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Commitments under CEPA -- Distribution services (3)
Latest Updated by 2004-02-18 20:05:22

Foreign trade companies

WTO commitments or existing regulations on examination and approval

According to Provisional Regulations on Establishment of Sino-foreign Joint Venture Foreign Trade Companies: 1. A foreign trade company may only be established on joint venture basis. The percentage of shares held by the Chinese party shall be no less than 51% for the present; 2. The annual volume of trade with China of the foreign investor shall exceed US$30 million in the preceding 3 years (US$20 million for the Central and Western region). The shareholding of the foreign party shall exceed 25%; 3. The Chinese party shall have foreign trade rights and its annual average import and export amount shall exceed US$ 30 million in the preceding 3 years (US$20 million for the Central and Western region). 4. The minimum registered capital of the joint venture company shall be RMB 50 million (RMB 30 million for the Central and Western region).

Commitments under CEPA

1. Hong Kong service suppliers are allowed to apply for the setting up of foreign trade companies on a wholly-owned, equity joint venture, or contractual joint venture basis. 2. The average annual trade value of a Hong Kong service supplier with the Mainland in the preceding 3 years shall be no less than US$10 million (US$ 5 million for the Central and Western region). 3. The minimum registered capital of a foreign trade company is RMB 20 million (RMB 10 million for the Central and Western region).

Examination and Approval procedure

After acceptance, preliminary examination and consent by Shenzhen 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.


Commitments under CEPA

Hong Kong service suppliers are allowed to engage, in the form of wholly-owned operations, in franchising in the Mainland. The relevant laws and regulations will be promulgated separately.


Editor: Catherine

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