Laws of the People's Republic of China

Supplementary Circular of the Ministry of Foreign Trade and Economic Cooperation on Issue Concerning the Filing of Encouraged Enterprises with Foreign Investment in the Ministry of Foreign Trade and Economic Cooperation within the Power of Examination and Approval of Provincial Departments of Foreign Trade and Economic Cooperation

WaiJingMaoZiHan [2001] No.426 May 16,2001

According to the state laws and regulations on absorbing foreign investment and the relevant regulations of the State Council, on October 15, 1999 the Ministry of Foreign Trade and Economic Cooperation issued the Circular on Issue Concerning the Filing of Encouraged Enterprises with Foerign Investment in the Ministry of Foreign Trade and Economic Cooperation Which Are Examined and Approved by Local Authorities on their Own [WaiJingMaoZiFaZi [1999] No. 615] (hereinafter referred to as the No. 615 Circular). To further do better in this work, the following supplementary circular on some concrete matters is issued:

1.

The scope of business of encouraged projects not subject to national overall balance mentioned in the No. 615 Circular must comply with encouraged items in the Industrial Catalogue for Foreign Investment issued by the two commissions and one ministry of the State Council and the Superior Industrial Catalogue for Foreign Investment in the Central and Western Regions.

2.

According to the requirements set in the No. 615 Circular, provincial departments of foreign trade and economic cooperation must show the explanation that there is no need for national overall balance. The explanation shall be filled in according to the consolidated form (attached herewith) in the supplementary circular and affixed with the seals of provincial departments of foreign trade and economic cooperation.

3.

The filing matters include the following items:

(1)

Enterprises with Foreign Investment which are newly established through approval;

(2)

Changes in capital increase, share transfer and other articles of contracts and articles of association of enterprises with foreign investment established by the departments of foreign trade and economic cooperation at or below the provincial level, which are made by the original examining and approving organs;

(3)

Capital increase of enterprises with foreign investment (except for investment companies, joint-stock companies and other companies which comply with special regulations with regard to the procedures and power of examination and approval) established by the Ministry of Foreign Trade and Economic Cooperation on condition that the scope of business remains unchanged, which is made by the original examining and approving organs.

The above-mentioned filing matters shall conform to 1 of the supplementary circular and meet the relevant requirements of no need for national overall balance.

4.

After the Department of Foreign Investment of the Ministry of Foreign Trade and Economic Cooperation receives filing materials for examination and approval, if filing materials are incomplete, it shall notify units which apply for filing with the use of the notice on supplementing materials within two working days. If there are no objections to filing materials for examination and approval, units which apply for filing shall be notified with the use of the filing notice within 10 working days from the day complete filing materials are received. If there are objections, units which apply for filing shall be notified with the use of the notice on filing opinion within 10 working days from the day complete filing materials are received. Both the filing notice and the notice on filing opinion (hereinafter referred to as the notice) shall be affixed with the seal of the Department of Foreign Investment of the Ministry of Foreign Trade and Economic Cooperation, and the notice shall be presented to the competent customs while it is sent to units which apply for filing. The notice shall be sent through fax or letters. The provinces, municipalities and autonomous regions where conditions permit can send the notice through networking.

5.

The filed enterprises can go to the competent customs to handle formalities for exemption from import duties with the use of project confirmation letters issued by provincial departments of examination and approval and the photocopies of the filing notice and other documents mentioned in 4 of the supplementary circular.

6.

The filing materials shall be presented according to the provisions of 3 of the No. 615 Circular. All items of changes require the photocopies of approval certificates prior to changes in enterprises, and the items of capital increase and share transfer need the capital verification reports prior to capital increase and share transfer.

7.

If 4 and 5 of the No. 615 Circular do not conform to the circular, the latter shall prevail.The Supplementary Circular on Problems Concerning the Filing of Encouraged enterprises with foreign investment in the Ministry of Foreign Trade and Economic Cooperation within the Power of Examination and Approval of Provincial Departments of Foreign Trade and Economic Cooperation [WaiJingMaoZiErHan [2001] No. 263] shall be nullified from the day the supplementary circular is issued.

The supplementary circular is specially issued.

Attachment:

1.

The Explanation that there is No Need for National Overall Balance for Encouraged Enterprises with Foreign Investment within the Power of Examination and Approval of Provincial Departments of Foreign Trade and Economic Cooperation

2.

The Form of the Filing Notice

3.

The Form of the Notice on Filing Opinion

Attachment 1: The Explanation that there is No Need for National Overall Balance for Encouraged Enterprises with Foreign Investment within the Power of Examination and Approval of Provincial Departments of Foreign Trade and Economic Cooperation

__________________(name of enterprise) established through the approval of our department/committee is a foreign-funded enterprise which is encouraged by the state and which is not subject to national overall balance. The concrete information is as follows:

Organ of Examination and Approval________________

Date of Examination and Approval Month day, year

Approval Document Number:

Filing Matters (Marked with "¡Ì"):

¡õEstablished Enterprise ¡õIncreased Capital ¡õChanges (Share Transfer and Others)

Total Investment: US$ Increase in Total Investment:

Registered Capital: US$ Increase in Registered Capital:

Scope of Business:

Encouraged Items in the Industrial Catalogue for Foreign Investment:

The Explanation for No Need for National Overall Balance (Marked with "¡Ì"):

¡õThe capital for the project does not involve national overall balance

¡õThe land used for the project does not overstep the local power of examination and approval

¡õThe project does not involve import and export quotas and licenses

¡õThe project has no bearing on the national economy and the people's livelihood and the distribution of national productive forces

¡õThe project does not need examination and approval of the competent state departments according to regulations

(Seal of Provincial Department of Foreign Trade and Economic Cooperation)

Month day, year

Attachment 2: The Form of the Filing Notice

No.: 2001-0001

Committee/Department of Foreign Trade and Economic Cooperation:

The foreign-funded enterprise which applies for filing through the examination and approval of your committee/department _____________(approval document number:______________ ) has been put on file in the Department of Foreign Investment of the Ministry of Foreign Trade and Economic Cooperation.

The notice is specially issued.

The Department of Foreign Investment of the Ministry of Foreign Trade and Economic Cooperation (Seal)

Month day, year

Send copies to: Customs (Competent Customs)

Attachment 3: The Form of the Notice on Filing Opinion

Number:

Committee/Department of Foreign Trade and Economic Cooperation,

The foreign-funded enterprise which applies for filing through the examination and approval of your committee/department__________(name of enterprise):____________

¡õdoes not fall under the encouraged project

¡õdoes not involve national overall balance

¡õOthers:_____________________

Because of the above reasons, it is not put on file.

The notice is specially issued.

The Department of Foreign Investment of the Ministry of Foreign Trade and Economic Cooperation (Seal)

Month day, year