned outright:

• Absolute superlatives: words such as “the best,” “No. 1,” “top-ranked,” “most advanced,” or “highest quality” in Chinese (最好、第一、最高、最先进).
• State symbols and references: use of the national flag, national emblem, national anthem, or names of state organs in advertising.
• Unsubstantiated comparative claims that disparage competitors.
• Claims that a product has received government endorsement when it has not.

The penalties under Article 57 of the Advertising Law are significant: a fine of RMB 200,000 to RMB 1,000,000 per violation. In severe or repeat cases, the market regulator can revoke the business licence entirely. Platforms are required to remove non-compliant advertisements and can face their own fines for allowing prohibited content to remain live after being notified.^[4]

Practically speaking, this means that all product listings, promotional banners, live-stream scripts, and KOL (Key Opinion Leader) briefs must be reviewed for prohibited language before publication. This is particularly important for product categories where superlative claims are commercially tempting — cosmetics, health products, food supplements, and electronics.

KOL and Livestream Commerce Rules

Livestream commerce is one of the fastest-growing sales channels in China, but it comes with its own regulatory layer. The Administrative Measures for Internet Advertising (effective 1 May 2023) classify paid product promotions by influencers and live-streamers as commercial advertising. This means:

• All paid partnerships between a brand and a KOL or live-streamer must be clearly disclosed as advertising content — through labels such as “广告” (ad) or “推广” (promotion) that are clearly visible during the broadcast.
• Live-streamers who make false or unsubstantiated product claims are personally liable alongside the brand for misleading consumers.
• Platforms hosting commercial live-streams must maintain advertiser records and provide them to regulators on request.

Foreign brands working with Chinese influencer agencies or MCN (Multi-Channel Network) companies should ensure their contracts explicitly assign compliance responsibility and require the KOL to adhere to advertising law standards.

Consumer Rights and Refund Obligations

China’s Consumer Protection Law (amended 2013) gives Chinese consumers robust rights that foreign brands must build into their after-sales processes:

• 7-day unconditional return right (Article 25): For goods purchased online, consumers are entitled to return products within 7 days without giving a reason — except for certain perishable, custom-made, or digital goods.
• Triple compensation for fraud (Article 55): If a seller engages in deceptive conduct — including misrepresenting ingredients, origin, or certification status — the consumer is entitled to compensation of three times the purchase price, with a minimum of RMB 500.
• Punitive damages for physical harm: Knowingly selling defective products that cause death or serious injury can trigger punitive damages of up to two times the actual loss.

For CBEC sellers specifically, Article 17 of the E-Commerce Law further prohibits deleting negative reviews, manipulating star ratings, or displaying false sales volumes. Platforms are required to maintain the integrity of user review systems and can suspend stores found to be gaming these metrics.

Data Privacy Compliance — PIPL, DSL, and Cross-Border Data Transfers

Selling in China means collecting personal data from Chinese consumers — at minimum, names, shipping addresses, and payment details. For CBEC operators, this data often flows back to servers outside of China for order processing and CRM purposes. China’s data privacy framework governs all of this, and the penalties for getting it wrong are among the harshest in the world.

China now has three interlocking data laws that every foreign seller must understand. They are not alternatives — all three can apply simultaneously.

What PIPL Requires from Foreign Sellers

The Personal Information Protection Law (PIPL, effective 1 November 2021) is China’s primary data privacy statute, comparable in scope to the EU’s GDPR. Its key requirements for foreign businesses include:

• Lawful basis for processing (Article 13): Personal data can only be collected with the individual’s informed, specific, and voluntary consent, or under a limited set of alternative lawful bases (contract necessity, legal obligation, etc.).
• Purpose limitation: Data collected for one purpose (e.g., order fulfillment) cannot be repurposed without fresh consent.
• Data minimization: Only data strictly necessary for the stated purpose may be collected.
• Chinese-language privacy policy: A compliant privacy notice must be provided in Chinese, clearly explaining what data is collected, how it is used, and how consumers can exercise their rights.
• Extra-territorial application (Article 3): PIPL applies to any organization outside China that processes the personal information of individuals inside China — even if the organization has no Chinese entity.

This means that even a purely CBEC operator with no physical presence in China is subject to PIPL if it processes orders from Chinese consumers.

Cross-Border Data Transfer Mechanisms

Under PIPL Article 38, transferring personal data collected in China to servers outside of China requires one of three legal mechanisms:

1. Security Assessment by the Cyberspace Administration of China (CAC): Mandatory for large-volume transfers (currently triggered at 1 million individuals’ data cumulatively, or 100,000 individuals’ data in a single year for sensitive data).
2. Standard Contract (个人信息出境标准合同): For smaller-volume transfers. The CAC published the standard contract template in June 2023. Filing with the CAC is required after signing.
3. Certification by an Accredited Body: An alternative to the standard contract, particularly suited for intra-group transfers within multinational companies.

The Data Security Law (DSL, effective 1 September 2021) adds an additional layer: it establishes a national data classification system under which certain commercial data — including trade statistics, supply chain data, and bulk consumer data — may be designated “important data,” triggering stricter transfer controls and mandatory security assessments.

The Cybersecurity Law (effective 1 June 2017), Article 37 further requires operators of critical information infrastructure to store data locally and pass a security assessment before any outbound transfer. Most CBEC operators will not be classified as critical information infrastructure operators, but any seller operating large-scale platforms or data-intensive services in China should confirm this with legal counsel.

Penalties for Non-Compliance

The PIPL imposes the most severe data penalties in China’s legal system. Under Article 66, violations can result in:

• Fines of up to RMB 50 million, or 5% of the previous year’s annual turnover — whichever is higher.
• Suspension or termination of business activities.
• Personal liability for senior management, including fines of up to RMB 1 million and bans from serving as a director or officer.^[5]

For foreign businesses, an additional risk is platform-level enforcement: Chinese platforms routinely audit merchant data practices and can suspend stores that lack a compliant Chinese privacy policy or that collect data beyond what is disclosed.

For further reading on data compliance in the context of IP and trade secrets, see: Trade Secret Protection: What Foreign Firms Must Know and How NDAs Protect Your IP in China.

Tax, VAT, and Customs Duties

Tax compliance is a dimension that foreign sellers often underestimate — particularly those entering through CBEC, where the simplified tax regime creates a false impression that tax obligations are minimal. In reality, tax requirements are tied directly to your market entry mode and can significantly affect your pricing strategy, profit margins, and long-term operational structure.

CBEC Tax Rates vs. General Trade

The tax treatment of CBEC retail imports is governed by Circular Cai Guan Shui [2018] No. 49 and its annual extensions. The key concessions are:

• Import tariff: 0% — CBEC retail imports within personal purchase limits are exempt from import tariffs entirely.
• VAT: levied at 70% of the statutory rate — for goods attracting the standard 13% VAT rate, the effective CBEC rate is 9.1%. For goods attracting the lower 9% rate, the effective rate is 6.3%.
• Consumption tax: levied at 70% of the statutory rate — relevant for cosmetics, alcohol, tobacco, and luxury goods, which attract consumption tax under the Provisional Regulations on Consumption Tax.

For general trade imports — the channel used by WFOE-based sellers importing goods for domestic sale — the full tariff rate applies, alongside the full 13% VAT and any applicable consumption tax. For premium categories, this can add 30–50% to the landed cost of goods compared to the CBEC channel.

This tax differential is one of the primary reasons many foreign brands initially enter China via CBEC rather than establishing a local entity. However, as sales volumes grow, the personal purchase limits (RMB 26,000 per person annually) begin to constrain scale, making a transition to general trade or a hybrid model necessary.

VAT Registration and E-Invoicing Obligations

For businesses operating through a Chinese entity, VAT registration is mandatory. China operates a VAT invoice (增值税发票, fāpiào) system that is central to the entire tax compliance framework:

• E-Commerce Law, Article 14: E-commerce operators must issue electronic invoices (电子发票) to consumers upon request. Failure to issue invoices is a standalone compliance violation.
• E-Commerce Law, Article 11: All e-commerce operators must pay taxes in accordance with Chinese tax law and may be required to file periodic tax returns with their local tax bureau.
• Transfer pricing (Law on Enterprise Income Tax, Article 41): If you operate a WFOE and engage in cross-border transactions with your overseas parent or affiliates, all related-party transactions must comply with the arm’s length principle. China’s tax authorities actively audit transfer pricing arrangements, particularly for intra-group licensing, service fees, and procurement transactions.

Foreign businesses operating through a WFOE should ensure they have a VAT general taxpayer status (一般纳税人) if annual taxable revenue exceeds RMB 5 million, as this status is required to issue VAT special invoices — which your B2B customers in China will require for their own input VAT deductions.

Penalties for Non-Compliance — Summary Table

Understanding where the financial exposure lies is essential for prioritizing your compliance investment. The table below consolidates the key penalties under Chinese e-commerce, product safety, advertising, and data privacy law. These are not theoretical maximums — they are regularly applied by Chinese regulators and market supervisory authorities.

The pattern across these penalties is consistent: first-time violations result in fines; repeat or serious violations can result in business closure and criminal prosecution. China’s enforcement agencies — including the State Administration for Market Regulation (SAMR), the Cyberspace Administration of China (CAC), and local market supervision bureaus — have significantly expanded their enforcement capacity in recent years, particularly for online platforms and cross-border commerce.

YCIP’s Practical Compliance Checklist for Foreign Sellers

The following checklist is designed as a practical starting point for foreign businesses preparing to enter the Chinese market — or auditing their existing operations for compliance gaps. It covers the key legal obligations across all major regulatory areas discussed in this guide.

This is not a substitute for legal advice. Your specific compliance requirements will depend on your product category, sales channel, business structure, and target consumer base. Contact YCIP for a tailored compliance assessment.

Market Entry and Registration

• ☐ Determine market entry mode: CBEC or local entity (WFOE/JV)
• ☐ If local entity: complete WFOE/JV registration with SAMR and obtain business licence
• ☐ If domestic online presence: obtain ICP filing (informational) or ICP licence (commercial)
• ☐ Register with the relevant platform as an overseas or domestic merchant

Intellectual Property

• ☐ File Chinese trademark application with CNIPA — ideally before market entry is announced (see: YCIP Trademark Registration Guide)
• ☐ File in the correct classes — include Class 35 (retail services) alongside primary product class
• ☐ Consider recording trademark with China Customs once registration is granted
• ☐ Conduct a Chinese trademark availability search before finalizing brand name (see: China Trademark Search Guide 2025)
• ☐ Monitor for trademark squatting and third-party filings via CNIPA watch service

Product and Labeling Compliance

• ☐ Identify whether product falls within CCC certification categories
• ☐ Confirm product compliance with applicable GB national standards
• ☐ For general trade: prepare and file Chinese-language labels with CIQ before import
• ☐ For CBEC: ensure Chinese-language product information is complete and accurate on platform listings
• ☐ For food, cosmetics, health products: review category-specific regulations for additional requirements

Advertising and Consumer Compliance

• ☐ Review all marketing materials for prohibited superlative language
• ☐ Ensure KOL and live-stream partnerships include mandatory advertising disclosure labels
• ☐ Implement a 7-day unconditional return policy for online sales
• ☐ Do not delete or manipulate consumer reviews on platforms

Data Privacy

• ☐ Draft a compliant Chinese-language privacy policy covering PIPL requirements
• ☐ Implement a cross-border data transfer mechanism (standard contract or security assessment)
• ☐ Ensure consumer consent is informed, specific, and recorded
• ☐ Appoint a data protection contact or responsible person in China

Tax and Customs

• ☐ Confirm applicable tax rates for your product under CBEC or general trade rules
• ☐ For local entity: register as VAT general taxpayer if annual revenue exceeds RMB 5 million
• ☐ Implement e-invoicing capability for consumer and B2B sales
• ☐ Review transfer pricing arrangements if operating cross-border related-party transactions

Frequently Asked Questions

Do I need a Chinese business licence to sell online in China?

Yes, if you are setting up a domestic online store on platforms like Taobao, JD.com, or Douyin Shop China, you must have a registered Chinese market entity and a business licence under E-Commerce Law, Article 10. However, if you sell through cross-border e-commerce platforms such as Tmall Global or JD Worldwide, you are exempt from having a local business licence. Instead, you register as an overseas merchant using your home country’s incorporation documents.

Can a foreign company sell directly to Chinese consumers without a local partner?

Yes — via the CBEC retail import model. Your overseas company ships goods either from a bonded warehouse in China or directly by international mail. No local partner or entity is required. However, you must establish an after-sales service contact in China, comply with personal-use import limits (RMB 26,000 per year per consumer), and ensure your products appear on the CBEC Positive List. For general trade through domestic distributors or physical retail, a local partner or WFOE is necessary.

What are the labeling requirements for imported products in China?

For general trade imports, every product must carry a Chinese label before customs clearance. Required information includes product name, ingredients, net content, country of origin, the Chinese importer’s name and address, production date, shelf life, and the applicable national standard code — per Product Quality Law, Article 27. CBEC imports are currently exempt from the physical label requirement, but must provide accessible Chinese-language product information through the platform listing.

What is an ICP filing and is it mandatory for a foreign seller’s website?

An ICP filing is a government registration required for any website hosted on a mainland China server targeting Chinese users. Informational sites need an ICP filing (备案); commercial e-commerce sites need a full ICP licence (增值电信业务经营许可证) under the Telecommunications Regulations of the PRC, Article 7. Purely overseas-hosted websites not targeting China are generally exempt. CBEC sellers operating within licensed platforms do not need their own ICP filing — the platform’s licence covers the store.

Is it necessary to have a registered trademark in China before selling?

Not legally mandatory to begin selling, but practically essential. Without a Chinese trademark registration, you cannot record your brand with China Customs to stop counterfeits, you may be blocked from opening a branded store on Tmall or JD, and you are highly vulnerable to trademark squatting. China’s first-to-file system means a third party can register your mark and legally prevent you from selling under your own brand name — even if you have used it internationally for years. See: What to Do If Your Brand Name Is Already Trademarked in China.

What are the penalties for false advertising or using superlative words in China?

Under Advertising Law, Article 57, using absolute superlatives such as “the best,” “No. 1,” or “state-level” in product advertising results in a fine of RMB 200,000 to RMB 1,000,000. In severe or repeat cases, the business licence can be revoked. The E-Commerce Law also empowers platforms to remove listings and impose store closures for non-compliant advertising content.

What personal data obligations apply to CBEC sellers with no Chinese entity?

Even without a Chinese entity, CBEC sellers processing orders from Chinese consumers are subject to the Personal Information Protection Law (PIPL), Article 3, which applies extra-territorially. You must obtain informed consent for data collection, provide a Chinese-language privacy policy, and establish a lawful mechanism for any cross-border data transfer — typically a standard contract filed with the CAC. Non-compliance can result in fines of up to RMB 50 million or 5% of annual turnover.

Conclusion: Start Compliant, Stay Protected

China’s legal framework for foreign sellers is detailed, multi-layered, and actively enforced. But it is not impenetrable. The businesses that succeed in China long-term are those that treat compliance not as a one-time hurdle but as an ongoing operational discipline — beginning before they enter the market, not after a problem arises.

The most important steps to take before you sell a single product in China are clear: choose the right market entry structure, secure your trademark through CNIPA before a bad-faith filer does it first, understand your product’s certification and labeling obligations, and build your data privacy framework from day one. Every other compliance obligation flows from these foundations.

Penalties in China are not symbolic. Fines reach into the millions of RMB, platforms delist products overnight, and customs can seize entire shipments. The cost of getting it right upfront is always less than the cost of fixing it later.

Yucheng IP Law (YCIP) is a China-based intellectual property law firm with deep expertise in trademark registration, IP enforcement, licensing, and compliance strategy for foreign businesses entering the Chinese market. Our team has filed thousands of trademarks, supported IP litigation across multiple jurisdictions, and helped international brands build durable legal foundations for their China operations.

Whether you are just starting out or conducting a full compliance audit of your existing operations, our team is ready to help. Contact YCIP today for a consultation, or submit a trademark application quote request to get started on your IP protection immediately.

You can also explore our full range of China IP services:

• Trademark & Copyright Services
• Patent & Design Protection
• Licensing & Transaction Services
• Consultation & Litigation Support

External References and Further Reading

• China National Intellectual Property Administration (CNIPA) — Official Portal — Trademark search, filing status, and examination guidelines.
• Ministry of Commerce of the PRC (MOFCOM) — Cross-border e-commerce policy, investment guidance, and negative list updates.
• General Administration of Customs of China (GACC) — CBEC import rules, customs recordal for IP rights, and tariff schedules.
• Cyberspace Administration of China (CAC) — PIPL compliance guidance, standard contract templates, and cross-border data transfer requirements.
• State Administration for Market Regulation (SAMR) — Business registration, advertising enforcement, and consumer protection rules.
• Ministry of Industry and Information Technology (MIIT) — ICP filing and licence requirements for commercial websites in China.

Citations

1. [1] China Cross-Border E-Commerce Import & Export Statistics (2022–2026), General Administration of Customs of China (GACC) and MOFCOM Projection. https://www.customs.gov.cn/. Source Role: Official government statistical authority. Support Status: Supports. Relevance: Provides market size benchmarks for CBEC import/export volume used in the introduction and Section 4.
2. [2] Regulation on Compulsory Product Certification and Certification & Accreditation Regulations, Article 67, State Administration for Market Regulation (SAMR). https://www.samr.gov.cn/. Source Role: Primary legal authority. Support Status: Supports. Relevance: Establishes CCC certification requirements and penalty ranges for non-compliance in Section 3.
3. [3] General Administration of Customs Order No. 249 (2021), Import Food Label Filing Requirements, GACC. https://www.customs.gov.cn/. Source Role: Primary regulatory authority. Support Status: Supports. Relevance: Mandates Chinese label filing with CIQ at port of entry for general trade imports, referenced in Section 3.
4. [4] Administrative Measures for Internet Advertising (effective 1 May 2023) and 2023 National Advertising Law Enforcement Report, State Administration for Market Regulation (SAMR). https://www.samr.gov.cn/. Source Role: Regulatory enforcement data. Support Status: Supports. Relevance: Supports penalty statistics cited in Section 5 and establishes KOL/livestream disclosure obligations.
5. [5] Personal Information Protection Law of the PRC (PIPL), Article 66, effective 1 November 2021, National People’s Congress. http://www.npc.gov.cn/. Source Role: Primary legislation. Support Status: Supports. Relevance: Establishes maximum penalties for PIPL violations, including the RMB 50 million / 5% turnover threshold cited in Sections 6 and 8.

Disclaimer: This article is intended for general informational purposes only and does not constitute legal advice. The laws and regulations referenced are subject to amendment, and their application will vary depending on the specific facts and circumstances of each case. Foreign businesses should consult qualified Chinese legal counsel before making compliance decisions. Yucheng IP Law (YCIP) accepts no liability for actions taken or not taken based on the content of this article. For legal advice specific to your situation, please contact our team directly.