5 Feb 2015
Online CBA: How does a Foreign Company Set up a For-Profit Training Institution in the Shanghai Free Trade Zone?
Q: How does a Foreign Company Set up a For-Profit Training Institution in the Shanghai Free Trade Zone?
A: According to the Interim Measures of the China (Shanghai) Pilot Free Trade Zone for Administration of Establishment of Sino-Foreign Cooperative Joint Venture For-Profit Training Institutions (Interim Measures), foreign investors intending to set up a for-profit training institution in the China (Shanghai) Pilot Free Trade Zone (Shanghai FTZ) must do so in the form of Sino-foreign cooperative joint venture. Both the Chinese and foreign parties to the joint venture should have experience in investing and operating education and training institutions.
The establishment of cooperative training institutions can be divided into the two phases of preparation and formal operation.
In applying to establish a cooperative training institution, one should first apply for pre-approval of the name of the joint venture with the FTZ Branch of the Shanghai Administration for Industry and Commerce. The next step is log on to the “One-Stop Services for Investment” (Chinese) page of the Shanghai FTZ website and prepare application materials as required by the education administration department or human resources and social security department. At the same time, the filing of the application and the submission of application materials should also be carried out through the “Centralised Application Processing” window of the FTZ Branch of the Shanghai Administration for Industry and Commerce website. The FTZ Branch of the Shanghai Administration for Industry and Commerce will immediately forward the application materials to the Shanghai FTZ Administrative Commission.
On receiving the above application materials, the Shanghai FTZ Administrative Commission will, within 10 working days, consult the education administration department or the human resources and social security department for their opinions. It will then inform the investor of the results of the consultation and also post such results on the Shanghai FTZ website.
Based on the opinions that agree to the setting up of the training institution, the applicant will complete relevant formalities according to the Centralised Application Processing procedures for foreign companies on the Shanghai FTZ website. If all application materials are in order and duly submitted, the applicant can collect its licence through the Centralised Application Processing window within 10 working days.
Upon obtaining its approval certificate and business licence, the cooperative joint venture should start making preparations for the training institution in accordance with the authorised business scope, though no recruitment of students is allowed at this preparation stage.
Within six months from the date it has been granted permission to set up, the cooperative joint venture should apply for changes in business scope (if any) and official opening of business with the FTZ Branch of the Shanghai Administration for Industry and Commerce and submit relevant materials such as the capital verification report for funding the institution.
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