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MOFCOM Order No. 2 of 2015 Decision on Revising Certain Regulations and Regulated Documents

The Decision of the Ministry of Commerce on Revising Certain Regulations and Regulated Documents, which was considered and adopted at the 55th meeting of the ministry affairs of the Ministry of Commerce on August 17, 2015 and approved by ministries including the Ministry of Science and Technology, the Ministry of Public Security, the Ministry of Land and Resources, the Ministry of Housing and Urban-Rural Development, the General Administration of Customs, the State Administration of Taxation, the State Administration of Industry and Commerce, the State Administration of Work Safety, China Food and Drug Administration, China Securities Regulatory Commission and the State Administration of Foreign Exchange, are hereby promulgated and shall come into force as of the date of promulgation.

Minister: Gao Hucheng 

October 28, 2015 

MOFCOM Decision on Revising Certain Regulations and Regulated Documents

In order to promote the reform for the registered capital registration system and the transformation of the government functions, facilitate the convenience of industry and commerce registration, practically optimize the business environment and further vitalize the market and motives for development, in accordance with the requirements of the Circular of the State Council on Printing and Issuing the Reform Proposals for the Registered Capital Registration System (Guo Fa (2014) No. 7) and the Circular of the General Office of the State Council on Issues Concerning Accelerating the Implementation of the Registered Capital Registration System Reform (Guo Ban Han [2015] No. 14), the Ministry of Commerce has sorted out and cleared the regulations and regulated documents concerning the reforms for the registered capital registration system. After the clearance, the Ministry of Commerce has decided to make revisions to 29 regulations and regulated documents.

1. With respect to the Interim Provisions Concerning Some Issues on the Establishment of Joint Stock Limited Companies with Foreign Investment (Order of the Ministry of Foreign Trade and Economic Cooperation (1995) No. 1), Article 7 is deleted.
“In transfer of shares subscribed by the shareholders conditions set in the Article 7 must be satisfied.” under Article 8 is deleted.

“The Promoter shall pay in a lump sum the total value of the subscription of the shares within 90 days after the issuance of the approval.” under Article 13 is deleted.

Paragraph 1 of Article 14 is revised to read: “For companies set up through promotion, after the promoters established a board of directors and a board of supervisors, the board of directors shall present establishment approval document, the articles of association of the company to the company registration authority to apply for registration of the company's establishment.”

“The payment of the total value of the subscription of shares” under Article 16 is deleted.

“The payment of the total value of the subscription of shares” under Article 19 is deleted.

2. With respect to the Interim Provisions on Investment in China by Foreign-invested Enterprises (Order of the Ministry of Foreign Trade and Economic Cooperation and the State Administration of Industry and Commerce (2000) No. 6), Item 1 of Article 5 is deleted.

Article 6 is deleted.

Item 3 of Article 7 is deleted.

3. With respect to the Provisions on Merging and Splitting of Foreign-Funded Enterprises (Order of the Ministry of Foreign Trade and Economic Cooperation and the State Administration of Industry and Commerce (2001) No. 8), Article 9 is deleted.

Item 5 of Paragraph 2 of Article 20 is deleted.

Item 6 of Paragraph 1 of Article 23 is deleted.

4. With respect to the Detailed Rules for the Implementation of Automatic Import Licenses of the Enterprises with Foreign Investment (Order of the Ministry of Foreign Trade and Economic Cooperation and the General Administration of Customs (2002) No. 4), Item 2 of Article 4 is revised to read: “(2) A photocopy of the approval certificate of the enterprise with foreign investment or record filing certificate;”

Item 5 of Article 4 is deleted.

5. With respect to the Administrative Measures of People's Republic of China for Export Registration of Sensitive Item and Technology (Order of the Ministry of Foreign Trade and Economic Cooperation (2002) No. 35), Item 2 of Article 4 is deleted.
6. With respect to the Administrative Regulations of Foreign-funded Business-starting Investment Enterprises (Order of the Ministry of Foreign Trade and Economic Cooperation, the Ministry of Science and Technology, the State Administration for Industry and Commerce and SAFE (2003) No. 2), “The investors of a non-legal-person FBIE shall subscribe to a minimum total contribution of 10,000,000 U.S. Dollars; the investors of an incorporated FBIE shall subscribe to a minimum total capital of 5,000,000 U.S. Dollars. Except for the indispensable investors as provided in Article 7, each of the other investors shall subscribe to a minimum capital contribution of not less than 1,000,000 U.S. Dollars.

“The longest term shall not be more than 5 years” under Item 1 of Article 13 is deleted.

Item 2 of Article 13 is deleted.

Item 3 of Article 23 is deleted.

“Which shall be part of the requisite materials for an FBIE to accept annual joint examination” under Paragraph 2 of Article 45 is deleted.

7. With respect to the Administrative Measures for Foreign Investment in Commercial Fields (Order of the Ministry of Commerce (2004) No. 8), Article 8 is revised to read: “Foreign-funded commercial enterprise that opens up a store shall meet the regulations concerning the urban development and business development in urban areas.”

Item 6 of Paragraph 1 of Article 13 is deleted.

8. With respect to the Provisions on the Establishment of Investment Companies by Foreign Investors (Order of the Ministry of Commerce (2004) No. 22), “Such a company shall be in the form of a limited liability company” under Article 2 is revised to read: “Such a company shall be in the form of a limited liability company or a company limited by shares.

Item 3 of Paragraph 1 of Article 3 is deleted.

Item 3 of Paragraph 1 of Article 6 is revised to read: “The approval (photocopy) and business license (photocopy) of the enterprise invested by the foreign investor;”

“The investments shall be fully contributed within two years as of the day when the business license is issued.” under Article 7 is deleted.

Item 4 of Article 17 is revised to read: “The approval certificate (photocopy) and business license (photocopy) of the investment company;”

Item 5 of Article 17 is deleted.

“The above-mentioned material shall be regarded as one of the necessary materials for the investment company to apply for combined annual inspection.” under Article 25 is deleted.

9. With respect to the Administrative Measures for Auctions (Order of the Ministry of Commerce (2004) No. 24), “shall be conducted by lawfully incorporated auction companies” under Paragraph 2 of Article 2 is revised to read: “shall be conducted by companies lawfully licensed for auction business”.

Chapter II is revised to read “Application, Change and Termination of Auction Companies for License for Auction Business”.

“To incorporate an auction company, the investor must have a good credit” under Article 6 is revised to read: “To apply for license for auction business, the investor must have a good credit”.

“Anyone who applies for the incorporation of an auction company” under Article 7 is revised to read: “Any enterprise that applies for the license for auction business”.

Item 4 of Article 7 is revised to read “there must be at least one auctioneer;”.

“To apply for the incorporation of an auction company” under Article 8 is revised to “A company that applies for license for auction business”.

Item 3 of Article 8 is revised to read: “a copy (photocopy) of the business license for enterprise legal person”.

“Intended” under Item 4 of Article 8 is deleted.

“Other staff members to be employed” under Item 5 of Article 8 is deleted.

Article 10 is deleted.

“Where an auction company applies for the establishment of a branch” under Article 11 is revised to read: “Where a branch of an auction company applies for the license for auction business”.

Items 2, 3 and 4 of Article 11 are deleted.

“Where an auction company applies for the establishment of a branch” under Article 12 is revised to read: “Where a branch of an auction company applies for the license for auction business”.

Item 1 of Article 12 is revised to read: “the application report;”.

“Intended” under Item 4 of Article 12 is deleted.

“Other staff members to be employed” under Item 5 of Article 12 is deleted.

Article 13 is revised to read: “The following procedures shall be follows when an auction company or a branch thereof applies for the license for auction business:

The application of an auction company or a branch thereof for the license for auction business shall be subject to the examination of the locate city level competent authority of commerce and submitted to the provincial level competent authority of commerce for verification and issuance of a certificate of approval for auction business.

The provincial competent authority of commerce may hold hearings on the application of the auction company or a branch thereof for the license for auction business.

The certificate of approval for auction business shall be unitarily printed by the provincial competent authority of commerce.”

Article 14 is revised to read: “After an auction company applies for such change registration to the administrative department for commerce and industry, the company shall submit such change to the provincial competent authority of commerce for verification and re-issuance of a certificate of approval for auction business.”

Article 15 is revised to read: “If an auction company or a branch thereof fails to start business or has no tax certificate without justified reasons in a consecutive period of six months after it obtains the license for auction business, its certificate of approval for auction business shall be revoked by the competent authority of commerce.”

Chapter III is revised to read: “Application, Change and Termination for Foreign Invested Companies for Auction Business”.

“For the incorporation of an auction company with foreign investment” under Article 19 is revised to “for the application of an auction company with foreign investment for the license for auction business”.
  
Article 20 is deleted.

“To apply for the incorporation of an auction company with foreign investment” under Paragraph 1 of Article 21 is revised to “For the application of a foreign invested company for the license for auction business”.

Item 5 of Paragraph 1 of Article 21 is revised to read: “A list of the members of the board of directors of the foreign invested company and letters of appointment of the directors appointed by each investors.”

Paragraph 2 of Article 21 is revised to reach: “Where a branch of an auction company with foreign investment applies for the license for auction business, the applicant shall submit the materials provided for in Article 11 hereof.”

Article 22 is revised to read: “The following procedures shall be followed in the application of a company with foreign investment or a branch thereof for the license for auction business:

The applicant shall submit its application documents provided for in Article 19 hereof to the competent authority of commerce of provinces, autonomous regions or municipalities directly under the Central Government where it is located, which shall, within the specified period of time from receipt of all application documents, make a decision about whether or not to approve the application, and issue a certificate of approval in the case of approval; after the applicant applies for the registration to the administration for industry and commerce with the certificate of approval, it applies for the license for auction business to the competent authority of commerce with the certificate of approval and the business license. In case of no approval, the reasons shall be stated.

The competent authority of commerce may hold hearings on the application of a company with foreign investment or a branch thereof for the license for auction business.”

Article 23 is deleted.

Article 24 is revised to read: “If a company with foreign investment or a branch thereof fails to start business or has no tax certificate without justified reasons in a consecutive period of six months after it obtains the license for auction business, its certificate of approval for auction business shall be revoked by the provincial competent authority of commerce.”

“Be responsible for the verification and licensing of the establishment of auction companies and branches thereof” under Paragraph 2 of Article 44 is revised to read “be responsible for the verification and licensing of the application of the company and branches thereof for the auction business”.

Article 55 is revised to read: “The provincial competent authority of commerce or the Ministry of Commerce may nullify its decision on licensing the auction business to an auction company or a branch thereof, if such decision is made:

(1) By the functionary's abusing his power or neglecting his duty;
(2) In violation of the requirements for licensing such business provided for in the Auction Law or these Measures; or
(3) Beyond its statutory authority.”

10. With respect to the Measures on the Administration of the Foreign-Funded Lease Industry (Order of the Ministry of Commerce (2005) No. 5), Item 1 of Article 9 is deleted.

11. With respect to the Tentative Provisions on the Administration of the Export of Precursor Chemicals to Particular Countries (Regions) (Order of the Ministry of Commerce, the Ministry of Public Security, the General Administration of Customs, the State Administration of Work Safety and the State Food and Drug Administration (2005) No. 12), “the photocopy of an approval certificate affixed with a conformity mark of joint annual inspection as submitted by a foreign-invested enterprise” under Item 5 of Article 7 is revised to read: “the photocopy of approval certificate as submitted by a foreign invested enterprise”.

12. With respect to the Administrative Measures for Foreign-Funded International Freight Transportation Agency Enterprises (Order of the Ministry of Commerce (2005) No. 19), Article 6 is deleted.

Article 11 is revised to read: “The business scope of such branches shall be within that of its parent enterprise. The civil liabilities of the branches shall be borne by their parent enterprise.”

Item 4 of Article 13 is deleted.

13. With respect to the Administrative Measures for Strategic Investment by Foreign Investors in Listed Companies (Order of the Ministry of Commerce (2005) No. 28), Item 5 of Article 7 is deleted.

14. With respect to the Supplementary Provisions on the Investment and Holding of Investment Companies by Foreign Investors (Order of the Ministry of Commerce (2006) No. 3), Article 1 is deleted.

15. With respect to the Provisions on the Management of Import and Export of Precursor Chemicals (Order of the Ministry of Commerce (2006) No. 7), Item 2 of Paragraph 1 of Article 29 is revised to read: “the photocopy of the certificate of approval”.

“Capital verification report” under Item 4 of Paragraph 1 of Article 29 is deleted.

16. With respect to the Provisional Measures on Ratification Export Enterprise of Easy-made Poisonous Chemicals of Ephedrine Category (Order of the Ministry of Commerce, Ministry of Public Security, General Administration of Customs and State Food and Drug Administration (2006) No. 9), Paragraph 2 of Article 7 is revised to read: “The enterprise applying that is a foreign-invested enterprise shall also provide the certificate of approval for establishment of a foreign-invested enterprise (a photocopy of the copies) and the joint venture contract or the articles of association, the business license (a photocopy of the copies).”

17. With respect to the Measures for the Administration of the Refined Oil Market (Order of the Ministry of Commerce (2006) No. 23), “and the registered capital shall not be less than RMB 30 million” under Item 2 of Article 7 is deleted.
“And the registered capital shall not be less than RMB 10 million” under Item 2 of Article 9 is deleted.

Item 4 of Article 40 is deleted.

18. With respect to the Measures on the Administration of the Crude Oil Markets (Order of the Ministry of Commerce (2006) No. 24), “and the registered capital shall not be less than RMB 100 million” under Item 1 of Article 6 is deleted.

“The registered capital shall not be less than RMB 50 million” under Item 1 of Article 7 is deleted.

19. With respect to the Administrative Measures for Foreign-invested Mineral Exploration Enterprises (Order of the Ministry of Commerce and the Ministry of Land and Resources (2008) No. 4), Item 5 of Article 16 is deleted.

20. With respect to the Administrative Measures for Qualifications of Overseas Project-contracting (Order of the Ministry of Commerce and the Ministry of Housing and Urban-rural (2009) No. 9), “construction entities shall have a registered capital matched to the requirements for qualification (the registered capital referred to herein shall include the start-up capital); non-construction entities shall have a registered capital of no less than RMB 20 million” under Item 1 of Article 5 is deleted.

“In case of a foreign-invested enterprise, it has passed the joint annual verification for the foreign-invested enterprises for the last consecutive three years” under Item 6 of Article 5 is deleted.

21. With respect to the Detailed Rules for the Implementation of Automatic Import Licenses of the Enterprises with Foreign Investment (Order of the Ministry of Commerce (2011) No. 2), Item 4 of Article 6 is deleted.

Item 4 of Article 7 is deleted.

22. With respect to the Interim Provisions of the Ministry of Commerce on Equity Contribution of Foreign-invested Enterprises (Order of the Ministry of Commerce (2012) No. 8), Items 1 and 5 of Paragraph 2 of Article 4 are deleted.
Article 8 is deleted.

“And certificates of passing joint annual check of foreign-invested enterprises” under Item 4 of Article 10 is deleted.
23. With respect to the Circular on Issues concerning the Pilot Establishment of Foreign-invested Logistics Enterprises (Wai Jing Mao Zi Yi Han (2002) No. 615), Item 1 of Article 4 is deleted.

24. With respect to the Circular of the Ministry of Commerce on Issues Relevant to Expanding the Scope of Foreign Invested Non-commercial Enterprise Distribution Activities (Shang Zi Han (2005) No. 9), “the foreign-invested enterprise makes the following warranties” under Article 5 of Appendix I is deleted.

“The foreign funded investment company shall make the following warranties” under Article 5 of Appendix II is deleted.

“Whether passing the joint annual verification of the previous year” in Appendix III is deleted.

25. With respect to the Circular Regarding the Further Strengthening and Normalizing of Examination, Approval, and Supervision of Direct Investment in Real Estate by Foreign Parties (Shang Zi Han (2007) No. 50), “or have not passed the unified annual foreign-invested enterprise inspection” under Article 6 is deleted.

26. With respect to the Circular of the General Office of the Ministry of Commerce on Further Standardizing the Financial Management of Turnkey Projects for Foreign Aids (Shang Cai Zi (2011) No. 57), Article 4 is revised to read: “The Ministry of Commerce shall set up the financial review system for the preview of the qualification of bidding for projects for foreign aids. Entities participating in the bidding for the constructions of the projects for foreign aids shall not realize any losses in the previous accounting year.”

27. With respect to the Provisions on the Supervision and Administration of Pawn Industry (Shang Liu Tong Fa (2012) No. 423), “annual industrial and commercial examination of corporate shareholders” under Item 3 of Article 38 is deleted.
28. With respect to the Reply of the Ministry of Commerce on Implementation Plan for Pilot Work of Commercial Factoring (Shang Zi Han (2012) No. 919), “The registered capital shall not be less than RMB 50 million” under Item 1 of Article 1 is deleted.

29. With respect to the Reply of the Ministry of Commerce on Conducting Commercial Factoring in Liangjiang New Area in Chongqing, Sunan Modernized Construction Demonstration Area and Suzhou Industrial Park (Shang Zi Han (2013) No. 680), Paragraph 2 of Item 2 of Article 2 is deleted.

In addition, the sequences of the articles of relevant regulations and regulated documents shall be adjusted accordingly.
The Decision shall be implemented as of the date of promulgation.


Translated by Hou Zuowei

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