Doing Business in Hangzhou

Hangzhou is one of China’s richest and fastest-growing cities. Its digital economy leads the country, contributing over 50% to its local GDP. As a pilot zone for digital trade, fintech, and cross-border e-commerce, the city benefits from major tech clusters, world-class universities, and national-level industrial parks. (Hangzhou Municipal Bureau of Statistics)

Digital Economy and E-commerce: Hangzhou is widely recognized as China’s digital capital, hosting the headquarters of Alibaba Group and Ant Group. These companies have cultivated a powerful e-commerce ecosystem that includes online retail, cloud services, and digital finance. The presence of industry giants has attracted thousands of SMEs and startups to Binjiang District and the Hangzhou Hi-Tech Zone. This sector alone contributes over half of the city’s GDP.

Technology, AI, and Smart Manufacturing: The city’s commitment to high-end manufacturing and AI development is visible in industrial parks like HEDA and Qiantang Smart City. These zones support next-generation technology firms specializing in robotics, big data, and 5G applications. Hangzhou is also a leading pilot city for autonomous vehicles and intelligent urban systems.

Green Technology and Sustainability: Hangzhou has embraced China’s carbon neutrality goals with major investments in renewable energy, electric vehicle production, and green urban planning. The city supports clean tech startups through funding schemes and eco-industrial zones that prioritize sustainability.

Tourism and Cultural Heritage: Famous for West Lake, Lingyin Temple, and the Grand Canal, Hangzhou’s cultural tourism sector continues to thrive. In 2023, the city welcomed over 80 million domestic and international tourists, generating substantial revenue for the hospitality, food, and retail sectors. Tourism also supports the rise of creative industries, such as fashion, film, and digital arts.

Starting a business in Hangzhou involves registering with the Hangzhou Administration for Market Regulation (AMR Hangzhou), obtaining a Unified Social Credit Code (USCC), and registering for taxes with the State Taxation Administration. Foreign investors can register a Wholly Foreign-Owned Enterprise (WFOE), Joint Venture, or Representative Office. The registration process has been digitized and is typically completed within a few weeks. Learn more about our Company Registration services.

Companies in Hangzhou must comply with China’s national accounting standards and submit financial statements to local tax authorities. Monthly, quarterly, and annual filings are required, including profit and loss reports, VAT declarations, and audit reviews. Compliance is overseen by the Ministry of Finance and local tax bureaus. Explore our Accounting and Tax services for full compliance support.

China’s taxation system includes several core taxes for businesses:

R&D credits, regional tax incentives, and high-tech zone benefits are available. Visit the State Taxation Administration for more.

Hangzhou offers a wide range of incentives to support foreign and domestic investment. These include startup grants, corporate tax reductions, innovation vouchers, land-use subsidies, and access to free trade zone policies. Local authorities have also created special economic zones (Qiantang District and the Hangzhou Hi-Tech Zone) to attract foreign capital. Our Business Visa and Work Permit services ensure a seamless setup for international investors and employees.

Intellectual Property: China has significantly improved IP protections. Foreign businesses are encouraged to register trademarks, copyrights, and patents directly with the China National Intellectual Property Administration (CNIPA). We provide comprehensive Trademark Registration support.

Labor Laws: Employment regulations in Hangzhou follow the PRC Labor Law, including contract formation, wage standards, benefits, and termination protocols. Employers must contribute to social insurance and the housing fund. We assist in drafting legally compliant Employment Contracts.

Data Protection and Cybersecurity: Businesses must comply with the Cybersecurity Law and Personal Information Protection Law. These regulations apply to data collection, cross-border transfers, and information storage. We offer Business Contracts and Compliance Services tailored to digital enterprises.

Hangzhou’s location in the Yangtze River Delta positions it as a major transport and logistics hub. Key infrastructure includes:

Hangzhou boasts a highly educated workforce, supported by institutions like Zhejiang University. With one of the youngest populations among Chinese Tier 1 cities, the city attracts top tech talent. Its rapid urban development has led to modern infrastructure, smart housing, and innovation zones.

Commercial and industrial spaces in Hangzhou are in high demand, particularly in tech parks and central business districts like Binjiang and Qianjiang New City. Rental yields are stable and often supported by government-backed tenants. Explore our Property Management Services for legal and operational support.

Foreigners may purchase commercial properties, and individuals can acquire residential property if they have worked in China for one year. Legal compliance, including registration with the Real Estate Bureau and SAFE approval for capital repatriation, is essential. Learn more about our Property Acquisition Services.

These examples highlight Hangzhou’s vibrant startup ecosystem and its ability to foster high-growth companies through innovation, government support, and market access.

1. XTransfer: Founded in 2017 in Hangzhou, XTransfer is a cross-border payment and financial technology startup focused on SMEs. It provides global collection accounts, currency exchange, and risk control services for small businesses trading internationally. Within just a few years, it reached unicorn status and is now used by over 300,000 companies worldwide, proving Hangzhou’s strength in enabling global fintech solutions.

2. Youzan: Youzan, founded in Hangzhou, empowers small merchants with e-commerce infrastructure, offering SaaS solutions for store management, payments, marketing, and social media integration. The company supports millions of entrepreneurs and small brands across China, helping them build and scale online businesses efficiently. It’s a textbook case of startup growth fueled by digital economy policies.

3. Rokid: Rokid is a Hangzhou-based startup specializing in augmented reality (AR) and artificial intelligence. Founded in 2014, the company has rapidly grown to become a global player in voice-controlled devices and smart glasses. With applications in education, manufacturing, and gaming, Rokid showcases Hangzhou’s potential in cutting-edge tech innovation and its ability to attract venture capital.

Economic Forecast and Development Projects: Hangzhou’s digital economy is expected to exceed RMB 1.5 trillion by 2027, driven by AI, quantum computing, and new infrastructure investments such as the Qiantang Smart City (Hangzhou Development and Reform Commission).

Challenges and Opportunities: While regulatory shifts and geopolitical risks exist, Hangzhou offers unparalleled opportunities in digital trade, smart logistics, and green finance. The city’s integration into the Yangtze River Delta development plan further boosts its long-term prospects.
By leveraging Hangzhou’s forward-thinking policies and technological ecosystem, entrepreneurs can scale rapidly. Contact us to start your business journey in Hangzhou today.