Haworth & Lexon Law Newsletter (98)-Law Bridge-Shanghai Law Firm/Lawyer

Haworth & Lexon Law Newsletter
No.2 2010 (Total:No.98) March.15th, 2010
Edited by Haworth & Lexon

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��Haworth & Lexon Law Newsletter �� is issued every month, mainly introducing the legal change in the fields of Corporate, Securities, Foreign investment, E-commerce, International trade etc. with necessary comment. All the comments do not mean the legal opinion of our firm and the firm does not have any legal liability for such comment. Should you have any interest in any topics or any questions please feel free to contact the firm. You will be expected to have satisfactory response from the professional attorney of our firm.

Guidelines:

Latest Laws and Regulations:

The Tort Law Has Been Promulgated.

Detailed Rules for Implementation of Patent Law.

Management Rules for Registration of Foreign Invested Partnership Enterprises, Management Measures for Setting up Partnership Enterprises by Foreign Enterprises or Individuals in China.

Circular of The Supreme People��s Court concerning Adjustment of Standards on the first-instance Intellectual Property Civil Cases of the Local People�� Court at all Levels.

Determination of the Standing Committee of National People��s Congress on Revisions to the Copyright Law of PRC.

Notice of the State Administration of Taxation about Several Tax Issues Concerning the Implementation of Enterprise Income Tax Law.

Notice of the State Administration of Taxation on Printing and Distributing the Administrative Measures for Assessing and Levying Enterprise Income Tax on Non-resident Enterprises.

Reply on the Disposition of Issues concerning the Closedown of Preferential Policies for Enterprise Income Tax of Foreign-funded Enterprises by the Government.

Opinions of the State Administration of Cultural Heritage, the Ministry of Civil Affairs, the Ministry of Finance, the Ministry of Land and Resources, the Ministry of Housing and Urban-Rural Development, the Ministry of Culture and the State Administration of Taxation on Promoting the Development of Private Museum.

Latest Laws and Regulations

The Tort Law Has Been Promulgated

Last Issue of the Newsletter briefly introduces the first four chapters of Tort Law, and this Issue is intended to give an introduction on other chapters.

Concerning products liability, the content of this chapter is mostly in unanimity with the previous laws and regulations, which request the manufacturer be liable for the damages caused to other persons due to the defect of the products, and the seller shall also be liable if he has fault or negligence in causing such damages. However, there is one difference that the punitive damages are provided. If one manufactures or sells the products in the circumstance he knows the defect, which causes death or damage to health of others, then the infringed shall be entitled to request punitive damages.

The Tort Law has express provisions on the liability of relevant issues with regard to the motor vehicle traffic accidents. The general principle is that if there is any damage caused by the motor vehicle traffic accident, the legal basis for determining the compensation liability is the relevant regulations in the Road Traffic Safety Laws. If the owner and user of the motor vehicle is not the same person and the liability of a traffic accident is attributed to the motor vehicle, the insurance company shall make compensation within the liability limit of the mandatory motor vehicle insurance, and the user shall be liable for any deficit of compensation; and the owner shall assume the corresponding compensatory liability if he has fault or negligence. If the motor vehicle is transferred but the registration for transfer of ownership is not completed, and the liability of a traffic accident is attributed to the motor vehicle, the insurance company shall make compensation within the liability limit of the mandatory motor vehicle insurance, and the transferee shall be liable for any deficit of compensation. But if the transferred motor vehicle is an illegally assembled motor vehicle or reaches the standard of retirement, the transferor and the transferee shall be liable jointly and severally. Where the driver of a motor vehicle flees after a traffic accident, the insurance company shall make compensation within the liability limit of the mandatory motor vehicle insurance; and the Social Assistance Fund for Road Traffic Accidents shall make the advance payment. After advances are made out of the Social Assistance Fund for Road Traffic Accidents, the governing body of the fund shall be entitled to be reimbursed by the person liable for the traffic accident.

Concerning the liability for medical malpractice, the principle of fault liability is stressed, which means where a patient sustains any harm during diagnosis and treatment, if the medical institution or any of its medical staff is at fault, the medical institution shall assume the compensatory liability. This chapter also provides the doctrine of presumption. When there is any of the following cases and the patient suffers any harm, the medical institution shall be presumed to have fault: (1) violating a law, administrative regulation or rule, or any other provision on the procedures and standards for diagnosis and treatment; (2) concealing or refusing to provide the medical history data related to a dispute; or (3) forging, tampering or destroying any medical history data. And the medical institution shall not be held liable under the following circumstances: (1) the patient or his close relative does not cooperate with the medical institution in the diagnosis and treatment in line with the procedures and standards for diagnosis and treatment; (2) the medical staff have fulfilled the duty of reasonable diagnosis and treatment in the case of an emergency such as rescue of a patient in critical condition; or (3) diagnosis and treatment of the patient is difficult due to the medical level at the time.

Environment pollution liability. Where any harm is caused by environmental pollution, the polluter shall assume the tort liability. It also provides the burden of proof principle on liability for environment pollution: where any dispute arises over an environmental pollution, the polluter shall assume the burden to prove that it should not be liable or its liability could be mitigated under certain circumstances as provided for by law or to prove that there is no causation between its conduct and the harm.

Doctrine of no-fault liability is provided for ultra-hazardous activity liability. For example, Where the possession or use of inflammable, explosive, acutely toxic, radioactive or any other ultra-hazardous materials causes any harm to another person, the possessor or user shall assume the tort liability; where any harm is caused to another person by an aerial, high pressure or underground excavation activity or by the use of high speed rail transport vehicle, the operator shall assume the tort liability. But if it could be proved that the harm is caused by the victim intentionally or by a force majeure, no liability shall be imposed; the victim is negligent for the occurrence of the harm, the liability of the possessor, user or operator may be mitigated.

Concerning the liability for harm caused by raising animals, where a raised animal causes any harm to another person, the keeper or manager of the animal shall assume the tort liability, but may assume no liability or assume mitigated liability, if it could be proved that the harm is caused by the victim intentionally or by the gross negligence of the victim. Where any harm is caused to another person by failure to take safety measures against an animal in violation of management rules, the keeper or manager of the animal shall assume the tort liability. Where any dangerous animal such as a fierce dog that is prohibited from keeping causes any harm to another person, the keeper or manger of the animal shall assume the tort liability. Where an abandoned or fleeing animal causes any harm to another person during the time period of its abandonment or fleeing, the original keeper or manager of the animal shall assume the tort liability.

Liability for harm caused by objects. Where any building, structure or facility or any thing laid thereon or suspended therefrom falls off or falls down, causing any harm to another person, if the owner, manager or user cannot prove that he is not at fault, he shall assume the tort liability. Where any building, structure or facility collapses, causing any harm to another person, the construction employer and contractor shall be liable jointly and severally. After making compensation, the aforementioned persons shall be entitled to be reimbursed by other liable persons if any. In addition, the doctrine of presumption of liability shall be applied where any harm is caused by the collapse of or a pile of objects or a broken tree.

Detailed Rules for Implementation of Patent Law

The State Council promulgated, on January 9, 2010, the decision on revised ��Detailed Rules for Implementation of Patent Law�� (��Detailed Rules��), which shall come into force from February 1, 2010. The Detailed Rules have had nine new provisions, deleted five provisions, and substantially revised 47 provisions, which are comprehensive revisions to the previous Detailed Rules.
The main revisions are as follows:

(1) Concerning the confidentiality review of patent when file an application in a foreign country. The Patent Law provides that where an entity or individual intends to file an application in a foreign country for patenting an invention or utility model accomplished in China, it or he shall report in advance to the patent administrative department of the State Council for confidentiality review. And thus the Detailed Rules have detailed provisions in two aspects: one is defining ��an invention or utility model accomplished in China�� as ��an invention or utility model whose material contents of the technical plan is accomplished in China��; another is the detailed provisions on confidentiality review procedures.
(2) The new Detailed Rules have clear definitions on the term of ��generic resources�� and ��inventions accomplished by using generic resources��, and provide the way to disclose the source information of the generic resources.
(3) The new Detailed Rules provide that five activities shall be deemed as activities of counterfeiting patents, for example: (i) labeling a patent mark on a product which has not been granted a patent or on the package thereof, continuing to label the patent mark on a product or its package after the patent right is invalidated or terminated, or using the patent number of another party on a product or on the package thereof without permission; (ii) selling any product described in Item (i); and etc. If lawfully labeling the patent mark, before termination of the patent right, on a patented product or a product which is directly manufactured according to the patented measures or the package thereof, the activity of promising to sell or selling such products shall not be deemed as counterfeiting patent. Where selling any product without having any knowledge about it, if it/he can prove the legal source of the product, the patent administrative department shall order it/him to stop its sale, but no pecuniary penalty shall be imposed.

(4) The new Detailed Rules also adopt the following four measures: (i) to reduce the application fees for suspension of procedures, mandatory license, and ruling on mandatory license fee and application for maintenance fee; (ii) to simplify and improve the procedures on application for patent, examination, authorization, re-examination and invalidity; (iii) to loosen the limits on priority right enjoyed by the parties concerned; (iv) to improve the system of reward and remuneration for service inventions. For the measures and amount of reward and remuneration, the agreement shall prevail. Meanwhile, the application scope for legal standards shall be extended to all entities from the previous state-owned enterprises and institutions, and the legal reward amount for the service inventors and designers is increased.

Management Rules for Registration of Foreign Invested Partnership Enterprises, Management Measures for Setting up Partnership Enterprises by Foreign Enterprises or Individuals in China

The Management Rules for Registration of Foreign Invested Partnership Enterprises (hereinafter, ��Management Rules��) were promulgated by the State Administration for Industry and Commerce on January 29, 2010, which shall come into force on March 1, 2010. Management Measures for Setting up Partnership Enterprises by Foreign Enterprises or Individuals in China (hereinafter, ��Management Measures��) were promulgated by the State Administration for Industry and Commerce on February 10, 2010 and shall be effective as of the date of promulgation.
The foreign invested partnership enterprises shall mean the partnership enterprise set up in China by two or more foreign enterprises or individuals, and the partnership enterprise set up in China by foreign enterprise or individuals and China individuals, legal persons and other organizations. The State Administration for Industry and Commerce shall be responsible for management of registration of foreign-invested partnership enterprise, and the enterprise registration organ shall be responsible for reviewing the foreign invested industry policy in addition to exercising the power of registration of foreign-invested partnership enterprise.

For the ��catalogue of the prohibited projects�� in the Catalogue of Industries for Guiding Foreign Investment and those projects which are defined as ��limited to equity joint venture��, ��limited to cooperative joint venture��, ��limited to equity and cooperative joint venture��, ��majority shares held by Chinese parties��, ��shares held by Chinese parties more than those held by foreign parties�� and others which have request for foreign proportion, no foreign-invested partnership enterprises shall be set up. The wholly state-owned companies, state-owned enterprises, listed companies and public-welfare-oriented public institution or social organizations shall not be the general partners.

The registration items for a foreign-invested partnership enterprise shall include: (1) name; (2) main business place; (3) partners operating the partnership business; (4) business scope; (5) type of partnership enterprise; (6) partners�� names, country (region) and resident address and the way to take responsibility, subscribed or paid-up capital amount, paid-up period, contribution means and assessment. If there is partnership term in the partnership agreement, the registration items shall also include the partnership term. If the partner for implementing the partnership affairs is a foreign enterprise, Chinese legal person or other organizations, the registration items shall also include the representative appointed by them. If no partner for implementing the partnership affairs is agreed in the partnership agreement or by all general partners, then all general partners shall be the partners for implementing the partnership affairs.

In the event that any registered items of a foreign-invested partnership enterprise are changed, then that enterprise shall, within 15 days after making the change decision or the change happens, apply for registration of changes at the previous enterprise registration organ. If the foreign-invested partnership enterprise is dissolved, it shall be liquidated by the liquidator in compliance with the Partnership Enterprise Law. The Liquidator shall within ten (10) days after decision, file the members of the liquidation team with the enterprise registration organ.

Where a foreign-invested partnership organ intends to establish a branch, it shall apply to the enterprise registration organ at the place where the branch is located for registration. The business scope of the branch shall not exceed that of the foreign-invested partnership enterprise.

About the limited projects defined in the Catalogue of Industries for Guiding Foreign Investment that has no legal pre-approval requirement or involves duties of the relevant government departments, the enterprise registration organ shall, within five days after accepting the application, ask for the opinions of other relevant government departments. The enterprise registration organ shall make the decision on whether to register within five days after receiving the written comments from other departments. The relevant formalities shall be undertaken in compliance with the laws and regulations if the foreign-invested partnership enterprise involves other projects that need approval.

In addition, according to the Management Rules and the Management Measures, if a foreign-invested partnership enterprise whose main business is investment intends to make investment in China, the investment shall be carried out according to the laws and regulations concerning foreign investment; if any project involves approval, it shall be handled according to the regulations on approval of projects; these enterprises shall be registered after examination at the administration for industry and commerce of the provinces, autonomous revisions, municipalities directly under the jurisdiction of the Central Government, Cities Specifically Listed in the Plan and the Sub-provincial Cities. Where the foreign-invested investment companies and foreign-invested venture capital enterprises establish partnership enterprises in China or join the partnership enterprises already set up by the Chinese natural persons, legal persons or other organizations, Partnership Enterprise Law and Management Measures shall be applied and the Management Regulations shall be applied for reference; if they establish companies in China, the Company Law and Company Registration Management Rules shall be applied.

Circular of The Supreme People��s Court concerning Adjustment of Standards on the first-instance Intellectual Property Civil Cases of the Local People�� Court at all Levels

The Supreme People��s Court promulgated, on January 28, 2010, ��Circular of The Supreme People��s Court concerning Adjustment of Standards on the first-instance Intellectual Property Civil Cases of the Local People�� Court at all Levels�� (hereinafter, ��Circular��), which shall come into force on February 1, 2010. The previous standards shall still be applied to the cases which have been accepted before the Circular.

The Higher People��s Court��s jurisdiction is the first-instance intellectual property civil cases with the subject matter of RMB 200,000,000 or above, and those cases with the subject matter of RMB 100,000,000 or above and one of the parties concerned are not located in its jurisdiction or those foreign-related or Hong Kong, Macau or Taiwan-related cases; any first-instance intellectual property civil cases below the above standards, unless it is otherwise designated by the Supreme People��s Court to have the jurisdiction of the basic people��s courts for first-instance intellectual property civil cases, shall be governed by the intermediate people��s court. The basic people��s court which is designated by the Supreme People��s Court to have the jurisdiction for first-instance intellectual property civil cases shall have the jurisdiction for those first-instance intellectual property civil cases whose subject matter is below RMB 5,000,000, and those cases whose subject matter is between RMB 5,000,000 and RMB 1,000,0000 and the parties concerned are located in the place where the Higher or Intermediate people��s court is seated. For intellectual property civil cases which are difficult, new-type and have universal significance legally, the people��s court at the higher level may, in its sole discretion or according to the application filed by the people��s court at the lower level, decide to try according to Article 39 of the Civil Procedural Law.

For the first-instance intellectual property civil cases concerning disputes on patent, new plant types, ic layout design and determination on famous trademarks and monopolization dispute, jurisdiction shall be determined also in compliance with the special regulations of the Supreme People��s Court on those cases.

Determination of the Standing Committee of National People��s Congress on Revisions to the Copyright Law of PRC

The Standing Committee of National People��s Congress promulgated, on February 26, 2010, the Decisions on Revising ��Copyright Law of PRC��, which shall come into force on April 1, 2010.The Decisions on Revising ��Copyright Law of PRC�� make revisions to Article 4 of the Copyright Law as follows: ��The copyright owner shall not exercise his copyright in violation of the Constitutional Law and laws, and the public interest. The state will supervise and manage the publishing and broadcasting of works according to the laws.�� One article is added as Article 26: ��If the copyright is mortgaged, the mortgagor and mortgagee shall carry out the mortgage registration at the Copyright Administrative Organ of the State Council.��

Notice of the State Administration of Taxation about Several Tax Issues Concerning the Implementation of Enterprise Income Tax Law
The Notice about Several Tax Issues Concerning the Implementation of Enterprise Income Tax Law (hereinafter ��the Notice��) has been promulgated by the State Administration of Taxation on February 22, 2010 and shall come into force as of promulgation.

The Notice has confirmed the tax issues in about 8 aspects, which mainly focus on:
1. Issues concerning the confirmation of rent: where an enterprise obtains rents by providing use rights on fixed assets, packages or other tangible assets, if the trading contract or agreement provides that the lease term covers several years and the rent is paid up in one time, the rent shall be equally divided into the relevant years as the revenue. If the lesser is a non-resident enterprise that has business place in China and declares the enterprise income on the actual basis, this provision shall apply.
2. Issues concerning the confirmation and calculation of income from assignment of equity: where an enterprise assigns the equity, the revenue therefrom shall be confirmed at the time when the assignment agreement enters into effect and the registration modification formalities finish. The income from assignment of equity shall the revenue therefrom after deducting the costs so occurs. When calculating the income from assignment of equity, such amount that may be distributed to the equity from the retained earnings of the shareholders like the undistributed profit of the invested enterprise may not be deducted.
3. The year when the enterprises begins its business shall be the year when the profit & loss of the enterprise being calculated. The expenses and costs occurred during the period of establishment before the production and business of the enterprise shall not be calculated as the loss of current year, which shall be disposed of in accordance with Article 9 of the Notice of the State Administration of Taxation on Several Issues regarding the Linkup between Matters Related to the Enterprise Income Tax (Guo Shui Han [2009] 98).

4. As to enterprises that engages in the business of equity investment (including the headquarter of group company, investment ventures and etc.), the dividends, capital bonus and the revenue from assignment of equity obtained from the invested enterprise may deduct the business entertainment expenses within the limitation at certain percentage.

Notice of the State Administration of Taxation on Printing and Distributing the Administrative Measures for Assessing and Levying Enterprise Income Tax on Non-resident Enterprises

The Administrative Measures for Assessing and Levying Enterprise Income Tax on Non-resident Enterprises (hereinafter ��the Measures��) has been promulgated by the State Administration of Taxation on February 20, 2010 and shall come into force as of promulgation.
The Measures shall apply to the non-resident enterprise provided in Paragraph 2 of Article 3 of the Enterprise Tax Law, and the verification of enterprise income tax on the permanent representative offices of foreign enterprises shall be governed by other relevant provisions.

The Measures require that non-resident enterprise shall keep account books in accordance with the law on the administration of tax collection and the relevant laws and regulations, and conduct bookkeeping and accounting on the basis of lawful and valid vouchers, accurately compute the income tax payable under the principle of matching its actual functions which it undertakes with the risks which it faces, and faithfully file enterprise income tax returns and pay the enterprise income tax. Where a non-resident enterprise is unable to accurately compute and faithfully file tax returns about the income taxes payable because it is difficult to check the account as a result of incomplete account books and references or for any other reason, the tax authority shall have the power to employ the relevant methods to assess its taxes payable.

Where a non-resident enterprise signs a contract with a Chinese resident enterprise on the sale of machinery & equipment or goods and simultaneously provides such labor services as equipment installation, assembling, technical training, mentoring and supervision, if the sale contract does not specify the amounts of charges for the aforesaid labor services or if the prices specified in the sale contract are not reasonable, the competent tax authority may assess the labor service income. As to the income which a non-resident enterprise obtains from providing labor services to its clients within China, if all of the said services occur within China, the non-resident enterprise shall file enterprise income tax returns and pay the enterprise income tax on the total income. If the said labor services simultaneously occur within and outside China, the non-resident enterprise shall divide its income into domestic income and overseas income based on where the labor services are provided, and file enterprise income tax returns and pay enterprise income tax on the income generated from the labor services provided within China. If the tax authority has any doubt, it may require the non-resident enterprise to provide true and valid proof, and reasonably divide its income into domestic income and overseas income by taking into full account such factors as the workload, work time, costs and expenses, etc. If the non-resident enterprise fails to provide true and valid proof, the tax authority may regard all of the services provided by the non-resident enterprise as services occurred within China.

If a non-resident enterprise, which is subject to enterprise income tax upon assessment, is engaged in business activities within China under different profit ratios as assessed and has taxable income, it shall compute the incomes respectively and apply the corresponding profit ratios to the computation of income taxes payable. If it is impossible to compute the incomes respectively, it shall apply a higher profit ratio to the computation of the enterprise income tax.

Reply on the Disposition of Issues concerning the Closedown of Preferential Policies for Enterprise Income Tax of Foreign-funded Enterprises by the Government

The Reply on the Disposition of Issues concerning the Closedown of Preferential Policies for Enterprise Income Tax of Foreign-funded Enterprises by the Government (hereinafter ��the Reply��) has been promulgated by the State Administration of Taxation on February 12, 2010 and shall come into force as of promulgation.
The Reply has given the following opinions in handling the issues concerning the foreign-funded enterprises that is closed or liquidated for national development plan, which results in non-conformity of the tax preferences provided in the Income Tax Law of the People��s Republic of China for Foreign-Funded Enterprises and Foreign Enterprises and the transitional policies:

(1) First, it shall pay or return the preferred enterprise income taxes that has already been enjoyed;

(2) If the foreign-funded enterprise or foreign enterprise has, within five years since the date of purchase, leased or transferred the home made products bought before December 31, 2007 that has credited against enterprise income tax according to the Notice of the Ministry of Finance and the State Administration of Taxation on Relevant Issues Concerning the Credit of Enterprise Income Tax Against the Investment of Foreign-funded Enterprises and Foreign-enterprises in Purchasing Home Made Products, it shall pay the enterprise income tax that has been credited at the time when leasing or transferring such products, no matter when such lease or transfer occurs.

(3) If the foreign investor of the foreign-funded enterprise has re-invested the profit obtained from such enterprise before December 31, 2007 into such enterprise to add the registered capital or used the profit as capital investment to establish other foreign-funded enterprises according to Article 10 of the Income Tax Law of the People��s Republic of China for Foreign-Funded Enterprises and Foreign Enterprises, if the operation term is not less than five years and the investor has be refunded forty percent of the income tax already paid on the reinvested amount upon approval by the tax authorities, if the re-investment is withdrawn before the expiration of 5-year term, it shall pay back the taxes that has been returned.

The Interpretation (II) of the Supreme People��s Court and the Supreme People��s Procuratorate on Several Issues concerning the Concrete Application of Law in the Handling of Criminal Cases of Making, Reproducing, Publishing, Selling and Spreading Pornographic Electronic Information by Means of the Internet, Mobile Communications Terminal and Sound Message Stations has been jointly promulgated by the Supreme People��s Court and the Supreme People��s Procuratorate on February 2, 2010 and shall come into force as of February 4, 2010.

If anyone makes, reproduces, publishes, sells or spreads pornographic electronic information for profits by means of the internet or terminal of mobile communications, Article 1 and Article 2 of the Interpretation of the Supreme People��s Court and the Supreme People��s Procuratorate on Several Issues concerning the Concrete Application of Law in the Handling of Criminal Cases of Making, Reproducing, Publishing, Selling and Spreading Pornographic Electronic Information by Means of the Internet, Mobile Communications Terminal and Sound Message Stations shall apply. Where such pornographic electronic information made, reproduced, published, sold or spread contains minors who are less than 14 years old, the act shall be deemed as serious. In case anyone spreads pornographic electronic information for no profit by means of the internet or terminal of mobile communications, he/she shall be convicted as the crime of spreading pornographic articles if quantity has reached certain amount or it results in serious consequences. In case anyone conducts any of the acts above by means of chatting room, forums or instant communications software or emails, he/she shall be also subject to the conviction of the crime of spreading pornographic articles.

In case anyone spreads pornographic sound message through sound message stations for profits and has any of the circumstances specified therein, the person-in-charge who is directly responsible and other person directly liable shall be convicted and punished as the crime of spreading pornographic articles for profit. Under any of the following circumstances, the punishment shall be higher:
(1) To make, reproduce, publish, sell or spread pornographic electronic information that specifically describing the sexual acts of minors less than 18 years old;
(2) To knowingly provide direct link for pornographic electronic information that specifically describing the sexual acts of minors less than 18 years old on the website or web page owned, managed or used by himself/herself;
(3) To sell or spread pornographic electronic information and sound message to minors less than 18 years old;
(4) To force subscribers to visit or download pornographic electronic information through such methods as using destructive program or vicious code to revise the computers setup of the subscribers.

In case anyone knowingly render aid of links, server trusteeship, network memory space, communications transmission channels, and expenditure settlement for other people for their committing such crimes of making, reproducing, publishing, selling or spreading pornographic electronic information, the person-in-charge who is directly liable and other person directly liable shall be subject to the punishment of conspiracy.

The Opinions on Promoting the Development of Private Museum (hereinafter ��Opinions��) has been jointly promulgated by the State Administration of Cultural Heritage, the Ministry of Civil Affairs, the Ministry of Finance, the Ministry of Land and Resources, the Ministry of Housing and Urban-Rural Development, the Ministry of Culture and the State Administration of Taxation on January 29, 2010 and shall come into force as of February 4, 2010.

According to the Opinions, it shall (1) first regulation the system for the entry of private museums, (2) speed up the promulgation of Museum Regulation to recognize the same legal position of private museum and public museum, (3) strengthen the examination concerning the legality and realness of the collections in the private museums applying for establishment and confirm the legal title of the private museum to the collections, and (4) stimulate social powers to establish special private museums of characters in different industry or region to fill the gaps of current museums. For private museums that conform to the establishment conditions, the examination and registration of such application shall be subject to the Interim Regulation on the Registration Administration of Private Non-enterprise Entities and the Measures for the Administration of Museums.

As to the house and expenses of private museum, the Opinions promote such forms as private establishment with public aid, public establishment under private operation and the like. For regions that have certain conditions, it is available to establish the system that the government provides aids to the private museum. Where the construction land for the non-profit private museum is subject to the Catalogue of Allotted Land, the land may be allotted upon the approval of the people��s government at the county level or above, however, the land use of the private museum shall not be changed, nor shall use the land use right under a mortgage. The expenses may include the loan provided by financial institutions for the private museums that conforms certain conditions, or the donations collected from the society. The donation, ticket income, non-profit income and other income of the private museum are subject to relevant preferential policies specified in current tax laws and regulations.