Laws of the People's Republic of China

The Ministry of Foreign Trade and Economic Cooperation

Circular of the Ministry of Foreign Trade and Economic Cooperation on Issue of Reporting to the MOFTEC Conerning the Encouraged Category of Enterprise with Foreign Investment Aproved By Local Competent Authorities

WaiJingMaoZiFa [1999] No.615

October 15, 1999

Foreign trade and economic cooperation commissions of the various provinces, autonomous regions, municipalities directly under the Central Government and municipalities separately listed on the State plan:

According to the provisions of the Opinions on Further Encouraging Foreign Investment at the Present Period (Guofa [1999] No. 73), the setting up (the approved joint venture contract, the articles of association and appendix) of enterprises with foreign investment under the category of encouragement approved by the provinces themselves without the need of comprehensive balancing by the State, shall have to report for file to the Ministry of Foreign Trade and Economic Cooperation. Based on the laws and regulations of the State for attracting foreign investment, and the relevant rules for filing of enterprises with foreign investment distributed in 1988 by the Ministry of Foreign Trade and Economic Cooperation, the relevant issues are notified as follows:

1.

The establishment of enterprises with foreign investment of the encouraged category without the need of comprehensive balancing by the State, which is above the limit of approval power, shall be examined and approved by the departments of foreign trade and economic cooperation of the various provinces, autonomous regions, municipalities directly under the Central Government and municipalities separately listed on the State plan (hereinafter referred to as the local departments in charge of foreign trade and economic cooperation for short), and the examination and approval power shall not be handed over the lower levels at random.

2.

The local departments of foreign trade and economic cooperation should submit the relevant material for filing to the Ministry of Foreign Trade and Economic Cooperation on the date on which the contract and the articles of association are approved.

3.

Material needed to be submitted for filing:

(1)

Written reply to the feasibility study report;

(2)

Written reply to the contract and the articles of association (the contents should include: investment parties, investment form, total volume of investment, registered capital, investment proportion of all parties, form of funds invested, loans raised, business scope, production scale, proportion for overseas sale, operation duration and other items specially needed to reply; in case a technology introduction contract as the contract attachment is approved together with the contract, the name of the technology introduction contract should clearly be stated in the written reply);

(3)

Statement of no need for comprehensive balancing by the State produced by the local departments in charge of foreign trade and economic cooperation.

4.

The Ministry of Foreign Trade and Economic Cooperation shall inform the reporting unit within 2 work days after receiving the material for filing, confirming the receipt of the material and the completeness or not of the material received; should the Ministry of Foreign Trade and Economic Cooperation have different opinions about the project for filing, it shall reply in written form within one month from the date of receiving the material, and shall send copies to the State Administration for Industry and Commerce, the Customs General Administration, the State Administration of Foreign Exchange and the State Administration of Taxation.

5.

If the Ministry of Foreign Trade and Economic Cooperation has raised no different opinion about the establishment of the enterprise for one month following the date of receiving the material for filing, the local departments of foreign trade and economic cooperation may issue the approval certificate for enterprises with foreign investment. Projects of which the Ministry of Foreign Trade and Economic Cooperation has different opinions, no approval certificate shall be issued for them.

6.

The local departments of foreign trade and economic cooperation should fax, before the fifth of each month, a list of the encouraged enterprises for filing approved for the previous month to the Office of Foreign Investment Department of the Ministry of Foreign Trade and Economic Cooperation, and should confirm by telephone its delivery.

7.

The Foreign Investment Department of the Ministry of Foreign Trade and Economic Cooperation shall check the enterprises enlisted, and shall inform in time the reporting units and the departments of the Customs, foreign exchange and taxation of those projects the Ministry has received no material for filing from them. Enterprises without filing to the Ministry of Foreign Trade and Economic Cooperation or those whose filing are not endorsed, shall not be filed and registered with the departments for industry and commerce, the Customs and foreign exchange, or dealt with for other matters.

8.

The departments concerned of industry and commerce, the Customs and taxation shall accept registration and filing of the enterprises by the approval certificate for enterprises with foreign investment and other documents deemed necessary.

9.

Important alteration of the provisions of the contracts and the articles of association, and capital increasing of the existing enterprises with foreign investment under the category of encouragement and without involving comprehensive balancing by the State that are approved by the local departments of foreign trade and economic cooperation, shall be reported in accordance with the above mentioned provisions to the Ministry of Foreign Trade and Economic Cooperation for filing. Material for filing of capital increasing approved should be submitted in accordance with the relevant regulations.

10.

While reporting in written form to the Ministry of Foreign Trade and Economic Cooperation for filing as prescribed above, the local departments of foreign trade and economic cooperation shall have to send out by fax the relevant information and data for filing of the enterprises to the Foreign Investment Department as prescribed in the Notice On the Items Related with the Internet between the Local Departments of Foreign Trade and Economic Cooperation and the Foreign Investment Department of the Ministry of Foreign Trade and Economic Cooperation (WaiJingMaoZiZongHanZi [1998] No.521). Nationwide filing on net will be implemented as conditions are ripe.