Laws of the People's Republic of China

Ministry of Commerce, General Administration of Customs, State Administration of Taxation, State Administration of Foreign Exchange

Order of the Ministry of Commerce, the General Administration of Customs, the State Administration of Taxation, and the State Administration of Foreign Exchange

No. 3

The "Administrative Measures for the Establishment of Foreign Funded Export Procurement Centers", which were examined and passed at the 5th executive meeting of the Ministry of Commerce of the People's Republic of China on September 29, 2003, are hereby promulgated and shall come into force after 30 days as of the date of promulgation.

Minister of Commerce, Lv Fuyuan

Director General of the General Administration of Customs, Mu Xinsheng

Director General of the State Administration of Taxation, Xie Xuren

Director General of State Administration of Foreign Exchange, Guo Shuqing

November 17, 2003

Administrative Measures of the Ministry of Commerce, the General Administration of Customs, the State Administration of Taxation, and the State Administration of Foreign Exchange for the Establishment of Foreign Funded Export Procurement Centers

Article 1

The present Measures are developed in the light with the laws and regulations of the People's Republic of China on overseas investments and foreign trade administration in order to further facilitate the expansion of foreign trade, to enhance the opening to the outside world and to attract overseas investments. Foreign investors who invest to establish foreign-funded export procurement centers in China shall abide by the present Measures.

Article 2

A foreign-funded export procurement center mentioned in the present Measures refers to a foreign-funded enterprise engaging in export procurement, which is established by a foreign investor in China either in the form of a wholly owned enterprise or a joint venture with a Chinese investor. The export procurement center shall be a limited liability company.

Article 3

A foreign investor who applies to establish a foreign-funded export procurement center shall have a transnational sales network and the capacity of export procurement.

The Chinese investor who engaged in a joint venture foreign-funded export procurement center shall have good credit standing, and necessary economic strength for the establishment of the procurement center.

Article 4

The registered capital of a foreign-funded export procurement center shall be no less than 30 million Yuan (RMB). Chinese and foreign investors shall contribute their investments according to the relevant existing regulations.

Article 5

A foreign investor may invest to establish an export procurement center in the name of the investment company it has established in China.

Article 6

Those who intends to establish a foreign-funded export procurement center shall submit the following documents to the Ministry of Commerce for approval, before which they have to undergo preliminary examination and get permission from the competent authority of commerce of the province, autonomous region, municipality directly under the jurisdiction of the Central Government, or city directly under state planning where the foreign-funded export procurement center is to be established:

(1)

The application;

(2)

Registration document (photocopy) of each investor, the proof documents of their legal representative (photocopy), and the proof documents of qualifications;

(3)

The feasibility study report, and the articles of association (For a joint venture export procurement center, the joint venture contract shall be submitted at the same time);

(4)

A name list of the board of directors and their resumes;

(5)

A notice on pre-approval of the enterprise's name, which was issued by the administration for industry and commerce.

The Ministry of Commerce shall, within 30 working days after all the application documents are received, make a written official reply on whether the application will be approved.

Article 7

A foreign-funded export procurement center may operate businesses as follows:

(1)

Procuring domestic goods for export, and providing warehousing, information consulting and providing technical services related to export;

(2)

Importing raw and auxiliary materials, and entrusting other enterprises to carry out processing and re-export;

(3)

Importing and procuring samples which are essential in export. The quantity and the value of the imported samples should comply with the relevant regulations of the customs on import of samples.

Article 8

As for the export commodities under the state's quota or permit administration, the quota or permit must be applied for and obtained in the light with the relevant regulations of the state. The commodities under bid invitation administration of the state upon quota must, prior to the procurement or export, be subject to bid invitation of commodities for export according to the relevant regulations on bid invitation of commodities for export.

Article 9

A foreign-funded export procurement center shall abide by the existing regulations administration of foreign exchanges when it opens a foreign exchange account or makes collections or payments of foreign exchanges,.

Article 10

The tax refund of a foreign-funded export procurement center which is located out of a bonded zone shall refer to the relevant regulations for overseas investment companies to export domestic products. A foreign-funded export procurement center located within a bonded zone shall apply for tax refund according to the relevant existing provisions for intra-bonded zone enterprises to export products.

Article 11

A foreign-funded export procurement center shall run the business of import, processing and re-export by referring to the relevant regulations concerning the same kind of business operated by joint venture companies engaged in foreign trade. In this case, all products must be exported, and shall generally not be sold in domestic market. In the case that the goods are unable to be exported and need to be sold in domestic market under any particular circumstance, the said center shall go through the procedures for transforming export into domestic sale according to the related regulations on processing trade, submit related documents to the local department of commerce at the provincial level for approval and issuance of approval document for domestic sale; and shall meanwhile, report to the Ministry of Commerce for archival purposes. In the case that an import permit is involved, the said center shall apply for the import permit according to the regulations; If the import permit needs to be submitted to the Ministry of Commerce for verification and approval, the procedures shall be carried out in the accordance with the existing provisions.

The customs shall be in charge of the matters of domestic sale with duties duly paid and release upon verification involving the above mentioned domestically sold products upon strength of the corresponding approval document for domestic sale and the effective import permit.

Article 12

Unless otherwise prescribed, the investors from Hong Kong Special Administrative Region, Macao Special Administrative Region, and Taiwan Region who intend to invest to establish export procurement centers in other regions of China may refer to the present Measures.

Article 13

The authority to interpret the present Measures shall remain with the Ministry of Commerce, the General Administration of Customs, the State Administration of Taxation, and the State Administration of Foreign Exchange.

Article 14

The present Measures shall go into effect after 30 days as of the date of promulgation.