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Commitments under CEPA -- Distribution services (2)
Latest Updated by 2004-02-18 19:55:25


WTO commitments or existing regulations on examination and approval

According to Proposed Regulations on Foreign-invested Commercial Enterprises: 1. The annual average commodity sales amount of the foreign investor in the preceding 3 years shall exceed US$ 2 billion and the amount of its assets at the end of the preceding year shall exceed US$ 300 million; 2. The minimum registered capital of a retailing enterprise shall be RMB 50 million (RMB joint venture adopts chain operation and has more than 3 branches, the proportion of the equity owned by the Chinese party shall exceed 51%. In case that it has less than 3 branches, the shareholding of the Chinese party shall be no less than 35%.

Commitments under CEPA

1. Hong Kong service suppliers are allowed to set up wholly-owned retail commercial enterprises in the Mainland. 2. The average annual sales value of a Hong Kong service supplier in the preceding 3 years shall be no less than US$100 million; the minimum asset in the previous year is US$ 10 million. 3. The minimum registered capital for setting up a retail commercial enterprise in the Mainland is RMB 10 million (RMB 6 million for the Central and Western region). 4. Hong Kong service suppliers are allowed to set up retailing enterprises in cities at the county level in Guangdong Province. 5. Hong Kong service suppliers are allowed to set up wholly owned retailing enterprises in the Mainland for sale of motor vehicles, with more than 30 outlets remaining subject to Mainland’s commitments to members of the World Trade Organization. 6. Hong Kong permanent residents with Chinese citizenship are allowed to set up individually owned stores in Guangdong to provide retailing services excluding franchising operation, without being subject to the approval procedures applicable to foreign investments. The sales area of such stores should not exceed 300 square meters.

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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