Published by ChinaMNC · Longyou

Zhejiang's New Matcha Industry Rules: What Foreign Founders Need to Know

Zhejiang has introduced new policies and standards for its matcha industry, with implications for foreign founders setting up food or agricultural businesses in China. Here's what the changes mean for company registration and operations.

Zhejiang's Matcha Push: Key Takeaways for Foreign Founders

Zhejiang Province has announced new measures to develop its matcha industry, including a ten-point policy and a group standard for matcha quality. For foreign founders considering a China company registration in the food or agricultural sector, these developments signal potential opportunities and regulatory considerations. This article summarizes the key facts and explains what they mean for your business setup.

What the New Policies Say

On the 26th, a provincial on-site meeting on high-quality tea industry development was held in Yuhang, Hangzhou. At the meeting, the Zhejiang Provincial Department of Agriculture and Rural Affairs and the Zhejiang Provincial Department of Economy and Information Technology jointly released the "Ten Opinions on Supporting the High-Quality Development of the Matcha Industry". The Zhejiang Tea Society also published the "Zhejiang Matcha" group standard, which establishes a clear quality ladder: "Premium, Special Grade, First Grade, Second Grade".

The "Opinions" set the goal of building Zhejiang matcha into a "global high-end matcha center", with comprehensive measures covering production, processing, marketing, and integration. The group standard provides a quality benchmark to support the "high-end, branded" development goal.

In 2025, Zhejiang's matcha processing output reached 8,851 tons, up 50.3% year-on-year, with an annual output value of 1.1 billion yuan. The province also successfully promoted the establishment of a dedicated 13-digit HS customs commodity code for Chinese matcha products. An official from the Provincial Department of Agriculture and Rural Affairs noted that other provinces such as Guizhou, Hubei, and Sichuan are increasing their matcha processing capacity, creating scale and cost advantages, which is pushing Zhejiang to innovate and expand new growth space. This is the background for the new opinions and standard.

In Yuhang, Hangzhou, labeled the "source of world matcha", matcha-themed tea spaces are emerging, and domestic leading and emerging matcha brands are gathering. Local matcha companies have developed the "Jingshan Smart Matcha Machine", which uses AI algorithms to replicate the Song Dynasty's "Seven-Whisk Tea Method", reducing whisking time from 8 minutes to 2 minutes. It has received 3,000 global intention orders.

Next, Zhejiang will concentrate policies and resources to develop high-end and organic matcha, strengthen technological and process innovation, and accelerate the building of a regional public brand for Zhejiang matcha. By 2030, the goal is to have 300,000 mu (20,000 hectares) of matcha gardens, over 300 production lines, and a comprehensive output value of the entire industry chain exceeding 10 billion yuan.

What This Means for Your China Company Registration

If you are a foreign founder looking to enter China's matcha or food processing sector, these policy developments have several implications for your company registration and operations.

1. Entity Choice and Registration Location

Zhejiang, particularly Hangzhou and Yuhang, is positioning itself as a hub for high-end matcha. Registering your company in Zhejiang could give you access to industry clusters, potential incentives, and a growing supply chain. Common entity options for foreign investors include a wholly foreign-owned enterprise (WFOE) or a joint venture (JV) with a Chinese partner. If you plan to engage in manufacturing or processing, a WFOE is often suitable, but you must ensure your business scope includes the relevant activities.

2. Business Scope and Licensing

For matcha processing or food production, your company's business scope must include food production, processing, and sales. You will need to obtain a food production license (SC license) from the local market supervision administration. The new group standard for Zhejiang matcha provides a quality benchmark, but it is a voluntary standard; however, compliance with national food safety standards is mandatory. If you intend to export, note the dedicated HS code for matcha, which can simplify customs procedures.

3. Registered Capital and Investment

China has moved to a subscribed capital system, but for food production companies, authorities may consider your capital adequacy. There is no specific minimum for matcha, but you should align your registered capital with the scale of your planned operations. The policy aims to attract investment in high-end and organic matcha, so projects aligning with these goals may find support.

4. Tax and Compliance

Foreign-invested enterprises in China are subject to corporate income tax (25% standard rate, with possible preferential rates for small low-profit enterprises or high-tech enterprises). Value-added tax (VAT) applies to sales of goods, with rates varying by product; agricultural products may enjoy reduced rates. You must comply with food safety laws, labeling requirements, and environmental regulations. The new group standard can serve as a reference for quality control, but it is not a substitute for mandatory national standards.

5. Innovation and Technology

The example of the AI-powered matcha machine shows that innovation is encouraged. If your company develops or uses advanced technology, you may qualify for high-tech enterprise status, which brings tax benefits. However, ensure that your business scope covers research and development activities.

6. Market Access and Branding

Zhejiang plans to build a regional public brand for matcha. Foreign companies can potentially participate in this branding effort if they meet quality standards. However, using the regional brand may require authorization. Your own brand can be protected through trademark registration in China.

Steps to Register Your Matcha Company in Zhejiang

• Choose a company name and verify its availability with the local administration for market regulation.
• Prepare incorporation documents, including articles of association, shareholder information, and legal representative details. For foreign investors, documents may need notarization and authentication.
• Determine registered address – you need a physical address for registration; virtual addresses may be acceptable for certain activities but not for food production.
• Apply for business license through the local market regulation bureau, then obtain the food production license from the same authority.
• Register for tax and open a bank account.
• Comply with ongoing reporting and renewals.

Each step may require specific documents; consider engaging a professional service provider to navigate the process.

Conclusion

Zhejiang's matcha industry is growing rapidly, with supportive policies and a new quality standard. For foreign founders, this presents opportunities in a high-value agricultural sector. Understanding the regulatory landscape and following proper registration procedures are essential. If you are considering setting up a company in China, especially in the food industry, seeking local expertise can save time and ensure compliance.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.

For assistance with registering and operating a company in China, foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535.