No.2, 2002 (Total
) Feb. 20th, 2002
Edited by Haworth & Lexon
Special Issue for Foreign Investment Law
★ Foreign Investment has further opened in the fields of film, audiovisual products
★ As Regulations on the Management of Travel Agencies and correlative enforcement regulations were revised, foreign-invested travel agencies obtained access.
★ Regulations on the Management of Foreign-invested Telecommunication Enterprises came into effect on Jan. 1st
★ As Regulations on the Management of Financial Institutions, Regulations on the Management of Insurance Companies” came into effect on Feb.1st .2002, financial and insurance business have opened to the outside world.
★ Foreign-invested international freight agent has new regulations.
★ Foreign-invested enterprises in the WaiGaoqiao FTZ may set up working institutions out of the zone.
Foreign Investment has further opened in the fields of film, audiovisual products, and publishing.
.2002.The regulations ha defin
Regulations on the Management of Film
Foreign services suppliers are permitted to produce film in the form of contractual joint venture, but Chinese sides should be film studios. Chinese sides must apply to relevant governing institutions of the State Council in advance, and then both sides sign the contract on producing film. Organizations and individuals mustn’t engage in the activities of producing film independently.
Foreign services suppliers are permitted to construct and/or renovate cinema in the form of joint venture or contractual joint venture, and specific matters are regulated separately.
Regulations on the Management of Publishing
Joint venture, contractual joint venture and wholly foreign-owned enterprises are permitted to engage in the distributing business of book, newspaper, magazines, and specific matters are separately stipulated by the regulatory authorities.
Regulations on the Management of Audiovisual Products &
on the Management of Contractual Joint Venture Distributing Audiovisual Products
At present, foreign services suppliers are permitted to engage in the distributing business (including wholesale, retail
1.Both sides should be innocent within 3 years before application; the contractual joint venture should be independent
person; Chinese investment in contractual joint venture should be no less than 51 percent; Cooperative term should be no more than 15 years.
2.The contractual joint venture mustn’t engage in the business on import of
apply to engage in chain business , or operate by means of information network, they must formalities separately.
Regulations on the Management of Travel Agencies and correlative Enforcement Regulations
Regulations on the Management of Travel Agencies and correlative enforcement regulations were revised by the State Council and
which came into effect on Dec.11th 2001 and Dec.26th .2001 .The regulations have defin the establishing registered investment proportion and business scope on foreign-invested travel agencies
1.Establishing conditions: qualifications for foreign tour operator:
travel Agency or engage mostly in the business of tour operation business; At least US$ 40 million’s annual income; A member of native Tourism Association. Chinese side directly appl to CNTA to set up foreign-invested travel agencies.
should be RMB 4 million, and investment proportion are separately stipulated by the regulatory authorities. According to China's accession to the WTO, the minimum registered capital is RMB 2.5 million within 3 years after accession. So regulations provide that RMB 4 million may be adjusted, the term will be separately regulated.
3.Business scope: foreign-invested travel agencies are permitted to engage in the business of ingress tour and domestic tour, but not to engage in the activities of Chinese traveling abroad and to Hong Kong
, Macao and Chinese Taipei.
According to above regulations, foreign-invested travel agencies mustn’t set up in the form of wholly foreign-owned
set up any branches. According to China's accession to the WTO: within 3 years after accession, foreign investment may hold controlling shares in the joint venture; within 6 years after accession, wholly foreign-owned travel agencies may be established.
Besides, the regulations provide that foreign travel agencies may set up permanent
engage in the nonprofit-making such as tour consultation, liaison, publicity, etc.
Regulations on the Management of Foreign-invested Telecommunication Enterprises
Regulations on the Management of Foreign-invested Telecommunication Enterprises” was promulgated by the State
which came into effect on Jan.1st .2002.
1.Foreign-invested telecommunication enterprises are permitted to establish only in the form of joint venture.
2.According to different geographic range for operating business, minimum registered capital is regulated separately: within the range of nation or across Province,
, and unicipality , minimum registered capital for basic services RMB 2,000 million and RMB 10 million; within the range of Province, unicipality
3.Foreign investment proportion：For basic services（ex wireless call business, foreign investment should be no more than 49 percent; For value-added services（including wireless call business, foreign investment should be no more than 50 percent.
Regulations of the People’s Republic of China on the Management of Foreign-funded Financial Institutions
Regulations of the People’s Republic of China on the Management of Foreign-funded Financial Institutions” and its enforcement regulations were amended by the State Council and People's Bank of
came into effect on Feb . 1st, 2002. The new regulations embody the Chinese accession commitments, principle of prudential custody, international usage of bank custody, principle of custody on home and foreign currency, and pay attention to the join of custody policy on -funded & foreign-funded financial institutions.
By the end of 2001, China has further opened accession conditions for foreign-funded financial institutions. According to above new regulations, People's Bank of China has already accepted the application that foreign-funded financial institutions broaden business
areas in China.
Regulations of the People’s Republic of China on the Management of Foreign-invested Insurance Companies
1.Foreign-invested insurance companies
2.The regulations provide the minimum limitation of registered capital for joint venture and wholly foreign-owned, operating funds for branches of foreign insurance companies
as well as establishing conditions for a foreign insurance that applies to establish a foreign-invested insurance company.
3.Foreign-invested insurance companies are permitted to operate the business on property insurance or person insurance, but not concurrently; Foreign-invested insurance companies are permitted to operate the business such as insurance of
commercial risks, master policy insurance, and to engage in reinsurance.
Regulations of the People’s Republic of China on Foreign-invested International freight Agencies
Regulations of the People’s Republic of China on Foreign-invested International freight Agencies ”was promulgated by the Ministry of Foreign Trade & Economic
MOFTEC), which came into effect on Jan. 1st, Foreign-invested International freight Agencies may be established in the form of joint venture, contractual joint venture and wholly foreign-owned. Specific matters as following:
1.At present, the proportion of Chinese investment should be no less than 50 percent in the joint venture and contractual joint venture. Regulations
will be separately promulgated by the
2.Qualifications for foreign side as following：Be innocent within 3 years before application; At least there is
has engaged in freight Agency over 3 years, which is the in foreign side.
3.Minimum registered capital should be US$ 1 million. Regulations provide that the agency may
apply to set up branches after
Notification on Foreign-invested Enterprises in WaiGaoqiao FTZ Setting Up Branches
notification of the came into effect on Jan. 4th, 2002.
1.Foreign-invested enterprises in WaiGaoqiao FTZ may set up nonprofit-making working institutions out of the zone, and they are only permitted to engage in
scope of parent
2.To the foreign-invested enterprises in WaiGaoqiao
set up working institutions out of the zone, they don’t enjoy preferential taxation policy for the enterprises in the zone.
3.When Foreign-invested enterprises in the zone set up working institutions out of the zone,
foreign currency open . Income recorded in the account of working institutions must be appropriate money of parent companies, which only limit to reasonable office outlay for working institutions
4.Any profit-making branches are not permitted to set up out of the zone.