On May 12, 2025, the State Administration for Market Regulation (SAMR), in collaboration with the People’s Bank of China (PBC), issued the Draft Measures for the Application and Agency Conduct in the Registration of Business Entities (hereinafter referred to as the “Measures”) to solicit public comments. The deadline for feedback is May 23, 2025.
As China’s business registration system continues to undergo deep reform, the procedures for registration have become increasingly streamlined and convenient, significantly lowering the threshold for market entry. Against this backdrop, a large number of intermediaries and registration agents are engaged in registration services. Statistics show that approximately 70% of registration applications nationwide are handled by agents or intermediary institutions. While the agency mechanism plays a positive role in reducing the time cost for business entities and enhancing registration efficiency, it has also given rise to numerous problems such as fraudulent registrations, “being made a legal representative without consent,” malicious registrations, and weak anti-money laundering (AML) safeguards. These issues seriously undermine the effectiveness of the system and disrupt market order. The introduction of the Measures directly addresses these problems by drawing on international experience from developed jurisdictions and aligning with the Financial Action Task Force (FATF) standards for anti-money laundering. Focusing on risk areas within registration agency conduct, the Measures propose establishing a registration agent management system, AML mechanisms, and a legal liability framework, thereby filling regulatory gaps and strengthening supervision throughout the registration process.
This article analyzes the key contents of the Measures and outlines the anticipated impact of their implementation.
I. Key Provisions 1. Clarifying the Principal Responsibility of Applicants and the Agent Relationship The Measures explicitly identify registration liaison officers and registration agents as the legitimate submitters of registration applications. Liaison officers must be duly filed with the registration authority, while agents must be formally entrusted by business entities. When submitting application documents, agents are required to provide a declaration of integrity, affirming that they have received proper authorization and that the materials submitted are truthful and lawful. This provision enhances clarity regarding legal responsibility and helps prevent “separation of identity and action” or regulatory gray areas.It is worth to note that the Measures adopt a relatively broad definition of the term “agent” which is not limited to officially registered company registration service providers. It also encompasses law firms, consulting institutions, and any other third-party entities or individuals that are legally authorized and entrusted to provide business registration services. All of these may be recognized as “agents” under the Measures. 2. Establishing a National Unified Information System for Agents The Measures authorize SAMR to build a centralized national information management system for registration agents. This system will comprehensively collect data on agents, their associated institutions, personnel, agency activities, records of violations, and dishonest conduct. Local regulatory authorities are required to report updates on agents within their jurisdictions regularly. This interconnected system ensures traceability and enhances regulatory oversight. However, the centralized national information management system for registration agents mentioned above is different from registration system specifically for company registration agents. From the perspective of current policy direction, the government continues to promote the establishment and development of legitimate market entities and encourages a simplified and efficient company registration process. 3. Regulating Agents’ Professional Conduct and Obligations Articles 10 through 13 of the Measures systematically define agents’ due diligence obligations, including: 1. Acting lawfully, serving clients in good faith, and avoiding misleading conduct;2. Executing written powers of attorney that clearly state the agent’s identity, scope of authority, and term of engagement;3. Verifying the identity and legal status of clients, and cooperating with the registration authority’s real-name verification process;4. Assisting in the preparation of registration materials and ensuring their accuracy, completeness, and legality;5. Retaining records of agency contracts, verification procedures, and professional conduct for no less than ten years. These rules ensure that agents are not mere “conduits” but bear critical responsibility for verification, compliance checks, and risk identification. 4. Prohibiting Fraudulent Registration and Disruption of Order Articles 14 and 15 list eight types of fraudulent conduct and eight types of disorderly behavior by agents, including forging seals, identity theft, deceiving clients, colluding in falsification, submitting false declarations, and inducing registrations through deception. These provisions form a robust legal basis for cracking down on illicit intermediaries and shell company manufacturers. 5. Introducing AML-Specific Compliance Obligations Chapter Five of the Measures is the first in China to introduce dedicated anti-money laundering and counter-terrorism financing provisions in the business registration process. Agents involved in high-risk services such as company formation, nominee directorships, or providing registered addresses must conduct customer identity verification, risk assessments, and due diligence. For clients from high-risk jurisdictions, foreign politically exposed persons (PEPs), or entities blacklisted by the PBOC, agents must conduct enhanced scrutiny, refuse service, and report promptly.Meanwhile, agency institutions must establish internal AML controls, designate compliance officers, train employees continuously, maintain records, and report suspicious transactions—ensuring that the principle of “systems, personnel, records, and accountability” is effectively upheld. 6. Defining Legal Liability and Penalty Mechanisms Chapter Six of the Measures introduces a three-tier penalty structure: 1. General violations are subject to administrative penalties;2. Submission of false documents or misconduct with serious consequences is subject to heavier penalties;3. Agents who fail to perform due diligence or repeatedly violate rules within three years may face industry bans. Additionally, the Measures define the concept of “persons directly responsible,” including legal representatives, senior management, agents, liaison officers, and clients who knowingly cooperate in fraudulent registration. This targeted accountability enhances the deterrent effect. 7. Promoting Industry Self-Discipline and Professional Development Article 18 encourages agents to form industry associations in accordance with the law. These associations are tasked with promoting standardization, digital transformation, policy participation, and public education. Through self-regulation, the overall professionalism and compliance level of the industry can be elevated, fostering a more orderly and sustainable service ecosystem. II. Implementation Impact Assessment The implementation of the Measures is expected to have profound impacts on the registration agency industry. 1. Market OrderReal-name registration, strict identity verification, and mandatory record-keeping will significantly reduce the space for illicit registration activities. This strengthens defenses against shell companies, money laundering schemes, and registration abuse. Unqualified intermediaries will be squeezed out, while the market will shift toward a transparent and orderly structure. 2. Industry DevelopmentThe imposition of due diligence, identity checks, and AML obligations raises the professional threshold for agents. This will promote the transition from low-barrier, mixed competition to high-quality, specialized services, enhancing industry concentration and self-regulation. 3. Business Entity RightsThrough liaison officer filing and agent accountability, the Measures close responsibility loops in registration activities. This bolsters the protection of lawful business operators and helps eliminate systemic issues such as “involuntary legal representatives.” 4. Regulatory PracticeThe national agent information system will integrate with existing registration platforms, AML monitoring tools, and corporate credit databases. It enables multi-agency coordination, proactive risk monitoring, real-time supervision, and post-incident accountability—creating a comprehensive governance loop powered by digital tools. 5. International CooperationBy aligning China’s registration supervision standards with FATF principles, the Measures lay a foundation for China’s participation in the global AML framework and enhance its international business environment evaluation. This will also boost foreign investor confidence and facilitate cross-border regulatory collaboration.
[Comment] The Measures represent a systematic and foundational institutional design that addresses long-standing regulatory gaps in China’s business registration framework. By establishing a regime based on real-name information submission, due diligence, AML compliance, and traceable accountability, the Measures directly tackle the persistent risks of agent misconduct and fraudulent registration. Once formally implemented, the Measures will serve as a critical pillar for the high-quality operation of China’s registration system and a significant step toward strengthening the rule of law in the business environment.
I. Key Provisions 1. Clarifying the Principal Responsibility of Applicants and the Agent Relationship The Measures explicitly identify registration liaison officers and registration agents as the legitimate submitters of registration applications. Liaison officers must be duly filed with the registration authority, while agents must be formally entrusted by business entities. When submitting application documents, agents are required to provide a declaration of integrity, affirming that they have received proper authorization and that the materials submitted are truthful and lawful. This provision enhances clarity regarding legal responsibility and helps prevent “separation of identity and action” or regulatory gray areas.It is worth to note that the Measures adopt a relatively broad definition of the term “agent” which is not limited to officially registered company registration service providers. It also encompasses law firms, consulting institutions, and any other third-party entities or individuals that are legally authorized and entrusted to provide business registration services. All of these may be recognized as “agents” under the Measures. 2. Establishing a National Unified Information System for Agents The Measures authorize SAMR to build a centralized national information management system for registration agents. This system will comprehensively collect data on agents, their associated institutions, personnel, agency activities, records of violations, and dishonest conduct. Local regulatory authorities are required to report updates on agents within their jurisdictions regularly. This interconnected system ensures traceability and enhances regulatory oversight. However, the centralized national information management system for registration agents mentioned above is different from registration system specifically for company registration agents. From the perspective of current policy direction, the government continues to promote the establishment and development of legitimate market entities and encourages a simplified and efficient company registration process. 3. Regulating Agents’ Professional Conduct and Obligations Articles 10 through 13 of the Measures systematically define agents’ due diligence obligations, including: 1. Acting lawfully, serving clients in good faith, and avoiding misleading conduct;2. Executing written powers of attorney that clearly state the agent’s identity, scope of authority, and term of engagement;3. Verifying the identity and legal status of clients, and cooperating with the registration authority’s real-name verification process;4. Assisting in the preparation of registration materials and ensuring their accuracy, completeness, and legality;5. Retaining records of agency contracts, verification procedures, and professional conduct for no less than ten years. These rules ensure that agents are not mere “conduits” but bear critical responsibility for verification, compliance checks, and risk identification. 4. Prohibiting Fraudulent Registration and Disruption of Order Articles 14 and 15 list eight types of fraudulent conduct and eight types of disorderly behavior by agents, including forging seals, identity theft, deceiving clients, colluding in falsification, submitting false declarations, and inducing registrations through deception. These provisions form a robust legal basis for cracking down on illicit intermediaries and shell company manufacturers. 5. Introducing AML-Specific Compliance Obligations Chapter Five of the Measures is the first in China to introduce dedicated anti-money laundering and counter-terrorism financing provisions in the business registration process. Agents involved in high-risk services such as company formation, nominee directorships, or providing registered addresses must conduct customer identity verification, risk assessments, and due diligence. For clients from high-risk jurisdictions, foreign politically exposed persons (PEPs), or entities blacklisted by the PBOC, agents must conduct enhanced scrutiny, refuse service, and report promptly.Meanwhile, agency institutions must establish internal AML controls, designate compliance officers, train employees continuously, maintain records, and report suspicious transactions—ensuring that the principle of “systems, personnel, records, and accountability” is effectively upheld. 6. Defining Legal Liability and Penalty Mechanisms Chapter Six of the Measures introduces a three-tier penalty structure: 1. General violations are subject to administrative penalties;2. Submission of false documents or misconduct with serious consequences is subject to heavier penalties;3. Agents who fail to perform due diligence or repeatedly violate rules within three years may face industry bans. Additionally, the Measures define the concept of “persons directly responsible,” including legal representatives, senior management, agents, liaison officers, and clients who knowingly cooperate in fraudulent registration. This targeted accountability enhances the deterrent effect. 7. Promoting Industry Self-Discipline and Professional Development Article 18 encourages agents to form industry associations in accordance with the law. These associations are tasked with promoting standardization, digital transformation, policy participation, and public education. Through self-regulation, the overall professionalism and compliance level of the industry can be elevated, fostering a more orderly and sustainable service ecosystem. II. Implementation Impact Assessment The implementation of the Measures is expected to have profound impacts on the registration agency industry. 1. Market OrderReal-name registration, strict identity verification, and mandatory record-keeping will significantly reduce the space for illicit registration activities. This strengthens defenses against shell companies, money laundering schemes, and registration abuse. Unqualified intermediaries will be squeezed out, while the market will shift toward a transparent and orderly structure. 2. Industry DevelopmentThe imposition of due diligence, identity checks, and AML obligations raises the professional threshold for agents. This will promote the transition from low-barrier, mixed competition to high-quality, specialized services, enhancing industry concentration and self-regulation. 3. Business Entity RightsThrough liaison officer filing and agent accountability, the Measures close responsibility loops in registration activities. This bolsters the protection of lawful business operators and helps eliminate systemic issues such as “involuntary legal representatives.” 4. Regulatory PracticeThe national agent information system will integrate with existing registration platforms, AML monitoring tools, and corporate credit databases. It enables multi-agency coordination, proactive risk monitoring, real-time supervision, and post-incident accountability—creating a comprehensive governance loop powered by digital tools. 5. International CooperationBy aligning China’s registration supervision standards with FATF principles, the Measures lay a foundation for China’s participation in the global AML framework and enhance its international business environment evaluation. This will also boost foreign investor confidence and facilitate cross-border regulatory collaboration.
[Comment] The Measures represent a systematic and foundational institutional design that addresses long-standing regulatory gaps in China’s business registration framework. By establishing a regime based on real-name information submission, due diligence, AML compliance, and traceable accountability, the Measures directly tackle the persistent risks of agent misconduct and fraudulent registration. Once formally implemented, the Measures will serve as a critical pillar for the high-quality operation of China’s registration system and a significant step toward strengthening the rule of law in the business environment.