Corporate e-Governance in Shanghai: e-Licenses and e-Seals
Article 3 minute read

Corporate e-Governance in Shanghai: e-Licenses and e-Seals

12 May 2020

Business start-up costs are further reduced in Shanghai thanks to the proliferation of electronic licenses and seals. But while the technology brings many conveniences, it’s important to note its limitations.

On 1 April 2020, Shanghai took the lead in authorising the wider administrative use of electronic business licenses and seals, reducing company start-up costs and further promoting "paperless" entrepreneurship.


E-licenses and seals are not new. Shanghai, Beijing and other Chinese cities have, in recent years, introduced policies that give electronic versions the same legal power as physical business licenses and seals.

  • 2015: Shanghai trialled administration for the registration of an electronic business license.
  • 2018: Interim measures for the administration of e-seals were launched. 
  • 2019: Shanghai launched its e-seal public service platform, which can manage the life cycle of both e-seals and signatures, including application, modelling, filing, inquiry, change, cancellation, freezing and so on.

Main changes under the latest reform

Previously, companies were only able to apply for e-seals after they had received physical licenses and engraved physical seals. Applicants had to present original paper licenses as well as copies, and e-versions of licenses and seals had to be applied for separately and used in a different way.

Now, e-licenses and seals are automatically generated in Shanghai when a company’s business operation is approved. Both can be received simultaneously via mobile phone and the e-versions can be downloaded via WeChat, Alipay or the SuiShenBan app by the company’s legal representative after he or she completes a real name verification process. 

Companies can make registration applications, publicise their annual reports and handle tax and social insurance affairs online all with e-licenses and e-seals.

Potential limitations

While the technology brings many conveniences, it’s important to note its limitations. 

The legal representatives of most foreign-invested companies are usually foreign passport holders. Real-name verification via mobile apps is needed to obtain e-licenses and seals, and this step is currently only open to Chinese citizens.

Unless the legal representative is Chinese, foreign invested companies will still need to apply for e-licenses and seals in Shanghai using the former, more cumbersome method.

Not all companies accept electronic seals, which can make some contract signings more complex. Large multinationals usually need to involve multiple departments and/or management teams in the application and approval process of a physical seal, so one can imagine the approval process for an e-seal would be just as onerous, if not more so. 

The “four-eyes principle” – whereby two people are required to review and sign off on an action before it can be taken – is an important part of many company seal usage policies. This may not be easily adapted for e-seals.

Next steps for Corporate e-Governance

Shanghai authorities are already planning to expand the use of e-licenses and seals to the full suite of municipal government services. E-commerce is also expected to gradually take up the technology.

While the “paperless” office was making headway before the pandemic, there is no doubt that COVID-19 has accelerated the trend and made the electronic management of corporate licenses and seals more palatable.

One can fully imagine that in the not-too-distant future, legal representatives will be signing documents and contracts by scanning a QR code with their mobile phone.

Talk to TMF Group

TMF China can help newly established companies apply for e-Licenses and e-Seals during the incorporation process if required. Our local experts can also assist existing companies looking to apply for them separately as needed.

Need more information? Contact us today.

Written by

TingTing Cui

Manager, Global Entity Management Services, TMF China

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