Laws of the People's Republic of China

the Ministry of Commerce

Opinions of the Ministry of Commerce concerning relevant Issues on the Application for Extension Filed by Foreign-Capital Enterprises

Shang Fa Han [2004] No.71

The departments in charge of commerce of all provinces, autonomous regions, municipalities directly under the central government and cities directly under state planning:

Whereas it is common in practice how to deal with the problem that the foreign-capital enterprises beyond the legal time limit file an application for extending the period of operation, in order to carry out the original ideas in legislation correctly, and ensure the stable operation of foreign-capital enterprises, now the Ministry of Commerce brings forward the opinions of solving this problem, and please implement it accordingly.

1.

In accordance with Article 13 of the Law of the People's Republic of China on Chinese-foreign Equity Joint Ventures, Article 24 of the Law of the People's Republic of China on Chinese-Foreign Contractual Joint Ventures, Article 20 of the Law of the People's Republic of China on Foreign-capital Enterprises, and the relevant provisions of the Administrative License Law of the People's Republic of China, where the enterprise with foreign investments needs to extend the period of operation, it shall apply to the examination and approval authorities before 180 days prior to the expiration of the period of operation (hereinafter referred as the "prescribed time limit").The examination and approval authorities shall make the decision of approval or disapproval within 30 days from the date of receiving the application; where no decision is made at the expiration of the enterprise' period of operation, the extension shall be deemed to have been approved.

2.

Where the enterprise with foreign investments applies for extending the period of operation later than the "prescribed time limit", the examination and approval authorities shall make disposals on the basis of the following principles:

(1)

Where the enterprise submits the application before 30 days prior to the expiration of period of operation (including 30 days), the examination and approval authorities may accept its application.

(2)

Where the enterprise submits the application within 30 days ahead of or after the expiration of period of operation, the examination and approval authorities shall not accept its application, except in cases caused by force majeure.

3.

The extension application shall conform to the following conditions:

(1)

The total investors make unanimous consent of extending the period of operation after the expiration of the period;

(2)

The enterprise' board of directors makes consent decision of extending the period of operation after the expiration of period;

(3)

Application shall, when it is submitted, subject to the relevant laws, regulations and industry policies governing the use of foreign capital.

The Ministry of Commerce of PRC

November 11, 2004