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Commitments under CEPA -- Distribution services (1)
Latest Updated by 2004-02-18 19:54:12

Distribution services


WTO commitments or existing regulations on examination and approval

According to Proposed Regulations on Foreign-invested Commercial Enterprises: 1. Wholly-owned commercial enterprises are forbidden for the present; 2. The foreign party shall have solid economic strength, advanced business management experience and marketing techniques and extensive international sales networks and be able to promote Chinese product export. Its average commodity wholesale amount in the preceding 3 years shall exceed US$ 2.5 billion and the amount of its assets at the end of the preceding year shall exceed US$ 300 million; 3. The amount of assets of Chinese party at the end of the preceding year shall exceed RMB 50 million; if the Chinese party is a commercial enterprise, its average RMB 300 million. If it is a foreign trade enterprise, its preceding 3 years shall exceed US$ 50 million; 4. The minimum registered capital of a joint venture commercial enterprise engaged in wholesale business shall be RMB 80 million (RMB 60 million for the Central and Western region); 5. Investment of the Chinese party shall exceed 51%; 6. The operation period shall not exceed 30 years.

Commitments under CEPA

1. Hong Kong service suppliers are allowed to provide, in the form of wholly-owned operations, commission agent’s and wholesale trade services in the Mainland without geographic restriction (but books, newspapers, magazines, pharmaceutical products, pesticides, mulching film, chemical fertilizers, processed oil and crude oil remain subject to Mainland’s commitments to members of the World Trade Organization). 2. The average annual sales value of a Hong Kong service supplier in the preceding 3 years shall be no less than US$ 30 million (US$ 20 million for the Central and Western Region); the asset in the preceding year shall be no less than US$ 10 million; 3. The minimum registered capital is RMB 50 million (RMB 30 million for the Central and Western region).

Examination and Approval procedure

After acceptance, preliminary examination and consent by local Foreign Trade and Economic Cooperation Bureau, the application is submitted to Ministry of Commerce for examination and approval.

Special Materials to be Submitted for Examination and Approval

1. The balance sheet and profit and loss statement of the investing parties for the recent 3 years; 2. The bank credit certificates or asset appraisal reports of investing parties; 3. The commodity lines and import and export commodity catalogue of the enterprise to be established.


Editor: Catherine

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By: Source:South CN
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