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CIRCULAR OF THE STATE ADMINISTRATION FOR INDUSTRY AND COMMERCE ON IMPLEMENTING THE EXECUTION OPINIONS ON SEVERAL ISSUES CONCERNING LAW APPLICATION FOR THE ADMINISTRATION ON THE EXAMINATION, APPROVAL AND REGISTRATION OF FOREIGN-FUNDED COMPANIES

Circular of the State Administration for Industry and Commerce on Implementing the Execution Opinions on Several Issues concerning Law Application for the Administration on the Examination, Approval and Registration of Foreign-funded Companies

Gong Shang Wai Qi Zi [2006] No.102

The administrations for industry and commerce of all the provinces, autonomous regions, municipalities directly under the Central Government and cities under separate state planning,

With the purpose of correctly applying the Company Law, the Regulations on Company Registration Administration and the relevant laws on foreign investment, keeping the continuity of the laws and policies on foreign investment utilization in our country, and further improving the quality and level of the work of the administration on the access of direct foreign investment, the State Administration for Industry and Commerce, the Ministry of Commerce, the General Administration of Customs, and the State Administration of Foreign Exchange jointly printed and distributed the Execution Opinions on Several Issues concerning Law Application for the Administration on the Examination ,Approval and Registration of Foreign-funded Companies (No.81 [2006] of the State Administration for Industry and Commerce, hereinafter referred to as the Implementation Opinions) on April 24, 2006. In order to better carry out and fulfill the Implementation Opinions, we hereby notice of the relevant matters as follows:

I.

To enhance cognition, and intensify study. The Implementation Opinions have, satisfying the demands of new situations and on the basis of clarifying the principles of law application for the administration on the examination, approval and registration of foreign-funded companies, put forward clear and concrete opinions on issues such as the organizations, forms of establishment, time limit of application for registration, documents required to be submitted at the time of examination, approval and registration, ways of capital contribution, supervision over capital contribution, domestic investment, the status of the affair-handling offices, and the customs and foreign exchange management related to capital contribution, and etc. The Implementation Opinions are effective measures for the relevant departments of the state in terms of implementation of the newly revised Company Law, Regulations on Company Registration Administration and the relevant foreign investment laws, specific embodiment of the transformation of functions, administration according to law, coordination and cooperation, and optimization of services of the relevant law enforcement departments of the state, and are also the positive achievements of foreign capital registration and administration system for progress , exploitation and innovation. Every locality shall combine the study and implementation of the Implementation Opinions with the study of the Company Law and the Regulations on Company Registration Administration, with the study of foreign investment laws and regulations, so as to digest and understand them thoroughly, and shall earnestly fulfill the duties and regulate the work for the administration of foreign investment registration according to the new legal requirements, so as to ensure that the work for the administration of registration of foreign investment is adapted to the new situations.

II.

To strictly execute the laws and unify the criterions. Every locality shall, in light of the actual situation of local foreign investment, intensify the coordination and cooperation with the relevant functional departments, pay attention to mastering the standard for law enforcement, and especially do well in the following several jobs:

1.

As to the organizations of foreign-funded companies, much clearer distinction has been made in the Implementation Opinions on different types of foreign-funded companies according to the Company Law and the relevant foreign investment laws: Sino-foreign equity joint venture and Sino-foreign contractual limited companies shall establish the board of directors as the power organ according to the relevant provisions, and other organizations of the company shall be prescribed in the articles of association of the company in light of the corporate autonomy principle; the organizations of foreign-funded joint venture, solely foreign-funded limited companies and foreign-funded joint stock companies shall accord with the provisions of the Company Law, and shall establish and perfect all organizations of the companies. On whether or not the foreign-funded companies that has been established before January 1, 2006 shall make revisions on their articles of association, the company registration organs do not have any mandatory requirement, and the companies may make a decision by themselves. If they have any revision, they shall report it to the examination and approval department for approval and to the registration organ for archival filing.

2.

As to the notarization and certification documents on the subject qualifications of a foreign investor or the identity certificate thereof, the Implementation Opinions have made provisions in principle, and the concrete channels of notarization and certification have been clarified in the revised Design of Registration Book of Foreign-Funded Enterprises and the Requirements Thereof. The applicants may, in light of the corresponding requirements, submit the certificate documents on the basis of the application matters.

3.

As to the qualifications of foreign-funded companies for domestic investment, the Implementation Opinions have, according to the Administrative License Law and the Company Law, clarified that the company registration organs shall not any more examine the certificates of corresponding investment qualification. Articles 5 and 6 of the Interim Provisions on Domestic Investment by Foreign-funded Enterprises shall not be implemented any longer.

4.

As to the registration of the affair-handling offices, the Implementation Opinions have clarified the handling measures, namely, the affair-handling offices that have been registered formerly may not transact the formalities for extension any longer; after the expiry of the time limit, they shall transact the formalities for writing-off registration or apply for establishing a branch company upon the needs.

It should be illuminated that the existence of the affair-handling office of a company is not prohibited by law, a foreign-funded enterprise may directly establish an affair-handling office for business contact upon the needs of business operation with no needs to transact the registration formalities for industry and commerce.

After the affair-handling offices of foreign-funded companies are no longer subject to the industry and commerce registration, the administrative department of foreign investment registration shall continue to supervise them, and prohibit them from undertaking operational activities. Every authorized administration and basal office of industry and commerce that in charge of territorial supervision shall, when making supervision over the law enforcement, focus on the key points in the investigation and punishment of operational activities undertaken by affair-handling offices, and pay attention to mastering the extent for law enforcement. Anyone that directly pursue commodity production or service provision under the name of the affair-handling offices shall be investigated and punished severely according to law. If the situation is slight and the harm is not serious, it shall mainly be guided and regulated.

III.

To strengthen propagandizing and serve the society. The Implementation Opinions have, according to the newly revised Company Law and foreign investment laws and regulations, clarified some applicable opinions on improving the administration of the registration of foreign-funded companies, of which there are both the contents of reducing the market access standard for foreign investment, simplifying the formalities for the examination, approval and registration and optimizing the investment environment, and the contents of regulating the governance structure of foreign-funded enterprises, regulating the registration documents and procedures and strengthening supervision and administration. Every locality shall, in light of the reality of its own region, take effective measures to strengthen training and propagandizing on Company Law and the Implementation Opinions. The training objects shall cover the basal supervision and administration personnel. The functions of every industrial association, Taiwan merchant association, liaison staff of industry and commerce and any other intermediate organization and personnel shall be fully exerted, and reports shall be forwardly circulated to them to strengthen communications. And their opinions and suggestions shall be heard in a timely manner so as to continuously improve the work of their own and earnestly improve the effect of implementation.

IV.

To modify the software to meet requirements. The Implementation Opinions have made a more detailed classification on foreign-funded companies, and also have adjusted the procedures for examination, approval and registration. Every locality shall, in combination with the implementation of the Circular on Applying Database and Establishing National System of Monitoring and Analysis on Foreign Investment Registration Administration Data (No.146 [2005] of the State Administration for Industry and Commerce) of the State Administration for Industry and Commerce and the requirements of the relevant regulations, make necessary adjustments and complementation on the corresponding registration software and data indexes. Meanwhile, every locality shall, in light of the requirements for the design of registration book and the criterions as printed and distributed by the State Administration for Industry and Commerce in the Circular on Amending Part of the Design of Registration Books of Foreign-funded Enterprises (No.213 [2005] of the State Administration for Industry and Commerce), make proper adjustment and improvement on the tables of registration documents in combination with the local reality.

Every authorized administration shall, during the process of implementation, reinforce guidance to the work for the basal supervision and administration over foreign investment, earnestly summarize the experiences, pay attention to hearing the opinions and suggestions of all the parties concerned, gather the new situations and new problems arising during the implementation, strengthen the research on them and make a timely feedback manner.

The State Administration for Industry and Commerce

May 26, 2006

  State Administration for Industry and Commerce 2006-05-26  


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