A couple emails between one of my firm’s clients and one of my firm’s China lawyers just landed in my in box. The email from the client asked the following:
Do I need to have a business license to sell our products in China? Someone recently told me that we do, but I was under the impression that we do not. Could you clarify for me?
Our China lawyer answered as follows:
With respect to your question about the business license, it depends on what you mean by “sell in China.” A Chinese business license is for companies that are resident in China. If you open up a retail store in China and sell goods, you will need a business license. If you are simply shipping product to a third party in China, you do not need a business license.
I deem these emails to be “blog-worthy” both because we are often asked this question and because there are a number of people out there claiming that one must have a business license to sell product or services into China. As you might expect, a number of those who say that a license is necessary follow that up by telling you what they will charge to get you one, which basically requires that you form an entity in China (like a WFOE) to be able to get the license.
I have seen too many American and European companies form a company to do something in China that they could have done from America or from Europe without the need for a China entity at all. There will oftentimes be marketing benefits from having a WFOE in China, but a WFOE is not always necessary.
Just thought that you should know.