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The Chinese government has been promoting the use of electronic business licenses since 2014, with the aim of digitalising and modernising business incorporation, and Shanghai is one of nine cities in the pilot program.
COVID-19, and the subsequent citywide lockdown in Shanghai, accelerated public administration into the new golden standard, streamlining bureaucracy processes and reducing paper-based applications at government counters.
The Shanghai municipal authorities have taken approximately two years to finalise the general implementation of e-business licenses and e-company chops (see below for definitions). With travel restrictions and uncertainties, electronic business licenses and company chops have become an essential part in daily business operations. They are a must for newly registered and established companies – especially as flexible-working models become the norm post pandemic.
This article summaries the key benefits of using electronic business licenses and company chops and introduces their usage and application procedures.
An e-business license is a legal electronic certificate containing the registration information of market entities. It has the same legal effect as the original business licenses in hard copy. Company officers, agents, and employees who are authorised by the legal representative to utilise e-business licenses have the right to complete applications and modifications of company records, licenses, and permits issued by the local and state authorities.
When the company legal representative is a Chinese mainland ID card holder, the company is not in abnormal status, and it has completed real name verification for their legal representative, the Chinese officer can access the Alipay or WeChat function for e-business licenses. They can then obtain the digital records of the company.
When the company legal representative is an overseas passport holder, the legal representative is required to either visit the local State Administration for Market Regulation (SAMR) office, in person, or authorise a local agent to apply for the e-business license by signing a confirmation letter and providing an email address to receive the QR code issued by the authorities.
Companies can verify their legitimate information via “online authentication procedures”, including:
The following functions provided in the SAMR system, or the general Online Government Portal, are also available:
The e-business license is like a digital ID to log into the Shanghai e-government system. The electronic company chop is a function to digitally chop/approve/certify documents available via the Shanghai government portal for company officers and authorised agents.
Companies that hold CA Certificates or e-business licenses can either apply via the single-online access platform under the legal representative U-Key or e-business licenses.
It is foreseeable that there will be an increasing number of applications and changes in the way companies file for secretarial information, taxes, and data to be reported to governmental authorities and windows.
Companies that have not finalised their switch to digital certificates may get caught up in the need to do so suddenly when they are required to complete one of those procedural flows. As facilitators directly involved in back-office and administrative flows, we have witnessed how swiftly government agencies have embraced this new normal and have therefore advocated clients to embrace this step further.
We are an established provider of company incorporation and outsourced corporate services in China. With more than ten years of in-depth knowledge and expertise in China, we offer our clients a complete suite of setup and company secretarial services, including e-business license applications, e-company chop applications, electronic chops and license management, support with real-name verification and bank account opening. At the same time, we take the burden of regulatory, financial and tax compliance, and corporate governance, so you can focus on managing your primary business interests.
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