What sort of regulations are there in the Shanghai Pudong New Area concerning approval of foreign-invested enterprises?

(1) Departments for approving foreign investment projects and the limit of their authority:
a. Any project with a total investment under USD 30 million are examined and approved by Pudong New Area Administrative Committee. Projects belonging to Restricted Type B in the Industrial Guidance of the State , the project proposals shall be approved and registered by the authoritative department of the State Council.
b. Any foreign investment project with a total investment under USD 30 million in the Pudong Waigaoqiao Free Trade Zone is approved by the Waigaoqiao Free Trade Zone Administrative Committee and registered by FICS.
c. Any foreign investment project with a total investment of under USD 10 million is examined and approved by the departments for approving foreign investment projects in districts, counties or bureaus.
d. Any production project, of which the total investment exceeds USD 30 million and any non production projects, which requires the approval of the competent department of the State Council,
shall be examined and approved by it upon the approval of the foreign investment committee together with the department concerned.

(2) Procedures for approval:

a. Submitting the project proposal;
b. Submitting the feasibility study report together with the contract and articles of association;
c. Applying for the certificate of approval;
d. Applying for the business license.

The Chinese investors of both Sino-foreign joint ventures and Sino-foreign cooperative enterprise are responsible for submitting all these documents needed for approval; foreign-funded enterprises shall entrust an advisory agent with the work.

By whom are Sino-foreign funded financial institutions examined and approved?

They will be submitted to the General Office of the People's Bank of China for approval by the Shanghai Branch of the People's Bank of China after its first examination.

What's the maximum time limits of Representative Office for one approval? How long does the business registration certificate remain in force?

The maximum time limits for a Representative Office for one approval is three years and if it's necessary, the foreign (region) enterprises shall apply to the Shanghai Municipal Foreign Economic Trade and Relation Commission for extension through original sponsor at least sixty days before termination. The valid term of business registration certificate for a Representative Office is one year. The Representative Office shall apply for extension to the Administration Bureau for Industry and Commerce 30 days before termination with business summary in one year.

What sort of employee's welfare shall a foreign-invested enterprise be responsible for?

(1)A foreign invested enterprise shall pay to the government social insurance administration department 25.5% of the total net income of all the Chinese employees as their pension insurance fund and 4.5% as medical insurance every month.

(2)A foreign invested enterprise shall pay to the labour service company of the district or county where it is located 10% of the total net income of all the Chinese employees as laid-off pension insurance fund every month.

(3)A foreign invested enterprise shall put aside 15% to 20% of the total Chinese employee's salaries per month as their housing fund.

(4)A foreign-invested enterprise can also pay to the Insurance Co. 10% of the total Chinese employee's net income per month as health insurance fee.

(5)A foreign-invested enterprise can also pay to the Insurance Co. 1% to 8% of the total Chinese employee's net income per month as security insurance.

What is an advanced hi-tech enterprise

A manufacturing enterprise which is in conformity with the State's Industrial Guidance and who adopts international advanced and applicable process for manufacturing , technology, and equipment, whose products 's quality and technology take the lead in the domestic market, can be acknowledged as an advanced hi-tech enterprise.

What preferential policy can foreign investors enjoy if they reinvest the after-tax profit getting from the Foreign Invested Enterprise?

Foreign investors can get refund of company income tax imposed on the amount of reinvestment through application and approval by the tax bureau if they reinvest the after-tax profit in the high-tech or export-oriented enterprises in China with at least five-year operation period. For an ordinary manufacturing project, the refund percentage is 40%.

Can a foreign-invested enterprise engage employees itself? What shall be done if disputes arise?

Under the guidance of Labor and Personnel departments, a foreign-funded enterprise can take on employees by itself. The original enterprises of the employees enrolled shall support it and allow them to transfer. If any dispute arises, it can be harmonised and arbitrated by the Shanghai Municipal Bureau of Labor and the Shanghai Municipal Bureau of Personnel.