What is a business license?
A business license is the operating permit of a limited liability company in China. It is comparable to a corporation certificate or company certificate issued by the company registry in most countries.
A China business license is often also referred to as a 3-in-1-license or 5-in-1-license, which refer to one and the same thing.
The business license includes a business scope, which is one of the most important elements of a company’s business license, as it determines what business activities the company may engage in. The business scope is subject to approval by the relevant local or municipal authorities, including the Authority for Market Regulation (AMR) and, for some industries, the Commission of Commerce (COC). A company may only operate according to its business scope, while violations can be severely punished.
As China applies a negative list, not all activities are permitted for foreign investors. So-called foreign investment restricted industries include aviation, education, natural resources, automotive, law, and several other industries that are vital to China.
Some activities may be approved in the business scope, but still require obtaining special licenses, after the business license is issued.