What Is China’s IRCS License and Who Needs One?

As China’s cloud services sector rapidly evolves, compliance with local telecommunications regulations has become a key concern for domestic and international businesses alike. One of the most important regulatory requirements for cloud platforms is the IRCS License (Internet Resource Collaboration Service), officially known in Chinese as 互联网资源协作 or 云牌照. This article will explain what the IRCS license is, who needs one, and how to obtain one.

What Is the IRCS (Internet Resource Collaboration Service) License?

The IRCS License is a type of Value-Added Telecommunications Services (VATS) License, issued by the Ministry of Industry and Information Technology (MIIT) in China. It permits companies to provide internet-based services that rely on the collaborative use of computing and data resources—particularly in scenarios involving cloud platforms and Platform-as-a-Service (PaaS) models.

Services that fall under the scope of this license typically include application development environments, data storage services, and tools for deploying or operating software via the internet. While these services may not involve physical infrastructure, they often require back-end connectivity with data centres or virtualised cloud environments, making regulatory oversight necessary.

Who Needs an IRCS License in China?

Any company that offers services facilitating internet resource collaboration, such as hosting platforms, cloud middleware, or backend tools for developers, may be required to obtain an IRCS License. This includes both domestic firms and international providers looking to enter the Chinese market.

Foreign companies often encounter restrictions when trying to apply directly for the IRCS License due to limits on foreign ownership in the telecommunications sector. As a result, many use Variable Interest Entity (VIE) structures or collaborate with a Chinese partner that holds a Business License (营业执照). Without a compliant operational structure, companies risk fines, service shutdowns, or long-term market access issues.

How Is the IRCS License Different from the IDC License?

At first glance, the IRCS and IDC (Internet Data Center) licenses may appear similar, but they serve different purposes and apply to different types of services.

The IDC License is designed for businesses that operate or lease physical data centres and provide server hosting, bandwidth, or colocation services. These are infrastructure-heavy services that require ownership or control over hardware facilities.

In contrast, the IRCS License is geared toward software and platform-based services that rely on those data centres but do not manage them directly. If your company offers cloud-based tools, app development platforms, or virtualised computing environments that rely on third-party infrastructure, the IRCS License is typically more relevant.

Are SaaS Platforms Also Required to Get an IRCS License?

This is where regulatory grey areas emerge. In theory, pure Software-as-a-Service (SaaS) offerings that operate independently of backend infrastructure or collaborative resource usage might only require a basic ICP Filing rather than a VATS License.

However, Chinese authorities—particularly at the local level—may classify any paid, internet-based platform as requiring a VATS license, which could include IRCS. If your SaaS solution integrates with data storage, user environments, or supports multiple users interacting with backend resources, it could fall under IRCS regulations. This ambiguity introduces regulatory risk, and many companies err on the side of caution by ensuring they are covered under the appropriate license.

How Long Is the IRCS License Valid?

Once approved, the IRCS License is typically valid for five years and can be renewed prior to expiration. The application process involves submitting business documentation, demonstrating technical capacity, and complying with MIIT’s operating standards.

What’s the Best Way for Foreign Companies to Obtain an IRCS License?

For most foreign entities, applying for an IRCS License directly is not an option due to regulatory restrictions. Instead, the most effective route is to partner with a licensed Chinese company or work through a fully managed compliance solution that offers a legally approved structure, such as a VIE (Varied Interest Entity)

Attempting to operate without proper licensing can lead to significant setbacks, including product takedowns and blocked services within mainland China. Given the complexity of the licensing landscape, engaging a specialist service provider is often the most reliable path to compliance.

What are the Consequences for Non-compliance?

Depending on the severity of the violation, fines from CNY 100,000 to 1,000,000 can be issued. In cases of greater severity, the business in question may face temporary suspension or be suspended altogether.

Ready to Enter the Chinese Market?

Navigating China’s licensing framework—especially for cloud and internet services—can be confusing, time-consuming, and risky without expert support. AppInChina simplifies the process. We help companies legally enter the Chinese market by managing licensing, compliance, app distribution, and more. Whether you’re a SaaS startup or an enterprise PaaS provider, we can help you understand your legal obligations and secure the right licenses to operate in China.

Contact us today to learn how we can help your business obtain an IRCS License and launch in China with confidence.