Launching Software As A Service (SaaS) In China

Check out our article: The 6 Keys to SaaS Success In China

Like most of its online activity, China regulates its online environment more strictly than the rest of the world. To even create a company website, you need licensing, registration, and authorization from the government. So setting up a web-based Software as a Service (SaaS) product, or a Platform as a Service (PaaS) is possible for a foreign company but requires some assistance, additional steps and considerations:

Legal Compliance

Like all online enterprises in China, there is a sea of constantly evolving laws regulating the online space. Our account managers at AppInChina stay abreast of the legal landscape and assist our clients with changes as soon as they are issued. Here are the most basic requirements for most SaaS enterprises in Mainland China:

Licensing for SaaS in China

There are two Internet Content Provider (ICP) licenses you will first need to acquire to establish your SaaS:

ICP Beian (ICP备案) – This is the standard ICP license required to host a website in China. It is issued by the Chinese Ministry of Industry and Information Technology and is administered at the provincial level. For sites that are purely informational and not involved in selling goods or services, this is the only ICP required. The numbers follow the format 京ICP备12345678号 

ICP Commercial – This ICP license gives its holder the legal ability to accept payments online, which will include your SaaS enterprise. These numbers follow the format 京ICP证12345678号 .

Websites that do not have an ICP record may be blocked in Mainland China. You can see the ICP license numbers for any Chinese website at the bottom of the front webpage, where they are required to be displayed: 

I need an ICP Beian (ICP Filing) for China. How can I get one?

Your website does not need to go live prior to applying for the license, but you will need to first obtain a local hosting provider, to whom you will submit the required documentation (these can vary from province to province):

• Certificate of the person making the application (generally the individual’s Chinese ID card)
• Certificate of the website administrator
• Certificate of the organization (business license or other such documents to verify the business if applying on behalf of an organization)
• Photo of yourself holding the required documents
• Letter of authorization
• Residence Permit
• Domain name holder certificate 
• Domain name confirmation (Beijing)
• Commitment letter and website construction plan (Guangdong)
• Certificate of Authorization (Yunnan, Inner Mongolia, Heilongjiang, Jiangxi)

LINK: Filing Requirements for Different Regions

If the documents are approved, they are then forwarded to the Ministry of Industry and Information Technology for further review. Applicants who are rejected for any reason will be contacted and asked to submit additional information. Assuming all documentation is in order, it takes an average of 20 business days for a company to finally receive its ICP Beian.

The ICP system follows a “one account, one owner” rule. This means that if you own multiple websites, you can file for all of them from a single account, as long as you are the listed owner listed for all the domain names you will register. For sites with different owners, you’ll need one account per owner.

All steps can be completed online, but you will need the assistance of a Chinese speaker, as no English forms are available.

Who can get an ICP license?

• Chinese-owned businesses with a Chinese business license.
• Partially or wholly foreign-owned (WOFE) businesses with any type of Chinese business license. For Sino-foreign joint ventures, the proportion of foreign investment cannot exceed 49%, and you will only be able to receive an ICP Beian – not a commercial ICP. Also, foreign companies need to apply for a “Foreign (Regional) Enterprises Resident Representative Registration Certificate” (外国（地区）企业常驻机构代表登记证) before filing.
• Chinese nationals can receive an Individual ICP (个人备案) using their state-issued ID.
• Non-Chinese individuals who are physically present in China long enough to fulfill some basic registration requirements can apply for an Individual ICP with their passport.

It is important to understand that foreign companies are not eligible to receive either ICP license. It is not enough to have an office in China: You must be a registered Chinese business. 

So how can a foreign company do eCommerce in China? Foreign entities usually partner with Chinese internet companies to use the licenses of the Chinese company.

This is where AppInChina can help. As a Wholly Foreign Owned Entity (WFOE), we are a Chinese company that can apply for these licenses on behalf of our clients. This is part of our range of services that ensures you can operate worry-free in China, knowing that you are in full legal compliance with all Chinese laws.

Your company will simply sign a partnership agreement with us and we will help run your SaaS platform for you. When you sign up for AppInChina’s services, you always retain the right to your own content and complete control of your own operations, while at the same time taking advantage of our company status and many years of expertise in the Chinese market.

How Can I Host My SaaS platform in China?

In addition to the ICP licenses, AppInChina will also assist you with:

Creating a Chinese domain name. This will be required to apply for the various licenses and must undergo real name verification of the owner. Chinese domain names end in .cn. You can choose a name that is similar to your own current domain, such as myservice.com.cn, or myservice.cn.

Hosting your site in China. All hosts will require your ICP license numbers before releasing server credentials to you. Chinese law states that data acquired in China must stay within its borders. This would naturally include email addresses, physical addresses, passwords, preferences, and other personal data that are necessary to operate your SaaS. So your site and databases must be hosted on servers that physically reside in China. Moving the data across borders for any reason requires your company to apply for specific permission to do so.

Additionally, because outside traffic must pass through The Great Firewall before making it to a device in China, locally-hosted sites almost always load more quickly and operate more efficiently, providing for a much better experience for your users.

Link: How to Integrate A Chinese Cloud Service

How to ensure that my SaaS will be collecting information legally and protected in case of a security breach?

As stated in Article 21 of the 2017 Cybersecurity Law of the People’s Republic of China, we recommend that you follow the MLPS certification process “to ensure that the network is free from interference, disruption or unauthorized access, and prevent network data from being disclosed, stolen or tampered”

The AppInChina Advantage

AppInChina has a full China-side hosting solution to make it easy and affordable for your company to remain legally compliant and provide the best experience possible for your customers. Send us a message or sign up for a free account on our client dashboard to get more information.