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FAQ17- What are the conditions for establishing Chinese-foreign equity and contractual joint venture medical institutions within Chinese territory?

To meet the needs of the reform and opening-up, and to promote healthy development of Chinese medical and public health undertakings, the Ministry of Health and the Ministry of Foreign Trade and Economic Cooperation have promulgated Provisional Measures for the Administration of Chinese-Foreign Equity and Contractual Joint Venture Medical Institutions, in accordance with laws and regulations concerning foreign investment and the Administrative Regulations of Medical Institutions. The Measures permit foreign medical institutions, companies, enterprises and other economic organizations to cooperate with Chinese medical institutions, companies, enterprises and other economic organizations to set up medical institutions in form of equity and contractual joint ventures.

Conditions for the establishment of Chinese-foreign equity and contractual joint venture medical institutions:

1). The establishment and development of Chinese-foreign equity and contractual joint venture medical institutions must be in conformity with the regional public health planning and medical institution establishment planning of the area concerned, and must follow the Basic Standards for Medical Institutions, stipulated by the Ministry of Health.

2). The Chinese and foreign parties applying for the establishment of Chinese-foreign equity and contractual joint venture medical institutions should be legal persons or entities capable of independently assuming civil liabilities. The said Chinese and foreign parties should have direct or indirect experience in the investment and management of medical and health undertakings and should meet one of the following requirements:

1. The capacity to provide world-advanced medical institution management experience, and management and service models;
2. The capacity to provide world-advanced medical technologies and equipment; and
3. The capacity to supplement and improve the medical services, capabilities, technologies, funding and facilities of a given area.

3). The Chinese-foreign equity and contractual joint venture medical institution to be established must meet the following requirements:

1. It must be an independent legal person;
2. The total investment should be no less than 20 million yuan;
3. The Chinese party involved should hold an equity share of no less than 30 percent in the Chinese-foreign equity and contractual joint venture medical institution;
4. The period of the joint venture or cooperation should not exceed 20 years; and
5. Other conditions set by the health administrations at and above the provincial level.

4). The Chinese party involved that makes its investment in the form of state assets (including evaluation-based contribution or using the state assets as conditions for cooperation) must obtain approval from the relevant departments and must, in accordance with the regulations concerning the state assets assessment management, have the state assets to be invested evaluated by an evaluation agency recognized by the state assets management authorities. The result of an evaluation confirmed by the state assets management authorities at the provincial level or higher may be used as the basis of the pricing of the state assets to be invested.

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