June 23, 2010

Recently, the Ministry of Commerce of China issued the “Circular of the Ministry of Commerce on Issues Concerning Delegating the Examination and Approval Authority for Foreign Investment” (“The Circular”). The Circular stipulates that for foreign invested companies with a total contribution below 300 Million USD in encouraged and permitted classes and below 50 Million USD in restricted classes (“limited amount”) as listed in the Catalogue of Industries for Guiding Foreign Investment, the administrative authority in charge of examination and approval of the establishment, change or supplementation of contribution is delegated from the Ministry of Commerce to the administrative departments of commerce at the provincial level (including the sub-provincial cities such as Harbin, Changchun, Shenyang, Ji Nan, Nanjing, Hangzhou, Guangzhou, Wuhan, Chengdu, Xi’an etc) and the economic and technical development zones at the state level (“Local Examination and Approval Authority”).  In addition, the Circular provides that unless otherwise specified, the establishment and change of registration of foreign invested enterprises in service fields, foreign invested companies with a registered capital below 300 Million USD, and foreign-invested venture capital enterprises and foreign-invested venture capital enterprises with a total capital below 300 Million USD shall be examined, approved and administered by the Local Examination and Approval Authority.

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