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Frequently Asked Questions

FAQ-2. What are the formalities for overseas investment to establish enterprises in China? What departments are involved?

In accordance with the existing laws of China, the establishment of enterprises with foreign investment is subject to project-by-project examination, approval and registration by the government. In general, the following steps should be followed for the establishment of Chinese-foreign equity joint ventures and Chinese-foreign contractual joint ventures:

  • Submit the project proposal to the relevant department (planning department or technological renovation administration) and get approval before investors can proceed with various jobs centered round the feasibility study of the project.
  • Submit the feasibility study report to the planning department or technological renovation administration and get approval before investors can sign legal documents, such as the contract and articles of corporation of the enterprise.
  • Submit the contract and articles of corporation of the enterprise to the examination and ratification department, who shall issue the Approval Certificate for Enterprises with Foreign Investment after approval by the Ministry of Foreign Trade and Economic Cooperation.
  • With the Approval Certificate issued by the examination and ratification authorities, the investors can go through registration procedures with the administration of industry and commerce.

The procedures for the establishment of enterprises with foreign investment are quite simple. After the initial project application is approved in writing by the examination and ratification authorities, the investors may submit a formal application, with articles of corporation and other required documents. On receipt of the Approval Certificate, they can proceed with the registration formalities by presenting the Approval Certificate.

In accordance with China's existing laws, the state adopts a classification administrative system for foreign investment. The provinces, municipalities, autonomous regions and cities listed as independent units in state plans have the authority to examine and approve investment of less than US $30 million in areas encouraged and permitted by the state. When an investment exceeds this amount, the project application and feasibility study report shall be examined and approved by the State Development Planning Commission or the State Economic and Trade Commission, while the contract and articles of corporation shall be examined and approved by the Ministry of Foreign Trade and Economic Cooperation.

Many provinces, autonomous regions and municipalities directly under the central government have established foreign investment service centers, which offer foreign investors with a one-stop service, ranging from legal consultation to procurement of project approval. With the improvement of China's social services system, intermediary service agents, including consultation companies, lawyers, and accountants, are all expected to provide investors with efficient and qualified services.

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Tel: (86.21) 6218.9991


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E-mail: China@PathToChina.com
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