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CHINA FOREIGN INVESTED COMPANY
FOREIGN INVESTED COMMERCIAL ENTERPRISE

FOREIGN INVESTED COMMERCIAL ENTERPRISES
REGISTRATION APPLICATION PROCEDURES

(I) Application Procedures and Time Limits for Review and Approval (where applications are examined and approved by Provincial Governments)

1. General Commodity Distribution

Application Procedures

(1) In cases where a new commercial (distribution) enterprise is applied for, or an already existing enterprise applies for additions to distribution scope, or an enterprise reinvests to become a commercial (distribution) enterprise, the applicant shall make the required submissions to a competent commerce authority of where the FIE is registered;

(2) The competent commerce authority of where the FIE is registered shall conduct a preliminary review of the submissions before forwarding them to a provincial commerce authority;

(3) The provincial commerce authority examines and reviews the contract of a Chinese-foreign joint-equity or contractual enterprise and its articles of association (only the articles of association is needed in the case of a foreign invested commercial enterprise) and the submissions, and whether the proposed enterprise or outlets comply with the urban commercial network planning;

(4) In the event that the location of where the enterprise operates and where the FIE is registered do not fall under the jurisdiction of the same province, autonomous region, municipality or city under direct state planning, the competent provincial commerce authority of where the FIE is registered shall seek the consent of its counterpart of where the FIE operates whilst examining the submissions;

(5) In the case of a centrally managed enterprise intends to establish a commercial FIE with a foreign investor (foreign investors) in the form of a joint equity or contractual venture, the application which is within provincial approval mandate, shall be reviewed and approved by a competent provincial commerce authority in accordance with the preceding procedures, with a notification made to the Ministry of Commerce for record-keeping.

Time Limit for the Review and Approval

Within 3 months of receipt of the complete set of application submissions, a competent provincial commerce authority shall reach a decision as to whether or not approved the application. In the case of an affirmative decision, the FIE Approval Certificate will be issued. In the case of a negative decision, a statement justifying the decision shall be provided.

2. Special Commodity Distribution

Application Procedures

Distribution of Audiovisual Products (Excluding Wholesaling)

(1) The Chinese partner shall make an application to a competent provincial cultural authority, requesting approval to file the application;

(2) Within 6 months of the approval of the competent provincial cultural authority of the filing of the application, the Chinese partner shall make an application to a competent provincial commerce authority for approving the establishment of an enterprise.

(3) Within 30 days of receipt of the FIE Approval Certificate from a competent commerce authority, the Chinese partner shall claim the Permit for Distribution of Audiovisual Products for the proposed China-foreign contractual audiovisual product distribution enterprise from the competent cultural authority against the acceptance document issued by a competent cultural authority and the FIE Approval Certificate.

(4) Within 30 days of receipt of the Permit for Distribution of Audiovisual Products from a competent cultural authority, the Chinese partner shall proceed to registration against the Permit and FIE Approval Certificate.

Time Limit for the Review and Approval

Within 30 working days of receipt of the complete set of application submissions, a competent provincial commerce authority shall reach a decision as to whether or not approved the application. In the case of an affirmative decision, the FIE Approval Certificate will be issued. In the case of a negative decision, a statement justifying the decision shall be provided.

(II) Application Procedures and Time Limits for Review and Approval (where applications are examined and approved by MOFCOM)

1. General Commodity Distribution

Application Procedures

(1) In cases where a new commercial (distribution) enterprise is applied for, or an already existing enterprise applies for additions to distribution scope, or an enterprise reinvests to become a commercial (distribution) enterprise, the applicant shall make the required submissions to a competent commerce authority of where the FIE is registered;

(2) The competent commerce authority of where the FIE is registered shall conduct a preliminary review of the submissions before forwarding them to a provincial commerce authority;

(3) The provincial commerce authority examines and reviews the contract of a Chinese-foreign joint-equity or contractual enterprise and its articles of association (only the articles of association is needed in the case of a foreign invested commercial enterprise) and the submissions, and whether the proposed enterprise or outlets comply with the urban commercial network planning;

(4) In the event that the location of where the enterprise operates and where the FIE is registered do not fall under the jurisdiction of the same province, autonomous region, municipality or city under direct state planning, the competent provincial commerce authority of where the FIE is registered shall seek the consent of its counterpart of where the FIE operates whilst examining the submissions;

(5) Upon an affirmative preliminary review result, the competent provincial commerce authority shall forward the submissions to MOFCOM for one-off approval;

(6) In the case of a centrally managed enterprise intends to establish a commercial FIE with a foreign investor (foreign investors) in the form of a joint equity or contractual venture, the application submissions may be directly made to MOFCOM for approval provided the application is within the approval mandate of MOFCOM.

Time Limit for the Review and Approval

After a preliminary review of the submissions, a competent provincial commerce authority shall forward the whole set of submissions within one month of receipt. MOFCOM, within 3 months of receipt of the complete set of application submissions, MOFCOM shall reach a decision as to whether or not approved the application. In the case of an affirmative decision, the FIE Approval Certificate will be issued. In the case of a negative decision, a statement justifying the decision shall be provided.

2. Special Commodity Distribution

Application Procedures

(1) Auto Distribution
Pursuant to the Implementing Measures on the Management of Auto Brand Distribution, applications of FIEs whose business scope relates to auto distribution, including general dealership and brand dealership, shall be forwarded to the Ministry of Commerce after a preliminary review is conducted by a competent provincial commerce authority or centrally managed company. The Ministry of Commerce shall further examine the application and approve after seeking the opinion of the State Administration for Industry and Commerce.

In the case that a domestic auto producer farms outs the distribution side of its business to other legal entities, not only the approval from the Ministry of Commerce but also a further examination and approval from the former approval authority of the project is needed.

(2) Distribution of Processed Oil
In the case that the business scope of an FIE relates to the distribution of processed oil, the application shall be forwarded to the Ministry of Commerce for approval after a preliminary review is conducted by a competent provincial commerce authority or centrally managed company.

(3) Distribution of drugs
In the case of an application whereby the business scope of an FIE relates to the distribution of drugs, the competent provincial commerce authority shall seek the opinion of the drug supervisory administration of the same level or the enterprise applicant shall present an opinion issued by a competent drug supervisory administration endorsing the establishment of the enterprise or a drug distribution license. The application shall be forwarded to the Ministry of Commerce for approval after a preliminary review is conducted by a competent provincial commerce authority.

(4) Distribution of audiovisual products
a. An application for a Chinese-foreign contractual wholesaling enterprise for audiovisual products shall be filed with the Ministry of Culture for acceptance review after a competent provincial cultural authority concedes to accepting the application upon an examination.
b. Upon the acceptance of the Ministry of Culture to file the application, the Chinese partner shall make an application to the competent provincial commerce authority for the establishment of the enterprise. The application shall be forwarded to MOFCOM for approval after the provincial authority examines and approves it.

(5) Distribution of books, newspapers and periodicals
The applicant shall first make an application with a provincial press and publication administration, which, within 15 working days of receipt of the application, shall produce a review opinion, to be notified to the press and publication administration of the State Council for approval. The press and publication administration of the State Council shall, within 30 working days of receipt of the application with the review opinion, make a decision as to whether or not accept the application. The decision will be notified to the applicant via a press and publication administration of a province, autonomous region or municipality in writing. If an application is rejected, a statement justifying the decision has to be provided. Upon receipt of the acceptance notice from the press and publication administration of the State Council, the applicant shall make a formal application with a provincial commerce authority, which shall form a review opinion within 15 working days of receipt of the application, to be submitted to the commerce authority of the State Council for approval. Once the approval comes through, the applicant shall, within 90 days of receipt of the approval notice, claim the Permit for Distribution of Publications from a provincial press and publication administration against the approval documents and the FIE Approval Certificate. The applicant shall then claim its business license from the local administration for industry and commerce against the Permit and FIE Approval Certificate.

Time Limit for the Review and Approval

(1) Auto Distribution
After a preliminary review of the submissions, a competent provincial commerce authority shall forward the whole set of submissions within one month of receipt. MOFCOM, within 3 months of receipt of the complete set of application submissions, MOFCOM shall reach a decision as to whether or not approved the application jointly with the State Administration for Industry and Commerce (SAIC). In the case of an affirmative decision, the FIE Approval Certificate will be issued. In the case of a negative decision, a statement justifying the decision shall be provided.

(2) Distribution of Processed Oil
After a preliminary review of the submissions, a competent provincial commerce authority shall forward the whole set of submissions within one month of receipt. MOFCOM, within 3 months of receipt of the complete set of application submissions, MOFCOM shall reach a decision as to whether or not approved the application. In the case of an affirmative decision, the FIE Approval Certificate will be issued. In the case of a negative decision, a statement justifying the decision shall be provided.

(3) Distribution of Drugs
After a preliminary review of the submissions, a competent provincial commerce authority shall forward the whole set of submissions within one month of receipt. MOFCOM, within 3 months of receipt of the complete set of application submissions, MOFCOM shall reach a decision as to whether or not approved the application. In the case of an affirmative decision, the FIE Approval Certificate will be issued. In the case of a negative decision, a statement justifying the decision shall be provided.

(4) Distribution of Audiovisual Products
Within 60 working days of receipt of the complete set of application submissions, MOFCOM shall reach a decision as to whether or not approved the application. In the case of an affirmative decision, the FIE Approval Certificate will be issued. In the case of a negative decision, a statement justifying the decision shall be provided.

(5) Distribution of Books, Newspapers and Periodicals
Within 30 working days of receipt of the complete set of application submissions, MOFCOM shall reach a decision as to whether or not approved the application. In the case of an affirmative decision, the FIE Approval Certificate will be issued. In the case of a negative decision, a statement justifying the decision shall be provided.

Note: please refer to relevant regulations in the annexes for details

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