Can foreign-investors acquire State-owned or Collective-owned enterprises in Shanghai?

If a foreign investor wants to purchase State-owned or Collective-owned enterprises in Shanghai,in conformity with the foreign investment guidance and industrial guidance for foreign investment, the investor should go to the Shanghai Property Exchange for transfer procedures, and submit the
application to foreign investment examination and approval authority for approval.

What shall be done if the foreign party wants to withdraw its shares?

(1) It is the board of directors that decides to put an end to the association ahead of schedule;

(2) The joint venture shall have its clearance account according to the regulations;

(3) the property after clearance shall be allocated to each party according to the proportion of their investments.

What other formalities should be done after getting the Business License?

1)to apply for the official seals at Shanghai Public Security Bureau;

2)to apply for the foreign exchange registration certificate at the Shanghai Foreign Exchange Administration Bureau;

3)to open the RMB and foreign currency account;

4)to go through the tax registration at the Tax Bureau;

5)to apply for Corporation Code Certificate at the Shanghai Technical Supervising Bureau;

6)to go through the Custom registration at the Customer Office;

7)to go through the Commodity Inspection registration at the Commodity Inspection Bureau;

8)to go through the registration at the Shanghai Statistic Bureau;

9)to go through the employee recruitment procedure at the Labour Bureau and overseas person's working permission at the Foreigner Working Administration Office or Taiwan's, Hongkongese and Macaunese Working Administration Office in the Labour Bureau.

Is it necessary to form a trade union in a foreign-invested enterprise? What's the relationship between the business administrator and the trade union in the enterprise?

In accordance with the Law of Trade Union of the P.R.C., any physical laborer or mental laborer of a manufacturing enterprise or of an institution or of a government office who lives mainly on his salary has the right to join or organise a trade union disregard of his nationality, race, sex, occupation, religion and education.

The trade union of the enterprise shall help and guide the employees in signing labor contracts with the administration of the enterprise or of the institution. It can also represent all the employees to sign a collective contract with the administration of the enterprise. The collective contract shall be handed to the Congress of Staff Representatives or all the employees for discussion. The trade union shall coordinate with the administration of the enterprise to deal with the employee's welfare, pay, labor protection and labor insurance. The trade union shall help the administration to arrange for the employees cultural and technical studies at their spare time as well as training, to raise their cultural standard and professional work and to organise sports and recreation for them. A Sino-foreign joint venture or a Sino-foreign cooperative joint venture shall ask its trade union for its opinions before it makes decisions on employees' pay, welfare, production safety, labor protection and labor insurance.

The trade union of a foreign-invested enterprise can put forward suggestions about employees' pay, welfare, production safety, labor protection and labor' insurance and negotiate with the administrators of the enterprise.

Are there any government regulations concerning the ratio between the total investment and registered capital of a foreign-invested enterprise?

The State ICAB has formulated the following regulations about the ratio of a Sino-foreign joint venture's registered capital and its total investment:

(1) The registered capital of a joint venture with a total investment under USD 3 million ( including 3 million) shall make up at least seven tenths.

(2) The registered capital of a joint venture with a total investment from USD 3 million to USD 10 million (including 10 million) shall make up at least 50% . But the total investment is under USD 4.2 million, the registered capital shall not be less than USD 2.1 million.

(3) The registered capital of a joint venture with a total investment from USD 10 million to 30 million ( including 30 million) shall make up at least two fifths. But the total investment is under USD 12.5 million, the registered capital shall not be less than USD 5 million.

(4) The registered capital of a joint venture with a total investment over USD 30 million shall make up at least one third. but the total investment is under USD 36 million, the registered capital shall not be less than US$ 12 million

Can Foreign Invested Enterprises enjoy the tax-refund policy for their exported products?

Foreign Invested Enterprises established after January 1, 1994 can apply to the tax bureau for VAT exemption for their exported products monthly with necessary documents. The current taxable VAT for the domestically-sold products can be offset by the income VAT amount and if the former one is greater than the later one, the balance can be refunded.