Navigating China's New App Filing Requirements pt. 1

Tracey Tang

https://www.linkedin.com/in/tracey-tang-9b294920/

Art Dicker

https://www.linkedin.com/in/art-dicker/

 Navigating China's New App Filing Requirements: Key Insights from Tracey Tang

Welcome to another insightful episode of the China Business Law Podcast! In this episode, host Art Dicker is joined by Tracey Tang to discuss the recent changes to app filing requirements in China and their implications for foreign companies. Tracey, an expert in TMT (Technology, Media, and Telecom) law, offers a thorough overview of the new regulations, the compliance challenges, and practical advice for navigating this complex landscape.

Introduction to Tracey Tang

Tracey Tang is a seasoned attorney specializing in content licensing and digital entertainment industries. With over 20 years of experience, particularly in China, she provides a wealth of knowledge on the evolving regulatory environment for foreign companies operating in the digital space.

Understanding the New App Filing Requirements

What’s New?
As of April 1st, new rules mandate that apps in China must undergo a filing process. An app without a filing number could face significant difficulties on both Apple's App Store and various Chinese Android app stores.

The Implications for Developers
Developers must have a company registration in China, host their app on a China-based server, and ensure the app uses a domain name registered in China to complete this filing. This regulatory move aims to bring more stringent control over app distribution and ensure compliance with local laws.

Key Challenges for Foreign Developers

Android vs. Apple App Stores
While the Android app stores have already started enforcing these rules strictly, Apple's enforcement has been more gradual. This leniency from Apple is not expected to last long, and developers should prepare for stricter compliance checks soon.

Impact on Foreign Developers
For many foreign developers, the new requirements present a significant hurdle, as they often lack the infrastructure and partnerships in China to meet these new demands. Tracey explains that foreign developers will either need to set up a local entity, which can be time-consuming and costly, or partner with a Chinese company that already meets the regulatory requirements.

Compliance Strategies: Navigating the Red Tape

Work with Chinese Partners
One practical approach is to collaborate with a Chinese partner who can navigate the regulatory landscape and manage compliance issues. This partnership can also help expand the app's user base in China.

Set Up Local Entities
For companies keen on maintaining direct control, setting up a wholly foreign-owned enterprise (WFOE) in China is another route. While this provides more control, it comes with higher costs and regulatory scrutiny. Tracey advises that setting up a company is relatively straightforward; the challenges arise in obtaining the necessary licenses and permissions specific to the type of business.

Specific Challenges in the Gaming Industry

Heavily Regulated Sector
The gaming sector faces even stricter regulations. To publish a game in China, companies need an ISBN approval—a process that can only be carried out by a Chinese publisher with an Internet Content Provider (ICP) license. Foreign companies can’t publish games directly and must work with local entities.

Extended Compliance
Tracey highlights that even non-gaming apps can fall into heavily regulated categories, making it crucial to understand the specific requirements for different types of apps.

Preparing for the Future

Anticipating Enforcements
Despite the staggered enforcement, Tracey suggests not to delay compliance efforts. Apple is likely to ramp up enforcement in the near future, and developers should use this time to ensure they are fully compliant.

Long-Term Solutions
Looking ahead, Tracey advises companies to evaluate their long-term strategy in the Chinese market. For some, partnering with a local entity is the best route; for others, especially those with significant operations in China, setting up a local entity might be more beneficial despite the initial hurdles.

Conclusion

The tightening of app filing requirements in China is a significant development for foreign app developers. Tracey Tang provides invaluable insights into navigating these new regulations. Whether through local partnerships or establishing a local presence, compliance is key to sustaining operations in this vital market.

Stay tuned for part two of this episode, where Tracey Tang and Art Dicker delve into the liberalization of the value-added telecom services (VATS) sector in China and explore the various structures available for foreign investors.

Timestamps

00:00 Introduction and Guest Welcome

02:15 Overview of App Filing Requirements

07:13 Challenges for Foreign Developers

07:54 Setting Up a Company in China

11:30 Navigating Regulatory Compliance

13:20 Options for Foreign App Companies

18:14 Current Industry Reactions

25:00 Conclusion and Teaser for Part Two

Producer

Jacob Thomas

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