Posted by PTL Group
PTL Group
PTL Group has not set their biography yet
User is currently offline
on Wednesday, 23 November 2016
in Business in China

WFOE SET-UP IN CHINA

CHANGES IN REGULATION

Doing business in China is becoming easier and more appealing for foreign companies now that the WFOE set-up process has been simplified.

In early September a new set of rules were released to ease the burden on the business environment within China by reducing bureaucracy and increasing transparency. The rules specifically support Foreign Invested Enterprises (FIEs) and took effect from October 1st 2016. Among the amendments in the law, it was decreed that Ministry of Commerce (MOFCOM) approval will no longer be required; instead only online filing will be needed. However it is important to note that this will only apply to those businesses not listed on the negative list.

MOFCOM issued the updated negative list on October 1st, which lays out national market access restrictions and indicates how the new system will operate.

These are the most important amendments included in the new regulations:

1.  Newly-established FIEs must comply with MOFCOM. The filing must be made after the pre-registration approval of the FIE’s name or within 30 days after the issue of the FIE’s business license.

2.  If the FIE undergoes one of the following changes, MOFCOM must be notified within 30 days:

  1. Basic FIE information
  2. Basic information about the FIE’s investors
  3. Shareholding and pledges of shareholding (iv) merger, division and termination

3.  If the FIE is confirmed to not be on the negative list by the local MOFCOM, the latter must  issue a notification of completion of filing within 3 working days of submission, thus shortening the processing time.

4.  The new process imposes more extensive information requirements than the current foreign investment approval system in several respects.

5.  According to the new procedure the completion of the filing is not a condition of the effectiveness of the establishment or a change of the particulars of the relevant FIE. If the FIE does not make the filing, they could be fined up to RMB 30,000.

6.  The FIE’s information will be stored in a nationwide online database where:

  1. The FIE and its investors are to have access to the information filed
  2. The local MOFCOM may publicly release, through MOFCOM’s nationwide FIEreporting network, details of non-compliance with the filing regime by the FIE and its investors.

7.  The local MOFCOM is required to monitor compliance with the national security regime and notify MOFCOM of any non-compliance.

 

Sources

https://www.paulhastings.com/publications-items/details?id=b463ea69-2334-6428-811c-ff00004cbded

Tags: Untagged

Comments

No comments made yet. Be the first to submit a comment

Leave your comment

Guest
Guest Tuesday, 21 November 2017