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INTERIM MEASURES FOR TRIAL IMPLEMENTATION OF TRAVEL AGENCIES WITH CHINESE AND FOREIGN INVESTMENT

e0108219981029the State Council20020101

The National Tourism Administration, the Ministry of Foreign Trade and Economic Cooperation

Interim Measures for Trial Implementation of Travel Agencies with Chinese and Foreign Investment

Decree [1998] No.11 of the National Tourism Administration, the Ministry of Foreign Trade and Economic Cooperation

(Approved by the State Council on October 29,1998, Promulgated by Decree No.11 of the National Tourism Administration and the Ministry of Foreign Trade and Economic Cooperation on December 2,1998)

Article 1

These Measures are formulated in accordance with the Law of the People's Republic of China on Chinese and Foreign Equity Joint Ventures and the Regulations on Administration of Travel Agencies as well as other relevant laws and regulations for the purposes of further expanding the opening up of tourist industry and promoting the development of tourist industry.

Article 2

These Measures are applicable to travel agencies with Chinese and foreign investment (hereinafter referred to as joint investment travel agencies) that are established within the Chinese territory by foreign companies or enterprises and Chinese companies or enterprises.

Article 3

In applying for establishing a joint investment travel agency, the Chinese joint venture partner shall meet the following requirements:

(1)

It is an international travel agency;

(2)

Its average rate of outside contacts exceeded 30,000 persons per year during the 3 years before the application;

(3)

Its gross sales in the travel business per year exceeded 50,000,000 yuan during the 3 years before the application;

(4)

It is a regular member of the Chinese Tourism Association.

Article 4

In applying for establishing a joint investment travel agency, the foreign joint venture partner shall meet the following requirements:

(1)

It is a travel agency with international travel operations or an enterprise that owns a wholly-funded travel agency with international travel operations;

(2)

Its annual gross sales in the travel business exceed US$50,000,000;

(3)

It has acceded to an international or a domestic computer reservation network or has built its own computer reservation system;

(4)

It is a regular member of its home country's tourism association.

Article 5

A joint investment travel agency to be established shall meet the following requirements:

(1)

Its registered capital shall be no less than RMB 5,000,000 yuan;

(2)

It shall take the form of a limited liability company;

(3)

The proportion of the Chinese joint venture's investment to the registered capital shall be no less than 51%;

(4)

Its legal representative shall be appointed by the Chinese side;

(5)

It has business premises, facilities and staff that are commensurate with demands; and

(6)

The duration of joint venture shall be no longer than 20 years.

Article 6

A joint investment travel agency shall, in accordance with the provisions on operating inbound tourism by international travel agencies, pay a deposit in guarantee of travel agency quality.

Article 7

The examining and approving procedures for joint investment travel agencies are:

(1)

Chinese joint venture partner shall submit to the departments of tourism administration of the provinces (autonomous regions, municipalities under the Central Government) or municipalities separately listed on the State plan in the localities where they are located the project proposals, feasibility study reports and other documents for establishing a travel agency joint investment. The provincial departments of tourism administration shall, after their preliminary examination, transfer and report thereon to the National Tourism Administration.

Where the Chinese joint venture partner are enterprises directly under the Central Government, their competent departments shall, after their preliminary examination, transfer and report thereon to the National Tourism Administration.

The National Tourism Administration shall, in accordance with the relevant laws and regulations of the State on tourism administration; examine and approve the submitted documents.

(2)

Chinese joint venture partner shall, after obtaining the reply of approval of the National Tourism Administration, submit to the provincial competent departments of foreign economic and trade in the localities where they are located the contracts, articles of association and other documents of the joint investment travel agencies to be established. The provincial competent departments of foreign economic and trade shall, after their preliminary examination, transfer and report thereon to the Ministry of Foreign Trade and Economic Cooperation.

Where the Chinese joint venture partners are enterprises directly under the Central Government, their competent departments shall, after their preliminary examination, transfer and report thereon to the Ministry of Foreign Trade and Economic Cooperation.

The Ministry of Foreign Trade and Economic Cooperation shall, in accordance with the relevant laws and regulations of the State on foreign investment, examine and approve the submitted documents.

(3)

For the projects for which establishment has been approved, the Chinese joint venture partner shall undertake the formalities of registration and taxation registration in accordance with the provisions on the basis of the Approval Certificate for Enterprise with Foreign Investment issued by the Ministry of Foreign Trade and Economic Cooperation and the License for Operating Business of Travel Agency issued by the National Tourism Administration.

Article 8

The following documents shall be submitted in applying for establishing a travel agency with joint investment:

(1)

materials certifying the qualification of the Chinese joint venture partner, including: a copy of its business license, the License for Operating Business of Travel Agency, annual business examination reports for the previous 3 years before the application and the testimonial of regular membership of the relevant tourism association;

(2)

materials certifying the qualification of the foreign joint venture partner, including: a copy of its registration certificate, a certificate of credit worthiness issued by its banker, papers certifying its financial position issued by an accounting firm, a certificate of access to a network issued by the relevant computer company, a certificate of regular membership of the home country's tourism association and the annual report of the year before the application;

(3)

project proposal for the joint investment travel agency;

(4)

feasibility study report for the joint investment travel agency;

(5)

the contract and articles of association of the joint investment travel agency;

(6)

other materials whose submission is required by laws, regulations or the examining and approving authority.

Article 9

Each foreign joint venture may invest to establish only one joint investment travel agency within the Chinese territory.

Article 10

No joint investment travel agency is allowed to establish branches during the trial period.

Article 11

A joint investment travel agency may operate both inbound and domestic travel businesses.

Article 12

A joint investment travel agency is not allowed, for the time being, to operate its business for Chinese citizens to travel to a foreign country, the Hong Kong Special Administrative Region, Macao and Taiwan.

Article 13

Where operating special travel programs and programs for travel to special regions, a joint investment travel agency shall report same to the National Tourism Administration and the relevant departments for approval.

Article 14

A joint investment travel agency shall not organize and arrange any programs which include obscenity, gamble, drug-taking or any other programs which are hazardous to social morality and physical and mental health of the people; nor shall it organize any programs which are injurious to the State interests and national dignity of the People's Republic of China; nor shall it organize any programs which contain features that are forbidden by China's laws and regulations.

Article 15

Engagement of tourist guides within the Chinese territory by joint investment travel agencies shall be conducted in accordance with the relevant provisions of the State.

Article 16

Joint investment travel agencies shall subject themselves to the administration of tourism administration departments.

Article 17

Joint investment travel agencies must submit statements on finance, accounting and statistics to tourism administration departments and other relevant departments in accordance with the relevant provisions, and accept business inspection.

Article 18

The income and expenditure in foreign exchange of a joint investment travel agency shall be dealt with in accordance with the relevant measures on enterprises foreign investment.

Article 19

Joint investment travel agencies must abide by the laws and regulations of the People's Republic of China, and subject themselves to the jurisdiction of China's laws and regulations. Their appropriate business activities and lawful rights and interests shall be protected by China's laws and regulations.

Joint investment travel agencies that commit any acts violating China's laws and regulations shall be dealt with according to the relevant laws and regulations.

Article 20

Where the provisions of these Measures are violated, the tourism administration departments shall impose punishments in accordance with the Regulations on Administration of Travel Agencies and the Rules for Implementation of the Regulations on Administration of Travel Agencies.

Article 21

During the period of implementation of these Measures, the Interim Measures for Examining and Approving the Establishment of First Category Travel Agencies with Chinese and Foreign Investment within the State Tourist and Holiday Resorts remain in effective.

Article 22

The establishment of joint investment travel agencies by investors from the Hong Kong Special Administrative Region, Macao or Taiwan together with those from within the mainland shall be handled by reference to these Measures.

Article 23

The National Tourism Administration and the Ministry of Foreign Trade and Economic Cooperation shall be responsible for the interpretation of these Measures.

Article 24

These Measures enter into force as of the date of promulgation.

  The National Tourism Administration, the Ministry of Foreign Trade and Economic Cooperation 1998-12-02  


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