The business licence is one of the most fundamental documents for any company operating in China, required by every entity from local businesses to Joint Ventures and Wholly Foreign-Owned Enterprises (WFOEs).
This guide explains what the Chinese business licence contains, why it matters for foreign businesses and how to use it effectively, whether verifying a potential partner or managing your own entity’s compliance.
- Key details on the licence include company name, type, legal representative, business scope, registered capital, QR code, incorporation date and registered address.
- Under the 2024 Company Law, registered capital declared on the licence must be fully contributed within five years of incorporation.
- While the specific information accessible through the QR code varies by region, it can reveal details like past audits and potential blacklisting, which is crucial for assessing a company’s trustworthiness.
- A business licence helps verify information provided by a company and identify potential discrepancies, such as mismatched names or a business scope that does not cover the activity being conducted.
What is a Chinese business licence?
The Chinese business licence is a formal authorisation issued by the Chinese government, confirming that a company is legally registered and permitted to engage in commercial activities within mainland China. It is issued by the State Administration for Market Regulation (SAMR) or its local counterparts upon successful company registration.
Every company operating in China holds one, from domestic enterprises to Joint Ventures (JVs) and WFOEs. The licence is the foundational document of a company’s legal existence in China and is required for opening bank accounts, engaging with government agencies, entering into contracts and conducting transactions with other businesses. Requesting a copy before commencing any business relationship is standard practice.
Types of Chinese business licences
Chinese business licences are issued in two forms: a physical document and a digital equivalent. Both carry the same legal validity, though the digital licence is increasingly the more practical option for day-to-day use.
Physical licence
The physical business licence is an A3-format document displayed at the company’s registered premises. It carries the company seal and contains all core registration details. While it remains the official record, many administrative processes now accept the digital alternative.
Digital licence
China’s National Unified Electronic Business License System allows companies to access and share a digital version of their business licence. It can be used for e-signature processes and official filings and is increasingly accepted across government agencies, financial institutions and business counterparties, reducing the need to present or courier physical copies. Companies can access their digital licence through the SAMR online platforms.
Key details on the Chinese business licence
The business licence is issued primarily in Chinese. The following explains each field in the order it typically appears on the licence.
Unified social credit code (统一社会信用代码)
A unique 18-digit national business registration number issued to all businesses and entities in China. It integrates the company’s registration number, organisation code and tax identification number into a single identifier, confirming the company is legally registered with the Chinese government.
Company name (名称)
Typically composed of location, name and business field.
Company type (类型)
The legal entity type, such as a limited liability company or joint stock limited company.
Legal representative (法定代表人)
The individual with primary authorisation within the company and is legally responsible for key matters such as company seals, bank accounts and other licences.
Business scope (经营范围)
Defines all the commercial activities the company is permitted to carry out. Engaging in any activity outside this scope may result in fines and requires formal amendment if the business changes.
QR code
Links to the company’s registration record on the government database, which may include audit history, penalties and blacklist status depending on the region.
Registered capital (注册资本)
Reflects the amount shareholders have committed to contribute to the company, expressed in RMB or freely convertible currencies. While no statutory minimum for most business types, the declared amount must be fully contributed within five years of incorporation under the 2024 Company Law.
Incorporation date (成立日期)
The date the company was formally established.
Term of operation (营业期限)
The legal duration of the company, either fixed-term or long-term.
Registered address (地址)
The official business address, which reflects the company’s main operating location and is to be updated if it changes.
How to obtain and update a Chinese business licence
A business licence is issued automatically upon successful company registration with SAMR or its local counterpart. The process involves submitting the required incorporation documents, including the company’s Articles of Association, shareholder information and registered address, either through the SAMR online system or in person at the relevant local authority.
For WFOEs and JVs, additional documentation from foreign investors is required. Registration typically takes between four and eight weeks depending on the entity type, location and completeness of submitted documents.
Updating the business licence
The business licence is updated whenever a change is made to any of the registered details it contains. Common triggers include a change of legal representative, registered address, business scope, registered capital amount, company name, term of operation or shareholding structure. Updates are filed with SAMR and the licence is reissued to reflect the new information. Operating with outdated licence details can result in administrative penalties, so changes should be filed promptly.
How to use a Chinese business licence
Requesting a business licence for a company in China before commencing business operations is standard practice. The licence verifies whether the information provided by a company matches the official registration details and identifies discrepancies early. Common issues to look out for include:
Company name mismatch
If the name on the licence differs from what appears on an import licence, bank account or contract, this raises a serious red flag.
Business scope gap
If a company claims it can perform an activity such as exporting a specific product but this is not listed in its business scope, it is not legally permitted to do so.
Address inconsistency
If the registered address differs from the company’s actual operating location, it is worth investigating the relationship between the entities and requesting the licence for the other location.
Legal representative discrepancy
If the person signing contracts is not the named legal representative, the contract may be invalid, as only the authorised legal representative is permitted to sign official documents.
Low registered capital
A very low registered capital relative to the scale of proposed transactions may indicate insufficient financial capacity to fulfil obligations.
Using the Chinese business licence for due diligence
Beyond checking for discrepancies, the business licence is a practical starting point for due diligence on any Chinese company. Scanning the QR code gives access to the company’s official registration record, which can reveal administrative penalties, failed audits or blacklist status that may not surface in direct communications.
Cross-referencing the USCC against SAMR’s national enterprise information platform allows you to verify registration status, shareholder structure and any recorded violations. For higher-value relationships, the licence should be used alongside a formal background check rather than as a standalone verification tool.
Conclusion
The Chinese business licence is the foundational document of any company’s legal existence in China. It confirms registration status, defines the permitted scope of operations and carries details essential for assessing a company’s legitimacy and financial standing. For foreign businesses, understanding how to read, obtain and use the licence and recognising when it needs to be updated reduces compliance risk and supports more informed commercial decisions.
How Acclime can help with securing the Chinese business licence
Acclime is dedicated to assisting foreign businesses in securing the necessary licenses for their operations in China. Our services cover the full registration process, from preparing documentation and liaising with government agencies to guiding you through any required updates or amendments as your business evolves. Contact us to find out how we can support your entry and ongoing operations in China.
Contact our teams for expert support and further information about corporate governance in China to ensure you are compliant in the market.
Maxime Van ‘t Klooster, Partner, m.vantklooster@acclime.com
Celia Cui, Manager of CoSec Services, c.cui@acclime.com
Christophe Marquis, Director, Shanghai, c.marquis@acclime.com
