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Procedures for Establishing Enterprises with Foreign Investment in China

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Procedures for Establishing Chinese-Foreign Equity Joint Ventures(EJV), Chinese-Foreign Cooperative Joint Ventures (CJV) and Wholly Foreign Owned Enterprises (WFOEs) 

1. Project verification and approval

Joint ventures and cooperative joint ventures established within China’s territory must be able to promote the development of China’s economy and the improvement of the science and technology for the benefit of socialist modernization. Businesses and industries in which the establishment of joint ventures is encouraged, prohibited or restricted by the State shall be decided in accordance with provisions of the State in the Regulations on Foreign Investment Guidelines and the Guideline Catalogue of Foreign Investment Industries. If the investment project is subject to verification and approval, the application for verification and approval procedures should be submitted to the development and reform department, and the relevant documents should be applied from the relevant department of urban and rural planning, land resources, environmental protection based on the actual situation of the project.

2. Name Preregistration

Application for company name preregistration should be submitted to the administration for industry and commerce. Then the “Notification of Company’s Name Pre-Approval” will be issued.

3. Examination and Approval of the Contracts and Articles of Association

Applying and Obtaining the Certificate of Approval for the Establishment of Enterprises with Foreign Investment. Upon the approval of the project, the Chinese investor(s) shall submit the contract and articles of association and other legal documents to the examination and approval authority (commerce departments). The examination and approval authority shall decide to approve or not the establishment of the EJV within 90 days (or the establishment of the CJV within 45 days) upon receiving the feasibility study report, contract, articles of association and other documents. Upon approval, the commerce department will issue a certificate of approval.

4. Applying and Obtaining the Business License

Upon obtaining the certificate of approval for the establishment of enterprises with foreign investment, the Chinese and foreign investors shall register at and obtain the business license from the industry and commerce administration departments within 30 days. The signing date of the business license is regarded as the date of establishment of the EJV/CJV.

5. Other formalities

WFOEs shall go through other registration formalities at relevant departments within 30 days upon obtaining the business license. For example, to open a foreign exchange and RMB account at a bank; to register at the tax authority, customs, foreign exchange administrative department, etc.

One-Stop Examination and Approval Services

To facilitate the examination and approval procedures for Chinese and foreign investors and to improve the government efficiency, many local governments summon commerce and other relevant departments to provide One-Stop Examination and Approval Services by handling matters concerning foreign investment in a centralized manner. All provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan have established Foreign Investment Service Centers to provide one-stop services for foreign investors.

The services provided include the following:

(1) At the earlier stage, the Center can help foreign investors select partners and sites, prepare project proposals and submit them, register the enterprise’s name, prepare the feasibility study report, draft contracts and articles of association, and apply for a business license;

(2) At the mid-stage, it can help foreign investors handle construction-related procedures, e.g. planning and design, engineering construction, land use, environmental protection, fire protection, and utilities;

(3) At the later stage, it can help foreign investors recruit employees and provide relevant information and other services. In addition, consulting firms, law firms, accounting firms and other intermediary agencies can also provide investors with efficient and effective services.

Source: Invest in China, Ministry of Commerce of People’s Republic of China

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