No Overseas Entity, Global Customers: A Merchant of Record Guide for Developers in China (2026)
You cannot open a Stripe account without a foreign company, but your product already has overseas users. Here is how a merchant of record removes the entity problem, and how money actually comes in and goes out.
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You can sell to customers worldwide without a foreign company: a Merchant of Record becomes the legal seller of your product, issues the invoice and carries the tax obligation, so you never register abroad or file VAT in each jurisdiction. Customers in mainland China can pay by WeChat Pay, and funds settle on a T+10 cycle before payout to a mainland bank account or Alipay.
- What blocks developers in mainland China is not technical — it is the lack of a legal entity that can transact globally, invoice, and carry tax liability.
- Under a merchant of record, the party that needs an entity changes, so you do not incorporate abroad and do not register for VAT yourself.
- WeChat Pay is supported on the platform's own acquiring qualification, so individual developers never apply for a WeChat merchant account — but it handles one-time payments only, not recurring charges.
- Settlement runs T+10 business days; payouts to mainland personal bank cards or Alipay carry a 1% fee with a USD 10 minimum.
- Collecting through a merchant of record and withdrawing to China does not consume the annual USD 50,000 individual foreign-exchange quota.
Your product already has overseas users. You are based in mainland China, you do not have a foreign company, and you cannot open a Stripe account. A merchant of record is how most developers in this position end up getting paid — the hard part is the practical detail.
This is not a technical problem. Your code is fine and your product is fine. What blocks you is an entity — a legal person that can transact with customers worldwide, issue invoices, and carry a tax obligation.
This guide covers three things: how a merchant of record removes that requirement, how money comes in, and how money goes out.
Why collection is the first wall
Developers in mainland China usually face two options, and neither is comfortable.
Option one: incorporate abroad. A US LLC, a Hong Kong company, a Singapore company — all workable. But incorporation is only the start. Afterwards come annual filings, tax returns, bank account maintenance, and the heaviest item: once your sales cross a threshold in a given country, you must register there and file VAT, GST, or consumption tax. The EU has one set of rules, the UK another, Japan another, Australia another. For a one-person product, a multinational tax compliance stack is wildly out of proportion.
Option two: find a way to collect that does not require your own entity. That is what a merchant of record exists for.
What a merchant of record actually removes
A merchant of record becomes the legal seller of your product.
When a customer places an order, the contract is with the platform. The invoice is issued in the platform's name. The money lands in the platform's account first. The tax obligation arising from that sale sits with the platform, which registers and files for it. Your relationship with the platform is a separate layer: it deducts fees and settles the remainder to you.
So you do not need a foreign company. Not because the rules relaxed, but because the party that needs an entity changed.
If the model itself is new to you, start with what a merchant of record is and how it differs from a PSP. This guide skips the concepts and goes straight to operations.
Taking Waffo Pancake as the example: the entity serving merchants and the payment licence both sit in Hong Kong (an MSO licence), while the engineering team is in mainland China. That structure explains a lot of what follows — why settlement is in USD, and why a payout involves a currency conversion.
How money comes in
Overseas customers: international cards. Nothing unusual here; Visa, Mastercard and other major schemes are accepted normally.
Mainland China customers: WeChat Pay. This is the part developers in China care about most, and there are several things to know.
- It is supported. It runs on the platform's own acquiring qualification — an agreement with WeChat HK, processed as a cross-border payment — which means you do not need your own WeChat merchant account. That matters enormously for individual developers, since applying for one directly requires a company entity and a filed website, and many people stall there.
- One-time payments only; no recurring charges. This is a hard constraint, covered separately below.
- Amount limits apply. WeChat imposes limits on transaction and periodic amounts. The current figures depend on your actual configuration and remain under discussion with the channel, so confirm the current position before you design your pricing.
- Some categories are restricted. Divination and fortune-telling style products, for example, cannot currently be served through the WeChat channel, though the international card channel may still be available. If you build in a sensitive category, ask before integrating.
Choosing a pricing currency:
| Pricing currency | Through WeChat Pay | Notes |
|---|---|---|
| CNY | Ordered directly in RMB | The customer pays exactly what is displayed, with no intermediate conversion |
| USD | Converted to HKD before the WeChat order | One currency conversion occurs, so the amount paid differs from the listed price |
If your core users are in mainland China, CNY pricing reads better — nobody has to convert in their head.
A counterintuitive point: WeChat Pay has no fixed per-transaction fee (international cards carry a fixed cost on every charge). So for low-priced products, the effective rate through WeChat can be better than through cards. The lower your price point, the larger that gap becomes.
How money goes out
T+10 business dayssettlement cycle (Hong Kong holidays)docs.waffo.ai 1%, USD 10 minpayout feedocs.waffo.aiThis is where most people get stuck, and it is the part documentation covers least.
Settlement runs T+10 business days, observing Hong Kong public holidays. A successful transaction does not mean the money is yours yet — it has to settle and convert into the settlement currency before a payout can be initiated. The exchange rate floats in between; the final amount is only fixed at settlement.
Payout channels support personal bank accounts and personal Alipay. Coverage keeps expanding — beyond mainland China, personal payout methods in Hong Kong, the United States, South Korea and Singapore are live, settled in USD. Check the Finance page in your dashboard for what is actually selectable for your account. Payouts to corporate accounts are not yet live, so if you operate under a company name, plan around that.
The payout fee is 1%, with a USD 10 minimum. That minimum makes small withdrawals very inefficient — withdrawing USD 100 costs USD 10, effectively 10%. Accumulate a reasonable balance before withdrawing.
The single most common question: does this consume the foreign-exchange quota?
No. Funds collected from overseas customers through a merchant of record and withdrawn to a mainland bank card or Alipay do not count against the annual USD 50,000 facilitation quota for individuals, and exceeding that figure does not stop you from collecting. They are separate channels.
Alipay payouts require a source declaration. Alipay's express collection flow asks for documentation evidencing the source of funds. Roughly these items:
- The clause establishing the two parties to the agreement
- The clause describing the service type, showing the platform sells as merchant of record
- The fee and pricing clause
- A screenshot of the platform's public fee page
- A screenshot of the payout record, to establish the actual amount
About five documents, covering three things: the parties, the service type, and the amount. If Alipay rejects it, switching to the bank card channel is an option.
Identity verification
The most common mistake: an 18-digit National ID is required, and passports are not accepted. Even if you hold a passport and use it for overseas business, verification needs the National ID. Verification must also be completed before payouts open — do not leave it until you have a balance to withdraw.
Several points trip people up:
- An 18-digit National ID is required; passports are not accepted. Even if you hold a passport and use it for overseas business, use the National ID here.
- Two name formats are required: your legal name in Chinese characters exactly as printed on the ID, plus the romanized form split into first and last name. They must correspond.
- Nationality is set to CN.
- Verification must be completed before payouts open. Do not leave it until you have a balance you want to withdraw.
Merchant review typically takes one to three business days, and is usually faster for non-AIGC categories.
Working around the lack of subscriptions
WeChat Pay does not support recurring charges. If your product is subscription-based, the mainland China line has to become a one-time annual or quarterly purchase. Overseas customers can still run normal card subscriptions — the two models operate in parallel.
WeChat Pay does not support recurring charges, which is a genuine obstacle for subscription products. The standard workaround:
Package the subscription benefit as a one-time purchase. Sell a year of access as a single annual product with no auto-renewal. Quarterly access works the same way.
The cost of this approach is that you lose the retention that auto-renewal provides, so you have to handle expiry reminders and win-back yourself. For the mainland market, it is often the only workable path today.
Also note: overseas customers can still run normal card subscriptions. The two models operate in parallel — one-time domestically, subscription internationally — and do not conflict.
If you are weighing whether to use one, start with the roles it actually takes on between you and your end customers.
Common mistakes
- Do not price in USD and expect mainland users to see RMB. If your core users are in China, price in CNY and remove the mental conversion step.
- Account for cross-border networking in your webhooks. If your server is in mainland China, requests sent from outside into a mainland network are unreliable — they may connect and then hang until timeout. Put the receiving endpoint on a machine reachable from outside and forward to your domestic backend.
- WeChat Pay in test mode does not actually open WeChat. You simulate success or failure directly. Do not assume the integration is broken.
- Do not price low-value products in USD on cards. The fixed per-transaction cost on international cards looks terrible at low price points.
Next steps
If you are evaluating whether to use a merchant of record, start with what we actually do as one, or go straight to pricing.
For specifics — whether your category will pass review, whether your pricing structure works — confirm the current position with the commercial team. Product capability is iterating continuously, and everything described here reflects the position as of October 2026.
This article is general information, not tax, legal, or financial advice. Tax rates and rules change; verify current requirements with the relevant authority or a qualified advisor before acting.
Frequently Asked Questions
Can I sell internationally without registering an overseas company?
Yes. This is the specific problem a merchant of record solves. The platform becomes the legal seller of your product, so it is the party that needs an entity, issues the invoice, and carries the tax obligation on the sale. You have a service relationship with the platform rather than a direct sales relationship with every end customer, which means no foreign incorporation and no VAT registration in each jurisdiction.
Does withdrawing merchant of record earnings use up the annual USD 50,000 foreign-exchange quota for individuals in mainland China?
No. Funds collected from overseas customers through a merchant of record and then withdrawn to a mainland bank account or Alipay do not count against the annual USD 50,000 facilitation quota for individuals, and exceeding that figure does not block collection. These are separate channels.
What identity verification is required for an individual in mainland China?
An 18-digit National ID number is required; passports are not accepted. You submit your legal name in Chinese characters exactly as it appears on the ID, alongside the romanized first and last name in Latin characters, with nationality set to CN. Verification must be completed on your profile before payouts can be enabled.
Can customers in mainland China pay with WeChat Pay?
Yes, WeChat Pay is supported. It runs on the platform's own acquiring qualification through an agreement with WeChat HK as a cross-border payment, so individual merchants do not need to apply for their own WeChat merchant account. Note that it currently supports one-time payments only, not recurring subscription charges.
My product is subscription-based and WeChat Pay cannot do recurring charges. What are the options?
The standard workaround is to package the subscription benefit as a one-time purchase — for example, selling a year of access as a single annual product with no auto-renewal. Overseas customers can still run on normal card subscriptions, so the two models operate in parallel rather than replacing each other.
How long does it take to receive the money?
Settlement runs on a T+10 business-day cycle, observing Hong Kong public holidays, and a payout can only be initiated after settlement completes. Withdrawals to a mainland bank account or Alipay carry a 1% fee with a USD 10 minimum, so accumulating a larger balance before withdrawing keeps the proportional cost down.
Waffo Pancake is a Merchant of Record platform for developers and solo founders — we handle global payments, tax, and compliance across 173 countries so you can focus on building. Our team writes these guides from hands-on payments and billing experience.
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