How to Launch An App and Software in Mainland China
We have received many inquiries about launching apps and software in mainland China.
The valuation of Taobao, Douyin, and similar TMT apps was simply mind-blowing, thus many oversea companies, especially fintech startups, e-commerce platforms and even dating apps, start to consider the possibility to be the next Billion Dollar company by launching an app in mainland China.
1. The Truth
Launching App and Software in China Is A Daring Game Only For Deep-Pocket and Sincere Players.
The rules for market entry are simple: NO MONEY NO TALK.
IF YOU HAVE MONEY, LET’S TALK.
BUT IN CHINA, MONEY DOES NOT GUARANTEE 100% SUCCESSFUL MARKET ENTRY.
THERE ARE RULES AND REGULATIONS TO FOLLOW.
This article is not for faint-hearted ones, or startups with only US$ 200K to spend.
China market is not your gaming spot, please choose other places or get good investors to back up your ambitious plan.
If you are an entrepreneur with a deep pocket, at least US$ 20M to burn for the first 2 years, or the CEO of big corporates, please continue to read.
If you are still reading, the 1.4 billion people market might be yours.
THE DOOR IS ALWAYS OPEN FOR THE WILLING ONES.
2. Comply With Local Rules and Regulations
Don’t try to be smart by deviating from local rules and regulations.
It will only cost you more instead of saving money.
People might be able to download your app in China, but you will never receive the payment without fulfilling local regulations.
And yes, people who crack the code and launch your app in China might make money themselves without sharing a penny with you….
Don’t accuse them of plagiarism or keeping the money for themselves.
If your business and app do not have proper business licenses and software registration in China, how to prove that the copyright is yours?
And why the local law enforcement should protect your interest if you have not even registered yourself to show who you are?
Let’s Be Realistic!
Complying with rules is simple: Submit Documents To Get Approval.
But the question is: What Documents To Submit and What Are the Requirements?
3. Business License
The Chinese language is one of the most difficult languages in the world to comprehend, and it is not uncommon to hear ”where can I find the rules and regulations?”
Don’t worry, let’s get there step by step with a clear mind and cool head.
RULE NO.1: Be Clear About Your Business Model
What business are you going to do in China, with the app?
In another word, what are you going to sell to make money?
Cosmetics?
Food and beverage?
Providing legal consultation service?
Selling music?
RULE No.2: Apply For Licenses Based On Your Business Scope
Make sure to select the RIGHT BUSINESS and put it on the company registration certificate.
i.e. If you are selling packaged food through the app, make sure to select “Selling Packaged Food” as the business scope.
If you do not register as Food Seller, you cannot sell food.
If you are selling food + cosmetics through the app, remember to add “Selling Cosmetics” on the Business Registration as well.
Certain business needs pre-approval from the government before you can register it as a business, such as selling medical devices.
4. Types of License For Apps & Software in China
After clarifying your business scope, let’s look at the certificates and licenses required for launching apps and software in China.
Any app or software developed by yourself for your own use, does not need registration in China.
Any app or software that is developed for other people to use in China, needs registration.
The registration involves two (2) papers (certificates):
Software Copyright Registration (to clarify the ownership of the software)
Software Registration Certificate (for market circulation identification, only with this certificate can you sell this app and software as a product or service for profit).
After getting these two certificates, your app obtains its “birth certificate” in China.
5. What About ICP and EDI?
You probably have heard of ICP and EDI when you mention that you want to do e-commerce in China.
So, what are ICP and EDI?
ICP stands for Internet Content Provider.
EDI stands for Electronic Data Interchange.
As the name indicates, if you have a website or app which shows your business online to the Chinese audience to introduce your business for profit, then you will need an ICP license.
If your website shows business information as well as “enabling transactions online”, just like Amazon.com or taobao.com which enables sellers to list products and buyers to purchase online, and your website or software processes data to match the deal, then this processing activity falls under “Electronic Data Interchange”, then you will need an EDI license.
To launch an app or software for profit in China, you need at least the following licenses to get started:
China Company Registration Certificate
China Business License
China Software Copyright Certificate
China Software Registration Certificate
ICP/EDI
Whether you need both ICP and EDI or only one of the two licenses depends on the function of your software and how you want to show your business to potential customers.
For example, if your business does not have a website in China, and only has software, that users can purchase offline in the form of a disk in a shop and install on their computer, then you might not need an ICP license.
However, if you have a website and you want to use Baidu SEO for marketing so that people can find you by searching online, then it is a must for your company to apply for ICP since you are using the Internet by providing Content to the audience.
6. ICP License Is Not For Everybody
Joint Venture (JV) where Foreign Investment is ≤ 49% and China Investment is≥ 51% is eligible to apply for ICP.
Wholly Foreign-Owned Enterprise (WFOE) is not eligible for ICP application.
Want to launch your app and software in China?
Talk to us or purchase the guidebook here.