In order for a financial institution to be set up in China and become authorized to carry on business activities, the investors will need to apply to the competent regulator (e.g., NFRA for commercial banks) for approval. While the detailed requirements and procedures of the NFRA and CSRC may differ, the application process, in general, will comprise two phases:

• Application for preparation — Once approved, the financial institution can be formally established.
• Application for commencement of operation — Once approved, the financial institution can then formally start with its business operations.

The whole approval and registration process for setting up a completely new financial institution in China may take around 18 months or even longer.

The legal regime regulating fintech is not yet well developed in China. There is no nationwide regulation on the licensing requirement.  However, the PRC government has set up a Fintech Innovation Working Group to encourage the development of innovative services adopting fintech in some pilot cities. However, detailed licensing and implementing regulations are still under development.