What to Prepare Before Starting a Cross-Border E-Commerce Business
Author: Junanda ConsultingReviewed by: Junanda Service Team2026-09-19
Cross-border e-commerce is not simply a matter of opening a store and selling goods. It involves entity qualifications, customs declaration, foreign exchange collection, export tax rebate, platform compliance, logistics and fulfilment, and destination country taxation, among other things. If any one of these is not properly prepared, it will hold up the next stage. This article works through the key matters in the order in which they need to be prepared, so that a business can put the framework in place before committing funds.
1. Choosing the Business Entity and Preparing Funding and the Team
The first step is to decide on the form of the operating entity:
| Entity form |
Common scenarios |
Points to note |
| Domestic company |
Where an export tax rebate, Comprehensive Pilot Zone policies or compliant domestic operations are required |
Import and export filings are required, and the accounting and tax requirements are relatively formal |
| Hong Kong SAR company |
Used for cross-border collection, as the overseas platform entity, or within an international business structure |
Attention needs to be paid to Hong Kong SAR profits tax and the annual audit and reporting requirements |
| Other overseas company |
Where a platform for a particular market imposes onboarding requirements |
Involves overseas tax and information disclosure, with relatively high compliance costs |
The choice should take into account whether the platform requires a particular type of entity, how funds will be brought back, whether export tax rebate (exemption) is available, the shareholder structure, and future financing arrangements. Where a cross-border structure is involved, the compliance requirements of both Mainland China and the Hong Kong SAR should be considered together, and the specifics are subject to the latest official announcements.
One point to note is that more entities are not necessarily better. Each entity carries its own books, filing obligations and annual reporting obligations, so the more entities there are, the higher the management cost and compliance risk. We recommend running the business process through with a single entity first, and then adjusting the structure step by step as funding, tax or platform requirements make it necessary.
Before the store is formally opened, two further matters should be thought through:
- Funding rhythm: stock purchases, first-leg freight, platform fees, advertising and overseas warehouse storage charges all absorb funds, and there is a collection period before payment arrives. The full cycle from stocking to collection, and the peak funding requirement, should be estimated in advance to avoid the flow of funds being cut off part way.
- Team and outsourcing: at a minimum there needs to be someone responsible for product selection and operations, customer service and after-sales, logistics and warehousing, and finance and tax. In the early stage, finance and tax, customs declaration and logistics can be outsourced to professional firms, but the business itself must retain control over key data and compliance responsibility.
2. Customs Supervision Codes and Filings
Cross-border e-commerce exports use several common customs supervision codes. The generally known position is as follows:
- 9610: cross-border e-commerce retail export (the B2C direct-mail model), using list-based release and consolidated declaration;
- 9710: cross-border e-commerce B2B direct export, for bulk business-to-business exports;
- 9810: cross-border e-commerce export to an overseas warehouse, where goods leave the country first and are sold from the overseas warehouse;
- 1210: bonded cross-border e-commerce (mainly bonded online shopping imports, though bonded export scenarios are also involved).
A business needs to select the supervision code corresponding to its actual business model, and complete registration and filing procedures as required by customs. The specific scope of application, the declaration elements and the filing requirements are subject to the latest customs announcements.
3. Foreign Exchange and Collection Channels
Cross-border collection is the first real hurdle for many businesses:
- Third-party payment institutions: collecting and settling foreign exchange through a licensed payment institution is convenient, but the institution's qualifications and its fee scale need to be confirmed;
- Overseas collection accounts: some businesses open an overseas bank account or use an overseas collection service, and need to pay attention to anti-money laundering rules and to explaining the source of funds;
- Settlement: handled in accordance with the foreign exchange administration rules, with attention to consistency between the declared trade background and the supporting documents.
The core principle is that the amount collected, the order data, the customs declaration data and the tax filing data should as far as possible corroborate one another. Scattered collection channels and amounts that persistently fail to match orders are common risk points.
4. Platform Onboarding, Account Compliance, Data and Intellectual Property
- Store entity: confirm the entity types and place-of-registration requirements the platform permits;
- Category qualifications: different categories may require brand authorisation, certification or product compliance documents;
- Account security: multiple linked accounts, the login environment and the binding of collection accounts are common triggers for account suspension;
- Brand and intellectual property: complete trade mark registration in advance to avoid infringement complaints leading to delisting;
- Data compliance: comply with the rules of Mainland China and of the destination country on personal information protection and cross-border data transfer;
- Intellectual property searches: search trade marks, patents and copyright in advance to avoid infringement, and register your own brand overseas;
- Product compliance: pay attention to the certification, labelling and safety standards the destination country requires.
5. Export Tax Rebate (Exemption) and Comprehensive Pilot Zone Policies
The tax treatment of cross-border e-commerce exports usually involves the following:
- Export tax rebate (exemption): qualifying exported goods may be declared for rebate (exemption) in accordance with the rules, which requires the relevant qualifications and supporting documents;
- "No-invoice exemption" in Comprehensive Pilot Zones: retail export enterprises within a Cross-Border E-Commerce Comprehensive Pilot Zone may, in accordance with the rules, apply the exemption policy to qualifying goods. The specific conditions are subject to the latest official announcements;
- Deemed assessment: qualifying enterprises within a Comprehensive Pilot Zone may have their Corporate Income Tax assessed on a deemed basis. The specific scope of application and calculation basis are subject to the latest position of the competent tax authority.
The eligibility conditions, filing requirements and voucher requirements for the policies above are relatively detailed. We recommend confirming them with the competent tax authority before business begins.
6. Logistics and Overseas Warehouses
- Direct mail: fast, with little inventory pressure, but a relatively high unit cost;
- Dedicated line services: a balance between speed and cost, suited to categories with a certain order volume;
- Overseas warehouses: stock is sent to the destination country in advance, giving fast delivery and higher conversion, but tying up funds and carrying the risk of slow-moving stock;
- First-leg transport: attention needs to be paid to the customs clearance method, which party bears the duty, and the time taken to reach the warehouse.
Under the overseas warehouse model, the goods have usually not yet been sold when they leave the country, so the timing of declaration and of revenue recognition requires particular attention.
7. Destination Country Tax Compliance
Different countries impose different tax requirements at the import and sales stages:
- Customs duty: levied according to the destination country's tariff schedule and the declared value;
- Import-stage taxes: such as VAT and consumption tax;
- Sales-stage taxes: such as European Union VAT and the goods and services tax in certain countries;
- Registration and filing obligations: some countries require a tax number to be registered once sales reach a certain level, followed by regular filings.
The specific rates, thresholds and registration requirements differ from country to country. These are subject to the latest rules of the destination country's tax authority, and we recommend confirming each item clearly with the destination country's tax authority before starting to trade.
Self-Check Checklist
- Has the operating entity form been decided, and has the route for bringing funds back been assessed?
- Has an appropriate customs supervision code been selected and the filing completed?
- Are the collection channels compliant, and can the foreign exchange received be matched to the order and customs declaration data?
- Are the entity and category qualifications for platform onboarding complete?
- Do you understand the eligibility conditions for export tax rebate (exemption) and Comprehensive Pilot Zone policies?
- Do the logistics and overseas warehouse arrangements match the rhythm of the business?
- Have the destination country tax registration and filing obligations been confirmed?
- Have trade marks and product certification been arranged in advance?
This article is general business information prepared by Junanda Consulting. Specific policy positions, tax rates, deadlines and procedural requirements are subject to the latest official versions issued by the competent authorities. To understand how these requirements apply to your business, please contact Junanda Consulting for further information and support.
