ICP license in China is a topic that can be problematic for many companies to understand.
China has a huge potential of millions of consumers constantly consuming content online or buying products on e-commerce platforms.
To be successful in China, having a website based in China is often the best option to attract consumers, showing your brand or products.
But if you want to have a website in China, you should consider if the ICP license is a viable option for your business.
In this article, we will show you the meaning of an ICP license in China and the requirements to have one.
What is the ICP license in China?
ICP stands for Internet Content Provider. The Chinese government regulates companies that run paid information, online advertising, webpage creation, e-commerce, and other online services through such licenses.
According to Order No. 291 of the State Council of the People’s Republic of China, “Regulations of the People’s Republic of China on Telecommunications”, and No. 292 “Administrative Measures for Internet Information Services”, both business-related providers and non-business providers are required to follow these regulations, or given an order for correction within a time limit, with profits confiscated and a fine of ¥100,000 to ¥1 million. And, of course, the website will be shut down.
Is an ICP license necessary for your company?
If a company is willing to host a website in China, so it is inevitable to at least file the domain. Besides, the sites are less likely to be blocked by the Great Firewall of China, or neglected by search engines like Baidu.
For those who haven’t learned it yet, ICP is one abbreviation that could be used to refer to either of the following 2 things:
- ICP licensing
- ICP filing
ICP licensing, as its name suggests, involves the bureau issuing to a company or a person a paper-based license while ICP filing does not. This depends on whether your website is business-related by the government’s definition.
Let’s take Alipay and Apple as examples.
Alipay, a smartphone-based payment service on Alibaba’s e-commerce platforms, runs the business on its website. This is why it has its license displayed at the bottom of the site as “ICP证：沪B2-20150087”. The Chinese character “证” means “license”, and “沪” means Shanghai, the city where the government issued the license.
Apple, the world’s most valuable listed company which makes a fifth of its profits in China, sells hardware in China. All content on its official website is free and everything is just a display of its products and services. Even when you try to buy an iPhone on it, your browser will be directed to a transaction page run by Alipay. That saves Apple the effort to apply for a license. “京ICP备10214630” is the number of its ICP filing found on its website. “备“ is the Chinese character for filing (or filing-for-record, or recordal), and “京” for Beijing.
Again, if you only have a pure display of your services on your website, like Apple, TikTok, Tencent for example, you need a filing and no license is required.
Which kind of services needs a license?
More examples of services that ask for a license are listed below:
- Paid information, in the form of music, videos, and books;
- Information publishing and delivery platforms, such as application stores; recruitment websites; software download platforms;
- Search engines, such as Baidu, Bing, etc;
- Social media platforms, such as WeChat, QQ, etc;
- Computer security software, such as 360, Rising Antivirus, Kaspersky, etc.
If it’s still too hard to understand, a way to see if you need a filing and a license are to ask the question if your business model is still feasible without the website. If not, filing and/or license are both required.
Do apps in China need the ICP license?
Most likely, yes. Unless, of course, your app is practically the same as a purely informational website, which in such case, a filing is enough.
Requirements to get the ICP license in China
Unfortunately, the cake is preserved for domestic companies. A wholly foreign-owned enterprise (WFOE) cannot apply for it. But a joint venture (JV) with foreign stakes of no more than 49% can apply. The process will be rough. Companies with a strong background might consider going through the protracted battle. Otherwise, establishing a purely domestic company, or buy out one with an ICP certificate could be more practical.
For an applicant, the minimum subscribed capital for a cross-province business is RMB 10 million, and the minimum subscribed capital for business within a province is RMB 1 million.
The company, its main investors, and main management personnel should have no illegal records of violating the Telecommunications Supervision and Management System within three years.
Documents to be prepared for a JV’s CIP application:
- Foreign investment review opinions;
- Foreign shareholders provide proof of three years of relevant experience in the telecommunications business;
- Scanned copies of the legal representative’s passport, the shareholders’ passport, and the articles of association;
- A scanned copy of the original domain name certificate;
- Scanned copy of the original website access protocol;
- A scanned copy of the original server hosting provider’s qualification paper.
Time and costs to get an ICP license
The bureaus are required to issue the filing number or a note of disapproval within 20 days after application, and the license within 60 days or 180 days, depending on the details of the ICP license you are applying for.
The bureau charges none. But considering the complexity, many companies hire an agency, Aliyun being one of the biggest agencies, which brings up a cost of RMB 1500/year or more.
Getting an ICP license can be a complicated process and you have to analyze deeply the requirements to get it and if you really need it.
But please remember that whilst we are doing our best to help you understand the ICP affairs, this post is solely for informative purposes and shouldn’t be taken as legal advice. Above all, the processes and requirements are supposed to vary slightly among different provinces.
Contact us if you need more information about the ICP license, company formation in China, tax, and accounting!