Laws of the People's Republic of China

Circular of the Ministry of Commerce on the Pilot Work concerning the Examination and Approval of Overseas Investments

Shang He Zi [2003] No. 16 April 28, 2003

The foreign trade and economic cooperation commissions (departments or bureaus) of Beijing City, Tianjin City, Shanghai City, Jiangsu Province, Zhejiang Province, Ningbo City, Fujian Province, Xiamen City, Shandong Province, Qingdao City, Guangdong Province and Shenzhen City,

In order to accelerate the "going global" strategy and encourage the relatively advantageous enterprises of various type of ownership to make investments abroad, this Ministry has carried out a pilot reform, namely decentralizing the power to examine and approve outbound investments and streamlining the outbound investment examination and approval formalities in Beijing City, Tianjin City, Shanghai City, Jiangsu Province, Shandong Province, Zhejiang Province, Guangdong Province, Fujian Province, Qingdao City, Ningbo City, Shenzhen City and Xiamen City. In order to do well the pilot work, find the problems and summarize the experience in time, you are hereby notified of the items as follows:

1.

In accordance with the requirements of pilot documents, the foreign trade and economic cooperation administrative department of each pilot province or city (hereinafter referred to as the local administrative department) shall do the examination and approval, archival filing and statistical work involving the overseas enterprises in an earnest manner. With the approval from a local administrative department of setting up an overseas enterprise (institution), an Archival Filing Form of Overseas Enterprises (Institutions) Applying for an Approval Certificate (for specimen, see the Annex) shall be filled out and an official seal shall be affixed to it. An approval certificate shall be fetched by the applicant from (the Cooperation Department of) this Ministry upon the strength of the Archival Filing Form and the reply of the local administrative department. After the on-line certificate issuance conditions are mature, the approval certificates shall be issued by the local administrative department on behalf of this Ministry.

2.

For the purpose of keeping updated of the new situations happening in the outbound investments of China, when an applicant makes an application for an approval document for merger, procuring (exchanging) shares, getting listed abroad, setting up an investment and holding enterprise or institution abroad, or setting up a development zone or research center abroad, besides an archival filing form and the reply of the local administrative department, it shall report to this Ministry a complete set of application materials which it reports to the local foreign trade and economic cooperation administrative department.

3.

In the reply to an enterprise, a local administrative department shall make a clear requirement for the enterprise to register in the economic and commercial office of the Chinese embassy or consulate based abroad, participate in the joint annual inspection on overseas investments in time and carry out the foreign exchange register formalities in time. Any equity of any overseas enterprise may not be possessed in the name of an individual. Under any special situation, if actually necessary to hold such equity in the name of an individual, the entrusted agreement shall be reached by notary at home and abroad in accordance with the related provisions.

4.

Any local administrative department may not grant the power of examining and approving overseas investments to any inferior entity without permission of this Ministry.

5.

All pilot entities shall make a brief summary on the pilot work by the end of each quarter and give a report concerning the problems, opinions or suggestions on the pilot work to (the Cooperation Department of) this Ministry in time.

Appendix:

Archival Filing Form of Overseas Enterprises (Institutions) Applying for an Approval Certificate

　　Seal of Entity: Date of Filing: Monetary

Unit: (USD 10, 000)

　　Notes:

　　1. The Archival Filing Form may be printed by any entity in accordance with this format.

　　2. The words as follows shall be filled in the column "Industry in which the overseas enterprise falls", the import & export, transportation, tourism, project contracting, research and development, consulting, machinery manufacturing, electronics and household appliances, light industry, textiles, clothing processing, agricultural development, oil resource development, mineral resource development, smelting, fishery, real estate development as well as investment and controlling shares.

　　3.Only the contents as follows shall be filled in the column "Overseas Institution", the name, address, sponsor, business scope, workers assigned abroad as well as approval document.

　　4. The contents filled in the archival filing form shall be genuine, accurate and complete and shall be consistent with those in the approval document.

　　5. The archival filing form shall be valid after bearing the official seal of the local foreign trade and economic cooperation administrative department.