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Business TIPS<br />
Q&A for Foreign Business Practice in China<br />
We are a company registered and established<br />
in Germany, but the nature of our<br />
Q:<br />
company is a subsidiary. Recently, we want to<br />
invest a new company in Beijing. Can we, a<br />
subsidiary of a foreign company, are allowed to<br />
invest in China? If can, what preparations shall<br />
we make for such investment?<br />
There are no explicit provisions on the nature of<br />
A: a company which plans to invest in China, but<br />
there are provisions on the industry to be invested. For<br />
details, please refer to the Catalogue for the Guidance of<br />
Foreign Investment Industries (amended in 2007). According<br />
to the type of the company that you want to<br />
establish, you shall observe the Detailed Rules for the<br />
Implementation of the Law of the People’s Republic of China<br />
on Foreign-invested Enterprises, the Detailed Rules for<br />
Implementation of the Law of the People’s Republic of China<br />
on Sino-foreign Equity Joint Venture and the Detailed<br />
Rules for Implementation of the Law of the People’s Republic<br />
of China on Sino-foreign Cooperative Joint Venture.<br />
Are foreign investment permitted in gold<br />
Q: smelting projects?<br />
In accordance with the industrial category (X) of<br />
A: Restriction for Foreign Investment in the Catalogue<br />
of Industries for Guiding Foreign Investment (Revised<br />
2007), non-ferrous metal metallurgy and rolling processing<br />
industry: 1. Rare metal smelting including tungsten,<br />
molybdenum, tin (excluding tin compounds) and stibium<br />
(including antimony oxide and antimony sulphide), and<br />
gold smelting belongs to the restricted category, the items<br />
of which differs from each other due to different content.<br />
You are advised to directly consult the local competent<br />
commercial authorities for specific procedures.<br />
Is the alcohol exclusive wholesale certificate<br />
Q: required for a brewery? If yes, how to get the<br />
certificate and what procedures are required?<br />
For the purpose of regulating the alcohol circulation<br />
order, promoting the orderly development<br />
A:<br />
of alcohol market and safeguarding state interests and<br />
the legitimate rights and interests of alcohol producers,<br />
operators and consumers, the MOFCOM has formulated<br />
the Measures for the Administration of Alcohol Circulation<br />
(No. 25 Decree of the MOFCOM, 2005) according<br />
to the relevant laws and regulations of China.<br />
Reference information:<br />
Article 6 of the Measures for the Administration of<br />
Alcohol Circulation (No. 25 Decree of the MOFCOM,<br />
2005): Any entity or individual engaged in wholesale<br />
and retail of alcohol (hereinafter referred to the alcohol<br />
operators) shall go through procedures for filing and<br />
registration with the competent commercial department<br />
at the same level of the administration for industry and<br />
commerce in the place where the operator is domiciled<br />
according to the jurisdiction administration principle<br />
within 60 days after receiving the business license.<br />
Clients from Nigeria come to China for<br />
Q: commercial negotiation, which needs the<br />
official invitation letters of Chinese party. Which<br />
department shall I make application in? What<br />
materials shall be prepared? Is it charged or<br />
not?<br />
A:<br />
I suggest that you contact the local competent<br />
commercial authority for handling related issues.<br />
Where one foreigner needs to handle valid commercial<br />
visa (F) once or twice due to economic and trade activities<br />
in China, the visa notice may be handled via local competent<br />
commercial authority; or invitation letter or invitations<br />
of fairs of all kinds issued by<br />
economic and trade committees<br />
or bureaus (general companies) in<br />
the districts and counties where<br />
invitation units of Chinese party<br />
are located may be posted or faxed<br />
to foreign party (except otherwise<br />
special provisions). Foreigners may<br />
hold visa notices or invitation letters<br />
or invitations to go through<br />
procedures of visa in the embassies<br />
and consulates of China abroad<br />
and then come to China.<br />
A is a foreign-invested<br />
Q: enterprise, which reinvests<br />
in China and sets up<br />
a 100% owned B Co., Ltd. Is<br />
B a foreign-invested enterprise?<br />
In case A establishes<br />
B jointly with a domestic<br />
company in which A holds 25% equities, is B<br />
still foreign-invested enterprise?<br />
A:<br />
According to the Provisional Rules on Investment<br />
in China by Foreign-invested enterprises ([2000]<br />
No.6 of the Ministry of Foreign Trade and Economic<br />
Cooperation and the State Administration for Industry<br />
and Commerce), in case the share of foreign investment<br />
in the reinvested registered capital of foreign-invested<br />
enterprise in the central and western regions of China<br />
is more than 25%, it may be treated as foreign-invested<br />
enterprises. With the Approval Certificate of Foreigninvested<br />
Enterprises and the Business License (Noted),<br />
enterprises with foreign reinvestment may enjoy the<br />
treatment specified by state laws and regulations.<br />
According to the Provisions on Establishment of<br />
Companies of Investment Nature by Foreign Investors, the<br />
establishment of an enterprise with investment from an<br />
investment company shall be separately submitted for<br />
approval in accordance with the approval authority and<br />
approval procedures for the examination and approval<br />
of foreign-invested enterprises.<br />
Q:<br />
How to accurately and easily confirm the<br />
legitimacy of an enterprise? Which certificates<br />
are required?<br />
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