Selling Your Software to China: Check Legality FIRST

Home | China Law Blog | Selling Your Software to China: Check Legality FIRST A technology company contacted one of our China lawyers months after having started selling its software into China. This company came to us seeking help in deciding whether to continue selling its software from the United States or to form a China WFOE and start selling through that entity. The first thing we told this company was that selling their software in China violated both China's data privacy laws and U.S. export control laws and it should cease as quickly as possible. It had simply never occurred to this company that what it could sell legally in the United States would be illegal (on two counts, no less) for it to sell to China. Before entering any international market, particularly one as different as China, companies should research and understand their legal compliance requirements. This is particularly true for technology companies because both China and the United States have laws focused on high technology. The two sets of laws that tripped up this particular company are the two sets of laws we most frequently see American high tech companies ignoring at their peril when looking to sell into China: United States export control laws and China data protection laws. Many know the United States prohibits selling a wide range of products to countries like Syria, North Korea, Cuba and Iran, but few seem to realize there are prohibitions on selling various products to China (and many other countries) as well. The Export Administration Regulations deal with selling software that may require a license or other exemption from the United States government. These regulations apply to software both physically shipped and electronically transmitted overseas. Whether a technology company requires an export license under EAR depends on the nature of its product, its intended use, its end-users, and the country to where it is being exported. Failing to comply with EAR can lead to civil penalties of up to USD $250,000 per violation and criminal penalties up to USD $1,000,000, plus up to twenty years of prison time per violation. China data protection laws often come into play for American (and other foreign company) technology companies selling their product to China. China has strict data privacy and data security laws and it is critical you comply with them. Bottom Line: Do not ship or transmit your software or other technology product to China without first making sure it complies with both your own country's laws and those of China. Check Out Our China Law Services Share Twitter Facebook LinkedIn E-mail Comment Dan Harris Dan Harris is a founding member of Harris Sliwoski, an international law firm where he mostly represents companies doing business in emerging market countries. Most of his time is spent helping American and European companies navigate foreign countries by working with the international lawyers at his firm in setting up companies overseas (WFOEs, Subsidiaries, Rep Offices and Joint Ventures), drafting international contracts, protecting IP, and overseeing M&A transactions. In addition, Dan writes and speaks extensively on international law, with a focus on protecting foreign businesses in their overseas operations. He is also a prolific and widely-followed blogger, writing as the co-author of the award-winning China Law Blog. Harris Sliwoski Attorney Read more posts [email protected] Read More AI, Internet, Web3, and Blockchain, Basics of China Business Law Related Posts September 15, 2026 Your AI-Drafted China Contract Says It Needs a Lawyer. Listen to It. September 11, 2026 Forensic Accountants in China Business Litigation: How True Numbers Can Tell the Wrong Story September 4, 2026 China NNN Agreement or Trademark Registration? You Usually Need Both September 1, 2026 AI Didn't Replace Lawyers. It Gave Us the 48-Page Contract. August 27, 2026 Do I Need a China NNN Agreement or a China Manufacturing Agreement? Usually Both. August 26, 2026 China’s New Overseas Investment Rules: Can Your Chinese Investor Actually Get the Money Out? August 24, 2026 International IP Protection for Startups: What to Protect and Where August 19, 2026 The Documents Are the International Deal August 19, 2026 China Supplier Fraud in Yiwu: Why We Recommended the Police, Not a Lawsuit August 17, 2026 China Trademark Registration: Why U.S. Companies Need More Than a Filing Agent August 10, 2026 Buying Expensive Equipment from China: Seven Questions to Answer Before You Pay August 7, 2026 DDP Shipping Risks: What Boise Cascade’s Guilty Plea Means for U.S. Buyers August 6, 2026 Protecting Your Artwork Internationally: What Artists Need to Do Before the Work Travels August 5, 2026 Your China Employee Signed the Vacation Policy. You Can Still Lose. July 29, 2026 The RedNote Contract Lesson for Companies Doing Business in China Leave a comment Cancel reply