To host a legal website in China that complies with Chinese laws, the budget should be between $20,000 and $100,000 or more.
*Estimates are based on quotations from Alibaba Cloud, local agencies, and web providers in China.
China is an incredible market with 1.4 billion domestic consumers, three times the U.S. market size. For businesses trying to sell to Chinese consumers, having a local website registered in China is critical to the success of their international business. However, there are many unique legal requirements to operate a website in China, unlike in other parts of the world. In this article, we will look at the operational costs of hosting a website in China.
Get a Domain Name
Like in any other country, you must buy a domain name first to get your website hosting. Typically, a brand new domain name costs about RMB 50 (US$8) to RMB 300 (US$50) a year for a “.com” domain or a “.net” domain in China. A “.cn” domain name usually costs less than a “.com” domain, at about RMB 30 (US$5) per year.
Notably, you can only purchase Chinese domain names from Chinese domain providers, and major ones include Alibaba Cloud, Tencent Cloud, Huawei Cloud, Baidu Cloud, etc. You cannot buy a Chinese domain name on GoDaddy.com or other domain providers outside China because, typically, these providers cannot provide you with the Chinese real-name verification, which the Chinese government requires. To understand which domain names are legal, you can read our article Domain Name Suffixes Available for ICP Filing.
We recently helped a client who wants to use the domain name purchased from GoDaddy.com. They must transfer the domain name from GoDaddy.com to one of the Chinese domain providers. The process took over a month, and extra money was also spent.
Set Up A Legal Entity In China
Although Chinese domain names are not expensive, they are only available for Chinese citizens and Chinese enterprises. Foreign individuals are not allowed to buy a Chinese domain name, and the same for foreign companies unless they have a legal entity in China first.
To use your domain name, you must provide:
- A valid resident I.D.
- Temporary resident I.D.
- Business license.
- Organization code certificate from China.
- You are required to confirm your identity to the entity from whom you will buy the Chinese domain name.
Applying for a joint venture business license in China will cost around RMB 5000 (USD 800) (See Lvgou.com for a reference) for a reference), depending on the city or province your company is going to be registered in. You also have to pay for the rental fee of your office space since you will need a valid physical address to register your company. The office rent varies widely, starting from RMB 8000 (USD 1200) per year. There’s also an accounting service fee of around RMB 300-500 (USD 50-80) per month. The expected timeline usually takes anywhere from 2-12 months and involves input from both compliance and development on an ongoing basis.
So the setup cost of a legal entity in China will be at least USD 2000, and the maintenance fee will be around USD 1250 per year.
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ICP Filing
For those who have never heard about the ICP, it would be favorable to look at a previous article called “How to Get an ICP License for China?”.
ICP stands for Internet Content Provider. As China maintains strict control over websites within its borders, any “internet content provider” must first register for licenses with the Chinese Ministry of Industry and Information Technology (MIIT) to be able to post information and or do business online. The requirement was instated in September 2000 by the Telecommunications Regulations of the People’s Republic of China.
There are generally two types of ICP Licenses:
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ICP Filing non-commercial websites (informational)(ICP Bei An, 非经营性ICP/ICP备案) for informational websites with no intention of sales. This license does not include direct sales.
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ICP Commercial License (operational) (经营性ICP), which allows your prospects to do online shopping.
Whether you are trying to do ICP Filing (Bei’an) or getting a Commercial ICP license, it is entirely FREE to go through the application process if you do it all by yourself. The Ministry of Industry and Information Technology does NOT charge any fees, and the Chinese government does not make a profit out of the ICP filling system.
However, the application process for an ICP can be tedious and lengthy, requiring the ability to speak Mandarin Chinese, having a mailing address in mainland China, and often back and forth in submitting the documents. Thus many foreign companies work with Chinese internet companies and agencies to accelerate the process. Since those companies will collect, fill out and upload all the required paperwork for you, they will ask for a fee from $1,000 and up. (See 9Mayi for a reference)
Costs can vary significantly from client to client, but what can be sure is that if you do not have local support in China and need to host onshore (and thus need the business license), you’ll likely need agency-level support starting at roughly $64,000. ( See Alibaba for a reference)
Web Hosting
After successfully acquiring your ICP license, you can buy or rent a local Chinese server to host your domain. It will be the best way to reach and engage your potential customers, access the local social network such as WeChat, and be indexed by the local search engine website such as Baidu. Web hosting in China is often misunderstood if you’re new to the topic. You can read our article about How to host a website in China in 2022?, but the main point you need to know is that if you want your website in China to be fast and accessible to all Chinese people at all times, your best bet is a mainland server, yes, for this reason. Mainland servers must obey strict laws, go through the whole ICP application process, and are less likely to be shut down for any reason.
Web hosting costs vary widely from RMB 4000-8000 (USD 600-1200) per year, depending on the configuration you need.
Conclusion
In conclusion, to host a legal website in China that complies with Chinese laws, the budget should be between $20,000 and $100,000 or more.
However, there are alternative ways to save this money and time. As a cross-border company having worked with several fortune 500 enterprises and with offices in the U.S. and Shanghai, we can assist you in every phase of your strategy to make your website fully work in China, and advise you on the best channels to promote your business in China. Norwegian Semiconductor Manufacturer has worked with us to Prevents Months of Delays.
Contact us today, and our experts will explain all the secrets of making your site live in China!
