With the Christmas and New Year holidays soon approaching, the majority of Chinese consumer’s attention are however still affixed on 2 other non-official festivals: Double Eleven and Double Twelve. The booming development of E-commerce has lifted the curtain in order for the swift expansion of e-commerce operators and alhough the e-business holds rapid growth as its creed, to achieve the sustainable growth of e-business, the State Administration of Industry and Commerce (SAIC) has issued new regulations on the registration of e-commerce operators.
On 3 December 2018, Opinions of the State Administration for Market Regulation on Working Effectively on the Registration of E-commerce Business Operators (“The Opinions”) was officially issued, of which the following two points are noteworthy,
1. Where an e-commerce business operator opts to register itself as a privately-owned business, it is allowed to register its online business place as the site for business operations. Where an e-commerce business operator engages in business activities on more than one e-commerce platform, it needs to register its multiple online business places in which it engages in business activities with the registration authority. It is allowed to register its habitual residence as it’s domicile. The market regulation department of the county, autonomous county, city not divided into districts or municipal district where the individual domicile is located is its registration authority.
2. A privately-owned business that registers its online business place as its site for business operations will only be allowed to carry out business activities on the internet and is prohibited from changing the use of its residential house for the purpose of conducting offline production and business activities without authorization, and is required to make a commitment in this regard.
For example, in a scenario where Jack operates on both Taobao and Jingdong in the form of a privately-owned business at his house, he will be able to register his residential address as the business address to the local AIC and he needs to register both his Taobao and Jingdong stores. However, this is only applicable if Jack operates as a privately-owned business and he is therefore unable to carry out any offline business activities in this arrangement.
Considering the huge number and rich diversification of e-commerce operators in China, during the execution of The Opinions there is bound to be accompanying practical guidelines in the near future, we will keep a close eye on this. Should you need more information on this topic, please contact our professionals at D’Andrea & Partners.