Paid websites require a license; platforms that facilitate transactions need a different type of permit; free sites only need to be registered.

Websites that charge users must first obtain a Value-Added Telecommunications Business License. This license is issued solely to companies; individuals cannot apply for it. Free websites, on the other hand, only need to be registered, and this process incurs no fees. Operating a paid website without the proper license may result in confiscation of revenues, fines, or even closure. This section does not determine whether your platform falls under the category of transaction-facilitating services; the reasoning is explained in the notes.

Registration is free of charge. Obtaining a Value-Added Telecommunications Business License, however, involves costs; this license governs whether websites that charge users can legally operate. To apply for this license, you must first establish a company. For operations limited to one province, the registered capital must be at least 1 million RMB; for nationwide operations, it must be at least 10 million RMB. The review period lasts 60 days, and the license remains valid for 5 years.

The regulations state: “The state implements a licensing system for commercial Internet information services and a registration system for non-commercial ones. No entity may provide Internet information services without obtaining a license or completing registration.” In other words, paid services must first secure a license, while free ones must register; operating without either is prohibited. “Commercial services” are defined as activities involving paid provision of information or webpage creation to users. Platforms that facilitate transactions are classified under Online Data Processing and Transaction Processing Services, commonly abbreviated as EDI. These services involve using data and transaction platforms linked to public communication networks to handle data processing and transactions on behalf of users. Such activities include transaction processing, electronic data exchange, and data handling via network devices. Operating without a license or exceeding its scope of permission results in confiscation of all illegal revenues and fines ranging from 3 to 5 times that amount. If no illegal revenues exist or they are under 50,000 RMB, fines between 100,000 and 1,000,000 RMB apply; severe violations may lead to website closure nationwide.

To determine whether your platform qualifies as an EDI service, compare its activities to the definitions listed in the Telecommunications Business Classification Catalogue. No official regulation explicitly states that e-commerce platforms handling transactions and payments must obtain an EDI license. The Ministry of Industry and Information Technology’s guidelines merely advise applying for the appropriate license based on actual business activities. Therefore, this section merely outlines definitions without making any definitive conclusions. Additionally, only legally incorporated companies may apply for this license; individuals are ineligible.

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