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Approval and Examination Procedures for Establishment of Foreign-invested Commercial Enterprises and Their Shop

Step 1:  Application for Establishment

An investor interested in establishing a foreign-invested commercial enterprise or a foreign-invested commercial enterprise interested in setting up shop should submit the required application documents to the provincial commerce authorities at the place where the foreign-invested commercial enterprise is registered.

Step 2:

The commerce department at the place of registration is responsible for examining and approving FIEs not involving a shop; for those involving a shop, the case should be referred to the provincial commerce department.

The provincial commerce department should, as from the day the documents are received, authorise the commerce department at the place where the shop is located to carry out commercial outlet examination and approval, and to grant approval for FIE establishment and issue the Approval Certificate for Foreign-invested Commercial Enterprises after the examination and approval procedure.

Provided that all the conditions are met and that the scope of business does not involve TV, telephone, mail-order, Internet, vending machines, books, newspapers, periodicals, refined oil products, pharmaceuticals or automobiles, applications from retail foreign-invested commercial enterprises for setting up shop in areas within the provincial jurisdiction of the place where they are located may be examined and approved by the respective provincial commerce authorities. The applications would then be reported to MOFCOM for the record.

Conditions:

  1. The business area of any single shop should not exceed 5,000 sqm and the number of shops not exceeding three, while similar shops set up by the foreign investor through its foreign-invested commercial enterprise across China should not total more than 30;
  2. The business area of any single shop should not exceed 3,000 sqm and the number of shops not exceeding five, while similar shops set up by the foreign investor through its foreign-invested commercial enterprise across China should not total more than 50.
  3. For single shops, the business area should not exceed 300 sqm.

Step 3:  Application for Registration

The investor should produce the Approval Certificate for Foreign-invested Commercial Enterprises and apply to the administration for industry and commerce for registration within one month upon receipt of the approval certificate.

Documents Required for Applying for Foreign-invested Commercial Enterprise Establishment:

Application letter; feasibility study report jointly signed by all the investors; contract and articles of association (contract only for foreign commercial enterprises) complete with appendices; bank credit reports, registration certificate (photocopy), proofs of statutory representatives (photocopy), and identification papers (for individual foreign investors only) for each of the investors; audit reports by accounting firms for the latest year on each of the investors; assessment reports on state assets for Chinese investors intending to enter into a Sino-foreign equity or contractual JV commercial enterprise; catalogue of import and export commodities of the proposed foreign-invested commercial enterprise; list of directors of the proposed foreign-invested commercial enterprise and appointment letters for directors from each of the investors; notification of pre-approval of enterprise name from the administration for industry and commerce; proofs of right to use the land on which the proposed shops are to be set up (photocopy) and/or tenancy agreement (photocopy) except for shops with a business area of less than 3,000 sqm; documents indicating compliance with urban development and urban commercial development requirements issued by the local commerce authorities at the places where the shops are to be set up.

Documents Required for Setting up Shops by Foreign-invested Commercial Enterprises:

Application letter; new contract and articles of association, if revised; feasibility study report on setting up shops; resolution of the board of directors to set up shops; audit report for the latest year by an accounting firm; credit report on the enterprise (photocopy); proofs of registration (photocopy) and proofs of statutory representatives (photocopy) from each of the investors; proofs of right to use the land on which the proposed shops are to be set up (photocopy) and/or tenancy agreement (photocopy) except for shops with a business area of less than 3,000 sqm; documents indicating compliance with urban development and urban commercial development requirements issued by the local government at the places where the shops are to be set up.

Content provided by Picture: HKTDC Research
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