What procedures are there for approval of a foreign-invested enterprise?
(1) Sino-foreign joint ventures:
a.Draft the project proposal. The project proposal can either be drafted by the Chinese party (partner)and then be submitted to the examination and approval authority or be handled by a consulting institution.
b.Apply for the registration of enterprise's name. Once the project proposal is ratified, the Chinese party(partner) shall apply to the Industrial and Commercial Administration Bureau (ICAB is used hereafter) for the registration of the enterprise's name.
c. Work out the feasibility study report, contract and articles of association. The Chinese and foreign parties shall jointly prepare a feasibility study, draft the contract and articles of association, which are then to be submitted to the examination and approval authority by the Chinese party.
d. Apply for the issue of the approval certificate. After the feasibility study report, contract and articles of association are approved, the Chinese party shall apply for the issue of the approval certificate from the examination and approval authority.
e. apply for the business license. Once the approval certificate is obtained, the Chinese party may register with the Shanghai Industrial and commercial Administrative Bureau and apply for the business license.

(2) Procedures for establishing enterprises operated solely with foreign capital:
a.To establish a foreign-funded enterprise, the foreign investor is required to entrust an authorized consulting agency with the application and documents submission for approval.
b. The procedures for establishing Sino-foreign joint ventures and Sino-foreign cooperative joint ventures can be consulted as a reference for the establishment of foreign-funded enterprises.

How do you apply for the establishment of duty-free warehouses and duty free processing factories?

Apply for the establishment of a duty free warehouse, and you will have to submit your application and business license issued by the Industrial and Commercial Administration Office together with relevant documents issued by the competent department of the foreign Economic and trade Commission to the Customs House. Once examined, spot-investigated and approved, the Customs House will promulgate a Duty free Warehouse Registration Certificate. only then can you start the business.

To set up a duty free processing factory, you shall entrust either an authoritative department ratified by the government dealing with import and export businesses or an enterprise engaged in the business of processing registered and ratified by the Industrial and commercial Administration Department to submit your application and relevant documents to the local Customs House. Once the examination result by the Customs House is in accordance with the related laws and regulations, once you have a special factory or workshop and a special warehouse or ground, once you have facilities for supervision and inspection like the customs, once you ensure that you'll abide by the Customs law of P.R.C. and all regulations concerning duty-free factories drawn by the Customs and once you promise to shoulder the responsibilities you are supposed to, the customs House will approve and issue the Duty free Registration Certificate.

What other formalities must be handled apart from registering with the ICAB?

(1) Apart from registering with the ICAB, the representative office shall go through such procedures as preparing official seals, applying for institution code certificate, opening foreign exchange expenditure account and register with the tax bureau step by step;

(2) The foreign (region) representative shall apply for health certificate, working permission certificate, working visa and long term residence permits;

(3) Register and declare at the Customs Office it there are self-use car, office appliances and home appliances imported.

Are there any regulations concerning the time limit of investment?

Sino-foreign joint ventures: each party of the association shall include in the contract the term of investment and shall pay its capital before the deadline drawn up in the contract. The enterprise shall, according to the related provisions, issue a certificate of receiving the amount of investment, which shall be handed over to both the original authoritative office for approval and ICAB to put on file. If the investment capital is required to be paid off at one time, each party of the association shall pay it off within six months after the issue of the business license. If the investment capital is stated as a payment by installment, which shall be handed over to both the original authoritative office for approval and ICAB to be put on file. If the investment capital is required to be paid off at one time, each party of the association shall pay it within six months after the issue of the business licence. If the investment capital is stated as a payment by installment, each party of the association shall not pay less than 15% of the total investment at the first time within three months after the issue of the business license. The each party of the association fails to pay off the investment capital before the deadline means self-dismissal of the joint venture and invalidity of the enterprise's approval certificate. The joint venture shall have it written off at ICAB and hand in the business license for cancellation. If not, the ICAB shall withdraw the enterprise's business license and make it known to the public. Sino-foreign cooperative joint ventures: Chinese and foreign partners shall carry out their duties of paying off all the investment capital and offering cooperation in accordance with laws, regulations and contract. If any party cannot implement its duty beyond the time limit, the ICAB has the right to set a deadline; if it still hasn't when the deadline is due, the authoritative office for approval and ICAB shall handle it according to the relevant regulations.

Can a foreign-invested enterprise engage employees from outside Shanghai?

With the consent of the Labor and Personnel Departments of the province or autonomous region or municipal city where it is located, a foreign-invested enterprise can take on employees from outside Shanghai if it cannot find suitable technical engineers, business administrators or skilled workers needed locally.

What is an export-oriented enterprise?

A manufacturing enterprise whose product export volume (including export on its own or via an agent) accounts for over 50% of its annual sales volume , and who has a surplus of foreign exchange and has made a profit during the year, is deemed as an export-oriented enterprise.