According to the e-commerce supervision and management regulation released by Beijing Administration for Industry and Commerce on its website, from August 1, 2008, profit-making online shops from Beijing should get a business license before starting operation.
However, nonprofit online shops that aim at selling or exchanging personal use items do not need to register.
For the convenience of customers, the regulation says e-business managers should publicize information such as their company names, business addresses, online shop names, IP addresses and how to contact them.
This new rule puts an end to easy online profits. Online businesses, particularly those run by small-scale vendors and individuals, have long been exempted from business-related taxes. Though the aim of the new rule is to provide better regulation of operators' behavior and to prevent illegal activities, putting it in practice is going to be difficult as there are tens of thousands of online shops out there. Most are small and will find it hard to justify the transition to an "official" business.
Any firm or individual that fails to abide by the new regulations faces a fine of between 20,000 yuan ($2,900) and 500,000 yuan.