Laws of the People's Republic of China

Ministry of Commerce

Ministry of Commerce Notice on Relevant Issues concerning Expanding Distribution Business Scope of Foreign Invested Non-commercial Enterprises

Shang Zi Han [2005] No. 9

The competent commercial departments of all provinces, autonomous regions, municipalities directly under the Central Government and cities specially designated in the State plan:

In accordance with pertinent provisions of the Measures for Administration on Foreign Investment in Commercial Fields (MOFCOM Order [2004] No. 8), relevant issues concerning expanding distribution business scope by foreign invested non-commercial enterprises are hereby notified as follows:

Where a foreign invested non-commercial enterprise expands distribution business scope, all parties that invested in the enterprise shall revise the enterprise contract and articles of association according to the laws, fill in and submit the application forms (see appendix I and II) according to pertinent legal procedures with regard to expanding enterprise business scope and get a new approval certification of foreign invested enterprise. Where a foreign invested non-commercial enterprise expands distribution business scope, it shall specify the distribution type, including wholesale, retail and commission agency and submit the list of categories of the products it operates while filing the application.

In case of engaging in franchise business activities, the examination shall be conducted in accordance with the Measures for the Administration on Commercial Franchise Business. Specified requirements shall be notified separately.

The provincial competent commercial department shall fill in the Application Form for Submission for Expanding Distribution Business Scope of Non-commercial Enterprises and Investment Companies by Foreign Investors (see appendix III).

Where a foreign invested non-commercial enterprise expands distribution business scope and establishes retail stores, and in case that the business scope of the newly established foreign invested enterprise includes non-self-produced products distribution business, the examination shall be conducted according to the relevant provisions as provided by Order No. 8.

All the provincial competent commercial departments shall, in accordance with the purview of examination and approval as provided by Order No. 8, accept or transfer the application of an enterprise for expanding distribution business scope.

It is hereby notified.

Appendix: as follows

Ministry of Commerce of the People's Republic of China

April 2, 2005 htm/e04009.htm

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Appendix I£º

Application Form for Expanding Distribution Business Scope of Foreign Invested Non-commercial Enterprises

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¡¡¡¡Note: For those which continues to be production enterprise after business scope alteration, its distribution income shall be not higher than 30% of total sale amount; for those which turns to be non-production enterprise after business scope alteration, its distribution revenue shall be not confined.

Signature of Corporate Representative£º             

Official Corporate Seal£º

¡¡¡¡This Foreign Invested Enterprise hereby makes the following guarantees:
¡¡¡¡1. To conform to the Foreign Trade Law of People¡¯s Republic of China and relevant rules and regulations.

¡¡¡¡2.To conform to the Measures for the Administration on Foreign Investment in Commercial Fields.

¡¡¡¡3.To conform laws, regulations and rules in the fields of custom, foreign currency, taxation, examination and quarantine, environmental protection, intellectual property, etc. related to import, export and distribution.

¡¡¡¡4.To pay registered capital in due time as stipulated in contracts or constitutions.

¡¡¡¡5.Having passed the annual joint examination of foreign investment enterprises.

¡¡¡¡6.The information written in this table is complete, accurate and true; the reported materials are complete, accurate and legal.

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Appendix II£º

Application Form for Expanding Distribution Business Scope of Investment Companies and Regional Headquarters

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Signature of Corporate Representative£º             

Official Corporate Seal£º

¡¡¡¡This investment company by foreign investors hereby makes the following guarantees:
¡¡¡¡1. To conform to The Foreign Trade Law of People¡¯s Republic of China and relevant rules and regulation.

¡¡¡¡2.To conform to Measures for the Administration on Foreign Investment in Commercial Fields.

¡¡¡¡3.To conform laws, regulations and rules in the fields of custom, foreign currency, taxation, examination and quarantine, environmental protection, intellectual property, etc. related to import, export and distribution.

¡¡¡¡4.To pay registered capital in due time as stipulated in contracts or constitutions.

¡¡¡¡5.Having passed the annual joint examination of foreign investment enterprises.

¡¡¡¡6.The information written in this table is complete, accurate and true; the reported materials are complete, accurate and legal.

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Appendix III£º

Application Form for Submission for Expanding Distribution Business Scope of Non-commercial Enterprises and Investment Companies by Foreign Investors

Submission NO.:              

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 Sealed by Provincial Commerce Department: