Selling through a Chinese distributor or agent without a company

Without a Chinese company you cannot import in your own name, so your partner does. A distributor buys the goods and sets its own resale price. A commission agent (行纪人) sells them for your account: the stock stays yours, the agent can keep it over unpaid commission, and it can count as your taxable establishment in China.

You have a Chinese partner ready to sell your products and no company in China. The partner has offered one of two deals. It buys your goods and resells them, or it sells them for you and takes a commission while the stock stays yours. The second sounds safer, because you keep the goods and the price.

It is not simply safer. Chinese law usually calls the second deal commission agency, and it gives the partner rights over your goods that a buyer never needs. It can also make you taxable in China, under a rule written about agents. The question to settle first is who owns the goods once they land.

Is a distributor the same as an agent in China?

No. Chinese law puts them under different contracts, and the difference is who owns the goods. A distributor is a buyer: you sell to it, ownership passes, and it resells on its own account.^⁠[1] An agent sells for you. It is either an agent acting on your behalf (委托) or a commission agent (行纪), which trades in its own name for your account and is paid a fee.^⁠[1]

	Distributor	Agent acting for you	Commission agent
Contract合同类型	Sale (买卖合同)	Entrustment (委托合同)	Commission agency (行纪合同)
Who owns the stock in China	The distributor, once you sell to it	You	You
Who bears loss or damage	The distributor, from delivery, unless the law or the contract says otherwise	You, as owner	You, as owner; the agent must keep the goods safely
Whose name is on the sale to the customer	The distributor’s	Yours, or the agent’s with the customer knowing it acts for you	The agent’s
How the partner earns	Its margin between buying and resale price	A fee	A commission
If the customer does not pay	The distributor’s problem	Your claim against the customer where it knew of the agency; otherwise disclosure rules apply	The agent answers to you, unless the contract says otherwise

The labels in your contract do not decide which one you have. A document called a “distribution agreement” that leaves the stock in your name and pays the partner a percentage is a commission agency in all but name. Do I need a Chinese company to sell in China covers the distributor route as one of four ways in without an entity.

Can we keep ownership of our stock in China without a company?

Yes, but the goods still enter China in your partner’s name, not yours. Registering with customs as an importer requires market entity status (市场主体资格).^⁠[2] Only a business registered in China holds it, including a registered branch of a foreign company.^⁠[3] A brand with neither cannot be the importer of record, so the partner imports and declares.

Ownership and the import paperwork can therefore point at different companies. Under a commission agency your goods are in the partner’s warehouse, under the partner’s import declaration, and still yours. The contract is the only document that says so, which is why its wording on ownership matters more here than in a sale.

What can a commission agent do with goods it holds for us?

More than most brands expect. The agent must look after the goods, and it needs your consent to sell below the price you set unless it makes up the difference itself.^⁠[1] If it sells above your price, the extra is yours unless the contract gives it a share. Two rules run the other way, in the agent’s favour.

• A lien over unpaid commission. If you are late paying the commission it has earned, the agent may keep your goods until you pay, unless the contract excludes this (Civil Code, Article 959).^⁠[1]
• Goods you do not collect. Say the goods cannot be sold, or you withdraw them. If you then neither collect them nor deal with them after the agent asks, the agent may lodge them under the law on lodgement (提存).^⁠[1]

Say a Danish cookware brand consigns 3,000 sets to an agent in Ningbo at RMB 200 each, with 15% commission. Six months in, 1,000 sets have sold for RMB 200,000, and the agent’s RMB 30,000 commission is two months overdue. Unless the contract excludes the lien, the agent may hold the other 2,000 sets, worth RMB 400,000 at the brand’s price, until it is paid.^⁠[1] A distributor holds no such lever, because it bought the goods and they were never the brand’s to withhold.

The agent also carries its own costs of selling, unless you agree to pay them.^⁠[1] Warehousing, marketplace fees and returns are the costs this rule usually decides, so name them in the contract.

Does a Chinese agent make us taxable in China?

It can. Take a business agent that regularly signs contracts for a foreign company, or stores and delivers goods for it. It is treated as that company’s establishment (机构、场所) in China (Enterprise Income Tax Law Implementing Regulations, Article 5).^⁠[4] Storing and delivering your goods is exactly what a consignment partner does.

A foreign company with an establishment in China pays enterprise income tax on that establishment’s China income, at 25%.^⁠[5] The rule is written about agents. A distributor that buys for its own account sells its own goods. Where China has a tax treaty with your home country and the treaty says something different, the treaty prevails.^⁠[5] Each treaty has its own wording on agents.

Value-added tax (增值税) follows the goods. Since 1 January 2026 a sale of goods takes place in China when the goods ship from or sit in China. Where the seller is abroad, the buyer withholds the VAT as withholding agent (扣缴义务人) unless the seller entrusts a Chinese agent to file and pay it under State Council rules.^⁠[6] A sale to a distributor made before the goods leave your country is a sale of goods neither shipped from nor located in China. Under a consignment, the goods are already in China when they are sold.

Can we tell a Chinese distributor what price to sell at?

Not as a fixed price or a minimum, unless you prove the agreement does not restrict competition or you fall within a safe harbour.^⁠[7] Since 1 February 2026 that safe harbour has numbers.^⁠[8] You and the distributor must each hold under 5% of the relevant market in every year of the agreement, and the goods it covers must turn over less than RMB 100 million a year.^⁠[9]

Outside those exceptions, fixing resale prices risks a fine of 1% to 10% of the previous year’s sales (Anti-Monopoly Law, Article 56). An agreement never put into effect risks up to RMB 3 million.^⁠[7] SAMR’s rules on monopoly agreements contain no article on agents.^⁠[9] So they do not say whether a price you set for a commission agent, who sells your own goods, counts as a resale price at all.

How do we end the arrangement if it is not working?

It depends on the contract type. Either side may end an agency at any time, and that rule reaches a commission agency too.^⁠[1] The side that ends a paid agency compensates the other for its direct loss and for what the contract would have earned it, unless the cause was not its fault. A distribution agreement has no such rule. Outside a breach, it ends when both sides agree or on grounds the contract itself gives one side, so those grounds belong in the contract.^⁠[1]

Before goods move, either kind of agreement has to settle these points:

1. Who owns the goods in China, and from when.
2. Who imports, declares and pays the import taxes.
3. For a distributor, what the brand may say about resale prices. For an agent, the price instructions and who keeps a higher price.
4. The commission or margin, when it is paid, and whether the agent’s lien is excluded.
5. Which selling costs each side carries.
6. How either side ends it, with what notice, and what happens to unsold stock.
7. Whose name the trademark is filed in. China gives a mark to whoever files first, and a partner filing your brand in its own name is the risk China’s first-to-file rule describes.

Which of the three shapes fits depends on whether you want the price and the stock or the simpler tax and paperwork. Market Entry and Structure Advisory sets out the options for your product and partner side by side. A Contract Commercial Review reads the draft your partner has sent against the list above before you sign.

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