Notice of the State Administration of Taxation on the relevant Issues about Canceling the Examination Rights for Temporarily not Collecting Individual Income Tax Arising from Promoting the Transformation of Scientific and Technological Achievements
The State Administration of Taxation promulgated the Notice on the relevant Issues about Canceling the Examination Rights for Temporarily not Collecting Individual Income Tax Arising from Promoting the Transformation of Scientific and Technological Achievements (hereinafter, the “Notice”), which provides that from August 1, 2007, research institutions and colleges and universities may award individuals who hold positions in the research and development of the scientific and technological achievements in the form of stock rights and may immediately obtain the preferential policy of temporarily not collecting the income tax without the examination from the taxation administrative organs. However, the Notice also requires the taxation administrative organs to strengthen the management of the application of such preferential policy. If the above institutions and the award-winners fail to provide relevant materials or provide false materials and conceal the circumstances, then the award-winners must not enjoy such preferential policy.
Saturday, September 22, 2007
Thursday, August 30, 2007
China takes action to further control foreign-invested real estate industry
On May 23, 2007, the Ministry of Commerce and State Administration of Foreign Exchange jointly issue Notification on Further Strengthening and Standardizing the Examination and Approval of Foreign Direct Investment in Real Estate Industry. In accordance with the Notification:
A. the State will strengthen the examination, approval and supervision of foreign-invested real estate enterprises, and strictly control foreign investment in top grade real estate;
B. in case of applying for starting a real estate company, the land use right and the ownership of real estate building shall have been obtained or pre-contract on land use right assignment/real estate property purchase has been signed with land administration department or land developer/owner of real estate building. Otherwise the authority shall not approve the establishment of such foreign-invested real estate enterprise;
C. If the existing foreign-invested company wants to expand its business scope and engage in real estate development or operation, or foreign-invested real estate company wants to conduct new real estate project development. It shall go through relevant formalities as required by Chinese law and apply with the examination and approval authority;
D. The Chinese party and the foreign party to the foreign-invested real estate enterprise shall not conclude clauses which guarantee fixed return or fixed turn in disguised form for any party by any means;
E. The local authority responsible for examining and approving the establishment of foreign investment shall record the approved foreign-invested real estate companies for file at the Ministry of Commerce;
F. The authority responsible for foreign exchange administration and designated foreign exchange bank shall not handle procedure of settlement, sale and remittance of capital exchange for foreign-invested real estate companies who have not completed the procedure for record for file in the Ministry of Commerce or have not passed the joint annual inspection on foreign-invested enterprises.
A. the State will strengthen the examination, approval and supervision of foreign-invested real estate enterprises, and strictly control foreign investment in top grade real estate;
B. in case of applying for starting a real estate company, the land use right and the ownership of real estate building shall have been obtained or pre-contract on land use right assignment/real estate property purchase has been signed with land administration department or land developer/owner of real estate building. Otherwise the authority shall not approve the establishment of such foreign-invested real estate enterprise;
C. If the existing foreign-invested company wants to expand its business scope and engage in real estate development or operation, or foreign-invested real estate company wants to conduct new real estate project development. It shall go through relevant formalities as required by Chinese law and apply with the examination and approval authority;
D. The Chinese party and the foreign party to the foreign-invested real estate enterprise shall not conclude clauses which guarantee fixed return or fixed turn in disguised form for any party by any means;
E. The local authority responsible for examining and approving the establishment of foreign investment shall record the approved foreign-invested real estate companies for file at the Ministry of Commerce;
F. The authority responsible for foreign exchange administration and designated foreign exchange bank shall not handle procedure of settlement, sale and remittance of capital exchange for foreign-invested real estate companies who have not completed the procedure for record for file in the Ministry of Commerce or have not passed the joint annual inspection on foreign-invested enterprises.
Sunday, August 26, 2007
China's first anti-monopoly law to be voted
BEIJING, Aug. 24-- China's first anti-monopoly law, which requires foreign purchases of Chinese companies to go through national security checks, is expected to be put for a vote later this month after being mulled for 13 years.
The draft law is "mature and ready for adoption," the Law Committee of the National People's Congress (NPC) told the ongoing session of the NPC Standing Committee on Friday when submitting the bill for consideration.
The draft said, "besides anti-monopoly checks stipulated by this law, foreign mergers and acquisitions of domestic companies or foreign capital investing in domestic companies' operation in other forms should go through national security checks according to relevant laws and regulations if the cases are related to the issue."
The draft bill, aiming to protect fair competition, prevent and check monopolistic behavior and maintain a regulated market place, was first drafted in 1994 and submitted for the first review in June 2006, for the second review in June 2007.
The anti-monopoly law is call economic constitution, which has been in place in more than 80 countries in the world.
Lawmakers have said China's socialist market economy has turned mature over more than one decade, and in current market circumstances, the introduction of an anti-monopoly law is imperative.
Besides the draft anti-monopoly law, the week-long session will also discuss draft laws on emergency response, employment promotion, labor dispute arbitration and recycling economy, and the draft amendment to the Law on the Administration of the Urban Real Estate, the Law on Science and Technology Progress and the Law on the Prevention and Control of Water Pollution.
The draft law is "mature and ready for adoption," the Law Committee of the National People's Congress (NPC) told the ongoing session of the NPC Standing Committee on Friday when submitting the bill for consideration.
The draft said, "besides anti-monopoly checks stipulated by this law, foreign mergers and acquisitions of domestic companies or foreign capital investing in domestic companies' operation in other forms should go through national security checks according to relevant laws and regulations if the cases are related to the issue."
The draft bill, aiming to protect fair competition, prevent and check monopolistic behavior and maintain a regulated market place, was first drafted in 1994 and submitted for the first review in June 2006, for the second review in June 2007.
The anti-monopoly law is call economic constitution, which has been in place in more than 80 countries in the world.
Lawmakers have said China's socialist market economy has turned mature over more than one decade, and in current market circumstances, the introduction of an anti-monopoly law is imperative.
Besides the draft anti-monopoly law, the week-long session will also discuss draft laws on emergency response, employment promotion, labor dispute arbitration and recycling economy, and the draft amendment to the Law on the Administration of the Urban Real Estate, the Law on Science and Technology Progress and the Law on the Prevention and Control of Water Pollution.
Thursday, August 16, 2007
Salt VAT rate will be adjusted
On July 26, 2007, the Ministry of Finance and State General Taxation issued Notification on adjustment of VAT rate for industrial and edible salt. According to this Notification, from September 1, 2007, The VAT rate for salt will be adjusted from 17% to 13%.
Wednesday, August 15, 2007
Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of Hong Kong
On 14th July 2006, the Arrangement on Reciprocal Recognition and Enforcement of Judgment in Civil and Commercial matters (“the Arrangement”) was signed between Mainland China and Hong Kong. The Arrangement has not yet taken effect. To give effect to the Arrangement, a judicial interpretation is required to be promulgated in Mainland China and implementing legislation is required to be passed in Hong Kong; On the Hong Kong side, a Mainland Judgment (Reciprocal Enforcement) Bill (“the Bill”) was gazetted on 23rd February 2007 and the 1st reading of the Bill took place on 7th March 2007. Since the implementation of the Arrangement will have significant impact on cross-border and commercial activities between Mainland China and Hong Kong, a Bills Committee has been formed on 9th March 2007 to study the Bill.
Application
Prior to the signing of the Arrangement, there was no reciprocal enforcement of court judgments between the courts of Mainland China and the courts of Hong Kong. The Arrangement now provides a way to enforce cross-border judgments but it applies only to judgments that satisfy the following criteria:
1) Commercial contracts that result in a judgment for payment of money;
2) Judgments of courts above the Intermediate People’s Courts in Mainland and the courts above the District Court in Hong Kong;
3) A valid clause in the commercial contract stating which court that has exclusive jurisdiction; and
4) Judgments that are final and conclusive, which includes any judgment, ruling, conciliation statement and order of payment in Mainland China, and includes any judgment, order and allocatur in the case of Hong Kong.
Grounds of refusal
The application for recognition and enforcement of a judgment will be refused under the following circumstances:
1) The choice of court agreement is invalid under the place of the original trial, unless the chosen court has determined that the choice of court agreement is valid;
2) The judgment has been fully executed;
3) The court of the place where enforcement is sought has exclusive jurisdiction over the case according to its law;
4) The losing party was not summoned to the original court or has not been given sufficient time to defend his case;
5) The judgment has been obtained by fraud; or
6) The court of the place where enforcement is sought has made a prior judgment on the same cause of action.
Further, an application for recognition and enforcement of a judgment shall be refused by the court concerned if:
1) The People’s Court of Mainland China considers that the enforcement of the Hong Kong judgment is contrary to the social and public interest of Mainland China; or
2) The Hong Kong Court considers that the enforcement of Mainland China judgment is contrary to the public policy of Hong Kong.
Practical consideration
In principle, the Arrangement should facilitate a judgment creditor to enforce a money judgment in a more expeditious manner. We shall now look into the practical issues that may be encountered when one seeks reciprocal recognition and enforcement of judgments between Mainland China and Hong Kong.
Application
The Arrangement has limited application. It is only applicable for commercial contracts. Contracts relating to employment, marriage, winding up, bankruptcy or consumer matters will not be covered. Further, the court may not enforce judgments for equitable reliefs such as orders for specific performance or injunctions.
It is pertinent to have a valid exclusive jurisdiction clause in the commercial contract concerned. If the subject matter of the commercial contract is by law subject to the exclusive jurisdiction of a specific court, then the application for reciprocal enforcement may be refused if the exclusive jurisdiction clause in the contract provides otherwise and hence the clause being invalid. For example, according to the laws of Hong Kong and Mainland China, the court where the immovable property is situated assumes exclusive jurisdiction. If a commercial contract regarding Hong Kong real estate issues states that Mainland China court has exclusive jurisdiction, the said clause is invalid and unenforceable.
Grounds of refusal
Where a Mainland judgment is contrary to the “public policy of Hong Kong” or a Hong Kong judgment that is contrary to the “social and public interest of Mainland China”, the judgment will not be reciprocally recognized and enforced. Due to the different legal systems in Hong Kong and in Mainland China, the respective courts do not necessarily share the same view on the definition of “public policy” and “social and public interest”. Under the common law system, “public policy” is a legal concept which is construed narrowly whilst Mainland China courts consider “social and public interest” under the administrative and political spectrum.
Procedure and time limitation
The application for reciprocal enforcement requires the applicant to provide a copy of the judgment sealed by the court which made the final judgment or a certificate issued by the original court that verifies the finality of the judgment. The applicant also needs to provide the proof of identity (including individuals or legal corporation).
The Arrangement provides that an application for reciprocal enforcement shall be governed by the jurisdiction where the enforcement is sought. The time limit for application where one or both parties are individuals is one year and if both parties are legal persons, the limitation period is six months.
Conclusion
While the Arrangement may provide a mechanism to recognize and enforce money judgment reciprocally between Mainland China and Hong Kong, its application is limited and there are practical difficulties on effective implementation of the Arrangement. Having said that, both places are striving their best efforts to instigate appropriate legislations and promulgate relevant judicial interpretation to give full effect to the Arrangement. The signing of the Arrangement is a breakthrough for the judicial systems in Mainland China and in Hong Kong. Whether the Arrangement will become a useful and effective system for reciprocal recognition and enforcement of judgments relies on the continuing effort and development by the Mainland China and Hong Kong.
Application
Prior to the signing of the Arrangement, there was no reciprocal enforcement of court judgments between the courts of Mainland China and the courts of Hong Kong. The Arrangement now provides a way to enforce cross-border judgments but it applies only to judgments that satisfy the following criteria:
1) Commercial contracts that result in a judgment for payment of money;
2) Judgments of courts above the Intermediate People’s Courts in Mainland and the courts above the District Court in Hong Kong;
3) A valid clause in the commercial contract stating which court that has exclusive jurisdiction; and
4) Judgments that are final and conclusive, which includes any judgment, ruling, conciliation statement and order of payment in Mainland China, and includes any judgment, order and allocatur in the case of Hong Kong.
Grounds of refusal
The application for recognition and enforcement of a judgment will be refused under the following circumstances:
1) The choice of court agreement is invalid under the place of the original trial, unless the chosen court has determined that the choice of court agreement is valid;
2) The judgment has been fully executed;
3) The court of the place where enforcement is sought has exclusive jurisdiction over the case according to its law;
4) The losing party was not summoned to the original court or has not been given sufficient time to defend his case;
5) The judgment has been obtained by fraud; or
6) The court of the place where enforcement is sought has made a prior judgment on the same cause of action.
Further, an application for recognition and enforcement of a judgment shall be refused by the court concerned if:
1) The People’s Court of Mainland China considers that the enforcement of the Hong Kong judgment is contrary to the social and public interest of Mainland China; or
2) The Hong Kong Court considers that the enforcement of Mainland China judgment is contrary to the public policy of Hong Kong.
Practical consideration
In principle, the Arrangement should facilitate a judgment creditor to enforce a money judgment in a more expeditious manner. We shall now look into the practical issues that may be encountered when one seeks reciprocal recognition and enforcement of judgments between Mainland China and Hong Kong.
Application
The Arrangement has limited application. It is only applicable for commercial contracts. Contracts relating to employment, marriage, winding up, bankruptcy or consumer matters will not be covered. Further, the court may not enforce judgments for equitable reliefs such as orders for specific performance or injunctions.
It is pertinent to have a valid exclusive jurisdiction clause in the commercial contract concerned. If the subject matter of the commercial contract is by law subject to the exclusive jurisdiction of a specific court, then the application for reciprocal enforcement may be refused if the exclusive jurisdiction clause in the contract provides otherwise and hence the clause being invalid. For example, according to the laws of Hong Kong and Mainland China, the court where the immovable property is situated assumes exclusive jurisdiction. If a commercial contract regarding Hong Kong real estate issues states that Mainland China court has exclusive jurisdiction, the said clause is invalid and unenforceable.
Grounds of refusal
Where a Mainland judgment is contrary to the “public policy of Hong Kong” or a Hong Kong judgment that is contrary to the “social and public interest of Mainland China”, the judgment will not be reciprocally recognized and enforced. Due to the different legal systems in Hong Kong and in Mainland China, the respective courts do not necessarily share the same view on the definition of “public policy” and “social and public interest”. Under the common law system, “public policy” is a legal concept which is construed narrowly whilst Mainland China courts consider “social and public interest” under the administrative and political spectrum.
Procedure and time limitation
The application for reciprocal enforcement requires the applicant to provide a copy of the judgment sealed by the court which made the final judgment or a certificate issued by the original court that verifies the finality of the judgment. The applicant also needs to provide the proof of identity (including individuals or legal corporation).
The Arrangement provides that an application for reciprocal enforcement shall be governed by the jurisdiction where the enforcement is sought. The time limit for application where one or both parties are individuals is one year and if both parties are legal persons, the limitation period is six months.
Conclusion
While the Arrangement may provide a mechanism to recognize and enforce money judgment reciprocally between Mainland China and Hong Kong, its application is limited and there are practical difficulties on effective implementation of the Arrangement. Having said that, both places are striving their best efforts to instigate appropriate legislations and promulgate relevant judicial interpretation to give full effect to the Arrangement. The signing of the Arrangement is a breakthrough for the judicial systems in Mainland China and in Hong Kong. Whether the Arrangement will become a useful and effective system for reciprocal recognition and enforcement of judgments relies on the continuing effort and development by the Mainland China and Hong Kong.
Thursday, July 5, 2007
Draft on Foreign M&As Gets 2nd Reading
China's top legislature last week read for the second time the draft anti-monopoly law which requires foreign purchases of Chinese companies to be scrutinized to ensure there is no negative effect on the national security.
The draft of China's first anti-monopoly law was submitted to the 28th session of the Standing Committee of the National People's Congress for a second reading.
"Foreign mergers and acquisitions of domestic companies or foreign capital investing in domestic companies' operations in other forms should be examined according to relevant laws and regulations if the cases are related to national security," the draft reads.
According to official statistics, the number of foreign M&A cases only accounted for five percent of all forms of foreign direct investment in China annually before 2004. However, the proportion rapidly increased to 11 percent in 2004 and nearly 20 percent in 2005.
Foreign companies have even begun to acquire major state-owned enterprises or companies with famous brands in recent years, arousing concerns about China's economic security.
Zhang Yansheng, director of the International Economic Research Institute under the National Development and Reform Commission, said it is crucial to require foreign purchases of domestic companies to go through stringent state security checks as well as a thorough anti-monopoly monitoring.
The draft of China's first anti-monopoly law was submitted to the 28th session of the Standing Committee of the National People's Congress for a second reading.
"Foreign mergers and acquisitions of domestic companies or foreign capital investing in domestic companies' operations in other forms should be examined according to relevant laws and regulations if the cases are related to national security," the draft reads.
According to official statistics, the number of foreign M&A cases only accounted for five percent of all forms of foreign direct investment in China annually before 2004. However, the proportion rapidly increased to 11 percent in 2004 and nearly 20 percent in 2005.
Foreign companies have even begun to acquire major state-owned enterprises or companies with famous brands in recent years, arousing concerns about China's economic security.
Zhang Yansheng, director of the International Economic Research Institute under the National Development and Reform Commission, said it is crucial to require foreign purchases of domestic companies to go through stringent state security checks as well as a thorough anti-monopoly monitoring.
Wednesday, July 4, 2007
China inaugurates free-trade harbor area in Dalian
China inaugurated a harbor area with preferential tax rates on Thursday in the northeastern city of Dalian, a major step towards forming a free trade zone between China, Japan and the Republic of Korea (ROK).
The Dayaowan Bonded Harbor Area, located at the Dagushan Peninsula in the northeastern part of Dalian, enjoys preferential taxation and foreign exchange policies, said Zhang Shikun, director of the Dalian Bonded Area Administrative Committee.
"It will remove tariffs for foreign cargo and offer tax rebates for domestic cargo. It will also exempt businesses from value added taxes and consumption taxes if they trade with each other," Zhang said.
Analysts predict the efficiency of logistics will be raised by 20 percent after the port is put into operation.
The first phase of the area covers 3.06 square kilometers and includes warehouses, cold storage facilities, a container terminal and processing and logistics services.
About 200 million yuan (25 million U.S dollars) has been spent on the construction of the area since August 31 last year, when the State Council approved its establishment.
The second phase is expected to be finished by the end of next year, expanding the area to 6.88 square km.
The Dalian port is the seventh largest in China and handled 200million tons of cargo and 30 million containers (TEUs) last year.
The Dayaowan Bonded Harbor Area is the second of its kind in China, following the operation of the Shanghai-based Yangshan Bonded Harbor Area in December 2005. The State Council has also approved a third such area, the Dongjiang Bonded Harbor Area whichis under construction in north China's Tianjin Municipality.
Analysts say the Dayaowan area is expected to increase China's share in the northeast Asian shipping industry, and is also considered a major step towards forming a free trade zone between China, Japan and ROK, which political leaders and business circles of the three countries have repeatedly called for.
Dalian has advantages for a free trade zone in terms of its location and its close economic and cultural links with neighboring countries, said Wang Jun, associate professor on logistics studies with the Dalian Maritime University.
Dalian is one of the most successful Chinese cities in attracting Japanese and ROK businesses -- half of the city's overseas-funded businesses come from Japan and the ROK, more than 5,000 in number, and 40 percent of the city's foreign trade comes from the two countries, local government statistics show.
"The internationalization of Dalian has been largely due to Japan and the ROK, and Dalian has every advantage for building a free trade zone in northeast Asia," said Xia Deren, mayor of Dalian.
"We expect to develop the area of about 50 square km surrounding the Dagushan Peninsula into a free trade zone on the basis of the Dayaowan Bonded Harbor Area," he said.
"But, of course, it has to depend on the country's overall economic layout," he added.
The Dayaowan Bonded Harbor Area, located at the Dagushan Peninsula in the northeastern part of Dalian, enjoys preferential taxation and foreign exchange policies, said Zhang Shikun, director of the Dalian Bonded Area Administrative Committee.
"It will remove tariffs for foreign cargo and offer tax rebates for domestic cargo. It will also exempt businesses from value added taxes and consumption taxes if they trade with each other," Zhang said.
Analysts predict the efficiency of logistics will be raised by 20 percent after the port is put into operation.
The first phase of the area covers 3.06 square kilometers and includes warehouses, cold storage facilities, a container terminal and processing and logistics services.
About 200 million yuan (25 million U.S dollars) has been spent on the construction of the area since August 31 last year, when the State Council approved its establishment.
The second phase is expected to be finished by the end of next year, expanding the area to 6.88 square km.
The Dalian port is the seventh largest in China and handled 200million tons of cargo and 30 million containers (TEUs) last year.
The Dayaowan Bonded Harbor Area is the second of its kind in China, following the operation of the Shanghai-based Yangshan Bonded Harbor Area in December 2005. The State Council has also approved a third such area, the Dongjiang Bonded Harbor Area whichis under construction in north China's Tianjin Municipality.
Analysts say the Dayaowan area is expected to increase China's share in the northeast Asian shipping industry, and is also considered a major step towards forming a free trade zone between China, Japan and ROK, which political leaders and business circles of the three countries have repeatedly called for.
Dalian has advantages for a free trade zone in terms of its location and its close economic and cultural links with neighboring countries, said Wang Jun, associate professor on logistics studies with the Dalian Maritime University.
Dalian is one of the most successful Chinese cities in attracting Japanese and ROK businesses -- half of the city's overseas-funded businesses come from Japan and the ROK, more than 5,000 in number, and 40 percent of the city's foreign trade comes from the two countries, local government statistics show.
"The internationalization of Dalian has been largely due to Japan and the ROK, and Dalian has every advantage for building a free trade zone in northeast Asia," said Xia Deren, mayor of Dalian.
"We expect to develop the area of about 50 square km surrounding the Dagushan Peninsula into a free trade zone on the basis of the Dayaowan Bonded Harbor Area," he said.
"But, of course, it has to depend on the country's overall economic layout," he added.
Tuesday, July 3, 2007
The Ministry of Commerce Issued “Administrative Measures for Archival Filing of Commercial Franchise” and “Administrative Measures for the Information
On February 6, 2007, the State Council issued Order No. 458 to proclaim Administrative Provisions on Commercial Franchise. In order to implement the Provisions, the Ministry of Commerce passed on April 30, 2007 the Administrative Measures for Archival Filing of Commercial Franchise and the Administrative Measures for the Information Disclosure of Commercial Franchise, which came into force on May 1, 2007.
1. Archive management
1) Filing authority
The Ministry of Commerce and administrative department of commerce at provincial level are filing authority of commercial franchise. Those who are engaged in commercial franchise within a province, autonomous region or municipal city directly governed by the State Council shall put their business on file with the administrative department of commerce at provincial level where the franchiser is located. Those who are engaged in commercial franchise inter-province, inter-region or inter municipal city shall put their business on file with the Ministry of Commerce. The filing of commercial franchise all over the country is connected by internet. Franchisors, complied with Administrative Provisions, shall file on the website of the government.
2) Filing materials
Franchisor shall submit the following materials to the filing authority:
(1) Basic information of the commercial franchise, distribution of shops of all franchisee in China, marketing proposal of franchisor;
(2) Copy of business license or certificate of other entities;
(3) Copy of certificate of trademark right, patent right or other operative resources relevant to franchise;
(4) Certifying document issued by administrative department of commerce at city level conformed with Article 7(2) of the Provisions; Business certificate of the direct sales stores if the store is within the territory of China.
(5) Catalogue of the franchise hand book.
(6) Other necessary documents
3) Filing Procedure
The franchisor shall, within 15 days after the franchisor first comes into contract with the franchisee within the territory of the PRC, file its contract with the filing authority.The filing authority shall, within 10 days from the date of receiving the required documents and materials from the franchisor, put the contract on file and have it published on the website of the Ministry of Commerce. Should the submitted documents or materials be inadequate, the filing authority may ask for supplementary submission from the franchisor within 7days. The filing authority shall within 10 days after supplementary submission put the contract on file.The general public may find out the name of the enterprise, the registered trademark, the enterprise’s logo, patent, know-how and other operative resources used in the commercial franchise services and also other commercial franchise information on the website of the Ministry of Commerce.
2. Management of the Information Disclosure
1) Time of the Disclosure
The franchisor shall at least 30 days before coming into the commercial franchise contract, disclose to the franchisee the information related to franchise in written form and provide contract of commercial franchise.
2) Content to be Disclosed
The information to be disclosed by the franchisor shall include the following:
(1) The basic information of the franchisor and its service, e.g. the name, address, contact means, legal representative, general manager, the amount of registered capital, business scope of the franchisor and the present number, address and phone number of direct operative shops of the franchisor.
(2) The basic information of the operative resources. The franchisor shall in written form explain to the franchisee the available registered trademarks, the enterprise’s logo, patent, know-how, operation pattern and other operative resources.
(3) The basic information of the franchise fees, including: the type, sum, standard and payment means of the fees charged by the franchisor and on third party’s behalf; collection of guarantee, condition, time and method for return of the guarantee etc.
(4) The price and conditions for supply of the products, services or equipments to the franchisee, e.g. whether or not the franchisee must purchase from the franchisor or its related company the products, services or equipments and the relevant price and conditions.
(5) The continue provision of service by the franchisor, e.g. the detailed content, means of provision and implementing plans, including the place, means and duration of the business training.
(6) The means and content of direction to and supervision over the business operated by the franchisee.
(7) Related information of the franchisee with the territory of the PRC, e.g. the actual or anticipated average sales amount, cost, gross and net profit of the franchisee.
(8) Recent 2 years’ financial accounting and auditing report abstracts produced by accounting or auditing agencies.
3) Other Items
Before disclosing information to the franchisee, the franchisor has the right to request the franchisee to sign a confidentiality contract. After the disclosure, the franchisee shall produce to the franchisor a signed copy of receipt as to the known information in duplicate, one for the franchisee and the other for the franchisor.Should the franchisor conceal any information that should be disclosed or disclose any wrong information, the franchisee may dissolve the commercial franchise contract.
1. Archive management
1) Filing authority
The Ministry of Commerce and administrative department of commerce at provincial level are filing authority of commercial franchise. Those who are engaged in commercial franchise within a province, autonomous region or municipal city directly governed by the State Council shall put their business on file with the administrative department of commerce at provincial level where the franchiser is located. Those who are engaged in commercial franchise inter-province, inter-region or inter municipal city shall put their business on file with the Ministry of Commerce. The filing of commercial franchise all over the country is connected by internet. Franchisors, complied with Administrative Provisions, shall file on the website of the government.
2) Filing materials
Franchisor shall submit the following materials to the filing authority:
(1) Basic information of the commercial franchise, distribution of shops of all franchisee in China, marketing proposal of franchisor;
(2) Copy of business license or certificate of other entities;
(3) Copy of certificate of trademark right, patent right or other operative resources relevant to franchise;
(4) Certifying document issued by administrative department of commerce at city level conformed with Article 7(2) of the Provisions; Business certificate of the direct sales stores if the store is within the territory of China.
(5) Catalogue of the franchise hand book.
(6) Other necessary documents
3) Filing Procedure
The franchisor shall, within 15 days after the franchisor first comes into contract with the franchisee within the territory of the PRC, file its contract with the filing authority.The filing authority shall, within 10 days from the date of receiving the required documents and materials from the franchisor, put the contract on file and have it published on the website of the Ministry of Commerce. Should the submitted documents or materials be inadequate, the filing authority may ask for supplementary submission from the franchisor within 7days. The filing authority shall within 10 days after supplementary submission put the contract on file.The general public may find out the name of the enterprise, the registered trademark, the enterprise’s logo, patent, know-how and other operative resources used in the commercial franchise services and also other commercial franchise information on the website of the Ministry of Commerce.
2. Management of the Information Disclosure
1) Time of the Disclosure
The franchisor shall at least 30 days before coming into the commercial franchise contract, disclose to the franchisee the information related to franchise in written form and provide contract of commercial franchise.
2) Content to be Disclosed
The information to be disclosed by the franchisor shall include the following:
(1) The basic information of the franchisor and its service, e.g. the name, address, contact means, legal representative, general manager, the amount of registered capital, business scope of the franchisor and the present number, address and phone number of direct operative shops of the franchisor.
(2) The basic information of the operative resources. The franchisor shall in written form explain to the franchisee the available registered trademarks, the enterprise’s logo, patent, know-how, operation pattern and other operative resources.
(3) The basic information of the franchise fees, including: the type, sum, standard and payment means of the fees charged by the franchisor and on third party’s behalf; collection of guarantee, condition, time and method for return of the guarantee etc.
(4) The price and conditions for supply of the products, services or equipments to the franchisee, e.g. whether or not the franchisee must purchase from the franchisor or its related company the products, services or equipments and the relevant price and conditions.
(5) The continue provision of service by the franchisor, e.g. the detailed content, means of provision and implementing plans, including the place, means and duration of the business training.
(6) The means and content of direction to and supervision over the business operated by the franchisee.
(7) Related information of the franchisee with the territory of the PRC, e.g. the actual or anticipated average sales amount, cost, gross and net profit of the franchisee.
(8) Recent 2 years’ financial accounting and auditing report abstracts produced by accounting or auditing agencies.
3) Other Items
Before disclosing information to the franchisee, the franchisor has the right to request the franchisee to sign a confidentiality contract. After the disclosure, the franchisee shall produce to the franchisor a signed copy of receipt as to the known information in duplicate, one for the franchisee and the other for the franchisor.Should the franchisor conceal any information that should be disclosed or disclose any wrong information, the franchisee may dissolve the commercial franchise contract.
Sunday, June 24, 2007
China to Further Regulate Commercial Franchise
The Regulation on Administration of Commercial Franchise ("Regulation") was issued by the State Council (Decree No. 485) on February 6, 2007 and will come into force as of May 1, 2007. The Regulation applies to the franchisors that have been engaging in franchising activities before and after the promulgation of the Regulation, including five chapters and thirty four articles.
Franchisors and commercial franchise
According to the Regulation, "franchisors" refer to the enterprise which is in possession of a registered trademark, enterprise logo, patent, know-how and any other business resource. The "Commercial franchise" as mentioned in the regulation means business activities whereby the franchisor allows the franchisee the use of the operational resources through contracts, and the franchisee undertakes business under the unified business format in accordance with the provisions of stipulated in the contracts and pays franchise fees to the franchisor.
The basic requirements for franchising activities
1. Only the franchisors prescribed in the Regulation may carry out franchising activities, no entities or individuals other than enterprises may engage in franchising activities as franchisors;
2. A franchisor engaged in franchising activities shall own a well-developed business format and has the capabilities to continuously provide operational guidance, technical support, business training, and other services to the franchisee;
3. A franchisor engaged in franchising activities shall own at least two directly operated outlets, and shall be in operation for more than one year.
4. Within 15 days after the execution of the initial franchise contract, a franchisor shall file with the commercial administration authority and put on records in accordance with the Regulation. For the franchisors who have been engaging in franchising activities before the promulgation of the Regulation, they shall put on records within one year starting from the promulgation date of this Regulation..
Commercial franchise contract
1. A franchise contract shall be signed by franchisor and franchisee in written form and meets the requirements of the Regulation;
2. The franchisor and the franchisee shall set forth in the franchise contract that the franchisee is entitled to unilaterally terminate the franchise contract within a certain period after the contract is signed;
3. The term of the franchise as stipulated in the franchise contract shall not be less than three years, unless otherwise agreed to by the franchisee.
Information disclosure
The Regulation prescribes that the franchisor shall establish and implement a complete information disclosure system. The franchisor shall provide the franchisee with the information in written form and the text of the franchise contract at least 30 days before the franchise contract is signed.
The information shall be disclosed by the franchisor include the basic information of the franchisor and its legal representative, commercial reputation record, the business resource owned by the franchisor, the capacity of the franchisor to provide service to the franchisee, specific measures in respect of the guidance and supervision over the operational activities of the franchisee, the amount and payment method of the franchise fees and investment budget for the franchised outlets.
Franchisors and commercial franchise
According to the Regulation, "franchisors" refer to the enterprise which is in possession of a registered trademark, enterprise logo, patent, know-how and any other business resource. The "Commercial franchise" as mentioned in the regulation means business activities whereby the franchisor allows the franchisee the use of the operational resources through contracts, and the franchisee undertakes business under the unified business format in accordance with the provisions of stipulated in the contracts and pays franchise fees to the franchisor.
The basic requirements for franchising activities
1. Only the franchisors prescribed in the Regulation may carry out franchising activities, no entities or individuals other than enterprises may engage in franchising activities as franchisors;
2. A franchisor engaged in franchising activities shall own a well-developed business format and has the capabilities to continuously provide operational guidance, technical support, business training, and other services to the franchisee;
3. A franchisor engaged in franchising activities shall own at least two directly operated outlets, and shall be in operation for more than one year.
4. Within 15 days after the execution of the initial franchise contract, a franchisor shall file with the commercial administration authority and put on records in accordance with the Regulation. For the franchisors who have been engaging in franchising activities before the promulgation of the Regulation, they shall put on records within one year starting from the promulgation date of this Regulation..
Commercial franchise contract
1. A franchise contract shall be signed by franchisor and franchisee in written form and meets the requirements of the Regulation;
2. The franchisor and the franchisee shall set forth in the franchise contract that the franchisee is entitled to unilaterally terminate the franchise contract within a certain period after the contract is signed;
3. The term of the franchise as stipulated in the franchise contract shall not be less than three years, unless otherwise agreed to by the franchisee.
Information disclosure
The Regulation prescribes that the franchisor shall establish and implement a complete information disclosure system. The franchisor shall provide the franchisee with the information in written form and the text of the franchise contract at least 30 days before the franchise contract is signed.
The information shall be disclosed by the franchisor include the basic information of the franchisor and its legal representative, commercial reputation record, the business resource owned by the franchisor, the capacity of the franchisor to provide service to the franchisee, specific measures in respect of the guidance and supervision over the operational activities of the franchisee, the amount and payment method of the franchise fees and investment budget for the franchised outlets.
Friday, June 22, 2007
Enterprise Income Tax Law Passed, Same Tax Rate Applied to Domestic and Foreign-invested Enterprise
On March 16, 2007, the Enterprise Income Tax Law was passed by the National People’s Congress. The Law covers 8 chapters and totally 60 articles, including General Provisions, Taxable Amount of Income, Amount of Payable Taxes, Preferential Tax Treatments, Withholding by Sources, Special Adjustments to Tax Payments, Administration of Tax Collection and Supplementary Provisions and will go into effect on January 1st, 2008.
The Enterprise Income Tax Law provides that the payers of the enterprise income tax are classified into resident and non-resident enterprises. "Resident enterprise" as mentioned in this Law refers to an enterprise which is established inside China, or which is established under the law of a foreign country (region) but whose actual institution of management is inside China, and "non-resident enterprise" refers to an enterprise established under the law of a foreign country (region), whose actual institution of management is not inside China but which has institutions or establishments inside China; or which has not any institution or establishment inside China but which has incomes sourced in China. The enterprise income tax rate is 25%, and the tax rate of 20% is applied to those “non-resident enterprises” without the institution or establishment inside China, or those have not any institution or establishment inside China but which has incomes sourced in China.
The government gives preferential income tax treatment to those state-supported and encouraged industries and projects. Furthermore, in terms of those qualified enterprises with insignificant profit, the 20% tax rate shall be applied. And the income tax rate of 15% will be levied against those hi-tech enterprises for key cultivation
The Enterprise Income Tax Law provides that the payers of the enterprise income tax are classified into resident and non-resident enterprises. "Resident enterprise" as mentioned in this Law refers to an enterprise which is established inside China, or which is established under the law of a foreign country (region) but whose actual institution of management is inside China, and "non-resident enterprise" refers to an enterprise established under the law of a foreign country (region), whose actual institution of management is not inside China but which has institutions or establishments inside China; or which has not any institution or establishment inside China but which has incomes sourced in China. The enterprise income tax rate is 25%, and the tax rate of 20% is applied to those “non-resident enterprises” without the institution or establishment inside China, or those have not any institution or establishment inside China but which has incomes sourced in China.
The government gives preferential income tax treatment to those state-supported and encouraged industries and projects. Furthermore, in terms of those qualified enterprises with insignificant profit, the 20% tax rate shall be applied. And the income tax rate of 15% will be levied against those hi-tech enterprises for key cultivation
National People’s Congress Passed Property Law
On March 16, 2007, the National People’s Congress passed Property Law, which will come into effect on October, 1st, 2007. Property Law constitutes five parts (19 chapters 247 articles), including General Principles, Proprietorship, Usufructaury Rights, Security Interest and Possession. The relatively more important content of the Property Law covers the following issues: Firstly, it expressly gives equal protection on state-owned, collective and private property. Secondly, it clearly sets forth the scope of state-owned property, the exercise of state ownership and strengthened protection on state-owned property. Thirdly, it provides that the individual enjoys the ownership of its real properties and chattels such as legitimate income, house, consumer goods, manufacture tools and raw materials, and it stipulates provisions regarding those issues concerned by the public, such as the owner’s portioned ownership of the building areas. Fourthly, it explicitly sets forth the issue of compensation for expropriation, e.g. it provides the reason and content of expropriation. Fifthly, it provides the possession, and specifies the protection on possession and infringement liability of adverse possessor so as to keep the social order and holder’s legitimate interests.
Thursday, June 21, 2007
PROCEDURE FOR FOREIGN INVESTORS TO ENTER CHINA
Visa:
Foreign investors who wish to visit China for business may approach Chinese partners directly with purpose and time of the visit The Chinese partner can apply for visa notification on behalf of the foreign investors at a local foreign affairs organization if the visit is receptacle. Once foreign investors have received the visa notification from Chinese domestic authorized organization, the foreign investors may apply for entry visa to China at a local Chinese embassy or consulate.
Apply for Employment License, Expert Certificate, Residence Certificate:
A foreign invested enterprise, which is intending to employ expatriates, may apply for "the employment license for the expatriates in the People's Republic of China" (hereinafter referred to as employment license) at the Shanghai Labor & Social insurance Bureau with the following documents: company business license, certificate of approval for setting up enterprise, application report, and the expatriates' personal documents. With the employment license the enterprise may apply for profession visa notification at Shanghai Municipal Foreign Economic Relations and Trade Commission (SMERT), which is authorized by the Ministry of Foreign Affairs of the People's Republic of China. The expatriates can apply for profession visa to entry into China at a local Chinese Embassy with the fax copy of profession visa notification and the employment license. After entering China, the expatriates can apply for employment certificate at Shanghai Labor & Social Insurance Bureau with the following documents: profession visa, employment license, employment contract, health certificate and photos of the expatriates within 15 days. With the employment certificate, the expatriates can apply for residence certificate at the Division of Exit and Entry Administration of Shanghai Public Security Bureau.
If a foreign-invested company will hire employees from Hong Kong, Macao and Taiwan, the company shall submit its application to the Office of Administrating the employment of the personnel from Hong Kong, Macao and Taiwan set up in Shanghai Labor and Social Insurance Bureau. The Employment License for the Personnel from Hong Kong, Macao and Taiwan will be issued after the application has been examined and approved by above-mentioned Bureau and the personnel from Hong Kong, Macao and Taiwan shall apply for the residence certificate with the Division of Exit and Entry Administration set up in Shanghai Public Security Bureau on the strength of the Employment License.
Shanghai agents, which provides service to foreign enterprises for establishing representative offices in Shanghai, can go to SMERT to apply for profession visa notification for the chief representative and representatives on behalf of the foreign enterprise. After receiving the profession visa notification, the chief representative and representatives may apply for profession visa at a local Chinese embassy or consulate for entering into China. Upon entering China, they can apply for work permit certificate at Shanghai Commercial and Industrial Administration Bureau. The representatives can then go to Shanghai Labor & Social Insurance Bureau to apply for employment certificate with the following document: profession visa, work permit certificate, health condition certificate, photos. Then they can go to Shanghai Public Security Bureau to apply for residence certificate.
Foreign investors who wish to visit China for business may approach Chinese partners directly with purpose and time of the visit The Chinese partner can apply for visa notification on behalf of the foreign investors at a local foreign affairs organization if the visit is receptacle. Once foreign investors have received the visa notification from Chinese domestic authorized organization, the foreign investors may apply for entry visa to China at a local Chinese embassy or consulate.
Apply for Employment License, Expert Certificate, Residence Certificate:
A foreign invested enterprise, which is intending to employ expatriates, may apply for "the employment license for the expatriates in the People's Republic of China" (hereinafter referred to as employment license) at the Shanghai Labor & Social insurance Bureau with the following documents: company business license, certificate of approval for setting up enterprise, application report, and the expatriates' personal documents. With the employment license the enterprise may apply for profession visa notification at Shanghai Municipal Foreign Economic Relations and Trade Commission (SMERT), which is authorized by the Ministry of Foreign Affairs of the People's Republic of China. The expatriates can apply for profession visa to entry into China at a local Chinese Embassy with the fax copy of profession visa notification and the employment license. After entering China, the expatriates can apply for employment certificate at Shanghai Labor & Social Insurance Bureau with the following documents: profession visa, employment license, employment contract, health certificate and photos of the expatriates within 15 days. With the employment certificate, the expatriates can apply for residence certificate at the Division of Exit and Entry Administration of Shanghai Public Security Bureau.
If a foreign-invested company will hire employees from Hong Kong, Macao and Taiwan, the company shall submit its application to the Office of Administrating the employment of the personnel from Hong Kong, Macao and Taiwan set up in Shanghai Labor and Social Insurance Bureau. The Employment License for the Personnel from Hong Kong, Macao and Taiwan will be issued after the application has been examined and approved by above-mentioned Bureau and the personnel from Hong Kong, Macao and Taiwan shall apply for the residence certificate with the Division of Exit and Entry Administration set up in Shanghai Public Security Bureau on the strength of the Employment License.
Shanghai agents, which provides service to foreign enterprises for establishing representative offices in Shanghai, can go to SMERT to apply for profession visa notification for the chief representative and representatives on behalf of the foreign enterprise. After receiving the profession visa notification, the chief representative and representatives may apply for profession visa at a local Chinese embassy or consulate for entering into China. Upon entering China, they can apply for work permit certificate at Shanghai Commercial and Industrial Administration Bureau. The representatives can then go to Shanghai Labor & Social Insurance Bureau to apply for employment certificate with the following document: profession visa, work permit certificate, health condition certificate, photos. Then they can go to Shanghai Public Security Bureau to apply for residence certificate.
PROCEDURE FOR ESTABLISHING RESIDENTIAL REPRESENTATIVE OFFICES IN SHANGHAI BY OVERSEAS ENTERPRISES
To foster the development of international economic and trade relations, overseas enterprises can establish residential representative offices in Shanghai upon application and approval.
1. Submitting application
An overseas enterprise which is desirous of establishing a residential representative office in Shanghai may entrust an agency authorized by Shanghai Municipal Foreign Economic Relations & Trade Commission to handle this business in Shanghai to submit application on its behalf for establishing a residential representative office to the Shanghai Municipal Foreign Economic Relations & Trade Commission.
2. Documents required for application
The applicant shall complete "The Form for Establishing Residential Representative Office by Overseas Enterprises" and present the following documents:
(1) An application duly signed by the chairman of the board or general manager of the foreign enterprise with such details as the name of the residential representative office, names of the persons-in-charge, its scope of business, residential duration and its address, etc;
(2) A legal business certificate issued by competent authorities of the country or region where the applicant is located;
(3) A letter issued by a bank which has business relations with the applicant testifying to its financial and credit standing;
(4) Power of attorney issued by the applicant for the staff of its office and their curriculum vitae.
3. Examination and approval
The Shanghai Municipal Foreign Economic Relations & Trade Commission will examine the application of overseas enterprises for setting up residential representative offices in Shanghai. If the establishment is deemed necessary the Shanghai Municipal Foreign Economic Relations & Trade Commission will issue the certificate to the applicant upon approval.
4. Registration
With the certificate of approval and all the documents referred to in section 2, the applicant can register its residential representative office with the Shanghai Administration for industry and Commerce to obtain a registration certificate as well as a representative card.
1. Submitting application
An overseas enterprise which is desirous of establishing a residential representative office in Shanghai may entrust an agency authorized by Shanghai Municipal Foreign Economic Relations & Trade Commission to handle this business in Shanghai to submit application on its behalf for establishing a residential representative office to the Shanghai Municipal Foreign Economic Relations & Trade Commission.
2. Documents required for application
The applicant shall complete "The Form for Establishing Residential Representative Office by Overseas Enterprises" and present the following documents:
(1) An application duly signed by the chairman of the board or general manager of the foreign enterprise with such details as the name of the residential representative office, names of the persons-in-charge, its scope of business, residential duration and its address, etc;
(2) A legal business certificate issued by competent authorities of the country or region where the applicant is located;
(3) A letter issued by a bank which has business relations with the applicant testifying to its financial and credit standing;
(4) Power of attorney issued by the applicant for the staff of its office and their curriculum vitae.
3. Examination and approval
The Shanghai Municipal Foreign Economic Relations & Trade Commission will examine the application of overseas enterprises for setting up residential representative offices in Shanghai. If the establishment is deemed necessary the Shanghai Municipal Foreign Economic Relations & Trade Commission will issue the certificate to the applicant upon approval.
4. Registration
With the certificate of approval and all the documents referred to in section 2, the applicant can register its residential representative office with the Shanghai Administration for industry and Commerce to obtain a registration certificate as well as a representative card.
Guides of investing in China for Foreign Investors in Shanghai
Shanghai Foreign Investment Commission (FICS) is responsible for the examination and approval of foreign-invested projects. Except those subject to examination by the competent departments of the State Council, foreign-invested enterprises to be established in Shanghai should be examined and approved by the FICS and its entrusted Administration Commission of Pudong New Area and Administrative Committee of Waigaoqiao Free Trade Zone and people’s governments at district or county level, or the relevant industrial bureaus (hereinafter referred to as a whole as the examination and approval authorities).
1. A manufacturing project with its total investment of over USD 30 million, and other project with needs t be approved by the competent department of the State Council, shall be preliminarily examined by FICS and all related departments of the Shanghai Municipality and then submitted by FICS to the relevant department of the State Council for approval.
2. If a project with its total investment under USD 30 million is located in Pudong New Area, it shall be examined and approved by Shanghai Pudong New Area Administration Commission; If it is located in Shanghai Waigaoqiao Free Trade Zone, it shall be examined and approved by the Administrative Committee of Shanghai Waigaoqiao Free Trade Zone. For certain restricted projects, their projects proposals shall be pre-examined by FICS and related government departments and then submitted by FICS to the relevant department of the State Council for approval. An encouraged project shall be examined and approved by the people’s government at district, county level where the said project is located.
3. An encouraged or permitted project with its total investment under USD 10 million shall be examined and approved by the examination and approval authorities at district, county or bureau level where the said project is located.
4. Other projects except the said No. 1, 2, 3, shall be examined and approved by the FICS.
(A) Procedures for Establishing an Equity Joint Venture or a Contractual Joint Venture
1. Preparing and presenting project proposal
Chinese or foreign investors may choose their partners through various ways. After they are well acquainted with their counterpart’s business scope and credibility, and have reached agreement of cooperation, the Chinese party shall work out a project proposal and present it to the examination and approval authority. The examination and approval authority shall give a reply (approval or disapproval) within 20 days on receipt of the proposal.
The Chinese party shall apply to Shanghai Administrative Bureau for Industry and Commerce for the enterprise’s name registration after a positive reply.
2. Preparing and submitting feasibility study report
After the project is approved, the Chinese and foreign partners shall jointly prepare a feasibility study covering items such as market survey, financing, technological process, equipment, raw material (parts), site selecting, environment protection, labor protection, fire protection, infrastructure facilities, marketing, economic results, foreign exchange balance, etc. The examination and approval authority shall help to coordinate if there are any problems.
3. Submitting contract and articles of association
While the Chinese and foreign partners are preparing the feasibility study report, they may also draw up the contract and articles of association and submit them jointly to the examination and approval authority. The examination and approval authority shall give a reply (approval or disapproval) with 30 days on receipt of the feasibility study report, contract and articles of association.
4. Application for company identification code
On the strength of the approval certificate of contract and articles of association, the investor shall apply for the company’s identification code with the city’s corporate identification code office.
5. Application for the issuance of the approval certificate
After the feasibility study report, contract and articles of association have been approved, the Chinese part shall apply for the approval certificate from the examination and approval authority.FICS, and its entrusted Administration Commission of Pudong New Area, Administrative Committee of Waigaoqiao Free Trade Zone, people’s governments at district or county level shall issue the approval certificate within 3 days after the receipt of application.
6. Application for business license
The Chinese and foreign parties may register with Shanghai Administrative Bureau for Industry and Commerce with 30 days after receiving the approval certificate and apply for the business license. Shanghai Administrative Bureau for Industry and Commerce shall issue the business license with 10 days to those projects approved by the examination and approval authorities of Shanghai.The enterprise is deemed as established on the date when the business license is issued.
(B) Procedures of Establishing a Wholly Foreign Owned Enterprise
For establishing a wholly foreign owned enterprise, the foreign investor is required to entrust the authorized consultative bodies or agencies with the tasks of application and documents submission for approval.The procedures for establishing an equity joint venture or a contractual joint venture can be consulted as a reference.
1. A manufacturing project with its total investment of over USD 30 million, and other project with needs t be approved by the competent department of the State Council, shall be preliminarily examined by FICS and all related departments of the Shanghai Municipality and then submitted by FICS to the relevant department of the State Council for approval.
2. If a project with its total investment under USD 30 million is located in Pudong New Area, it shall be examined and approved by Shanghai Pudong New Area Administration Commission; If it is located in Shanghai Waigaoqiao Free Trade Zone, it shall be examined and approved by the Administrative Committee of Shanghai Waigaoqiao Free Trade Zone. For certain restricted projects, their projects proposals shall be pre-examined by FICS and related government departments and then submitted by FICS to the relevant department of the State Council for approval. An encouraged project shall be examined and approved by the people’s government at district, county level where the said project is located.
3. An encouraged or permitted project with its total investment under USD 10 million shall be examined and approved by the examination and approval authorities at district, county or bureau level where the said project is located.
4. Other projects except the said No. 1, 2, 3, shall be examined and approved by the FICS.
(A) Procedures for Establishing an Equity Joint Venture or a Contractual Joint Venture
1. Preparing and presenting project proposal
Chinese or foreign investors may choose their partners through various ways. After they are well acquainted with their counterpart’s business scope and credibility, and have reached agreement of cooperation, the Chinese party shall work out a project proposal and present it to the examination and approval authority. The examination and approval authority shall give a reply (approval or disapproval) within 20 days on receipt of the proposal.
The Chinese party shall apply to Shanghai Administrative Bureau for Industry and Commerce for the enterprise’s name registration after a positive reply.
2. Preparing and submitting feasibility study report
After the project is approved, the Chinese and foreign partners shall jointly prepare a feasibility study covering items such as market survey, financing, technological process, equipment, raw material (parts), site selecting, environment protection, labor protection, fire protection, infrastructure facilities, marketing, economic results, foreign exchange balance, etc. The examination and approval authority shall help to coordinate if there are any problems.
3. Submitting contract and articles of association
While the Chinese and foreign partners are preparing the feasibility study report, they may also draw up the contract and articles of association and submit them jointly to the examination and approval authority. The examination and approval authority shall give a reply (approval or disapproval) with 30 days on receipt of the feasibility study report, contract and articles of association.
4. Application for company identification code
On the strength of the approval certificate of contract and articles of association, the investor shall apply for the company’s identification code with the city’s corporate identification code office.
5. Application for the issuance of the approval certificate
After the feasibility study report, contract and articles of association have been approved, the Chinese part shall apply for the approval certificate from the examination and approval authority.FICS, and its entrusted Administration Commission of Pudong New Area, Administrative Committee of Waigaoqiao Free Trade Zone, people’s governments at district or county level shall issue the approval certificate within 3 days after the receipt of application.
6. Application for business license
The Chinese and foreign parties may register with Shanghai Administrative Bureau for Industry and Commerce with 30 days after receiving the approval certificate and apply for the business license. Shanghai Administrative Bureau for Industry and Commerce shall issue the business license with 10 days to those projects approved by the examination and approval authorities of Shanghai.The enterprise is deemed as established on the date when the business license is issued.
(B) Procedures of Establishing a Wholly Foreign Owned Enterprise
For establishing a wholly foreign owned enterprise, the foreign investor is required to entrust the authorized consultative bodies or agencies with the tasks of application and documents submission for approval.The procedures for establishing an equity joint venture or a contractual joint venture can be consulted as a reference.
Tuesday, May 29, 2007
China's Franchise Industry Development
The year 2006 witnessed huge venture capitals in China franchise industry. In July of 2006, the typical catering franchise enterprise Inner Mongolia Little Sheep Catering Chain Co., Ltd attracted tens of millions US dollars, which gained widespread attention then. In addition, dianping.com and fg114.com also obtained a great amount of venture capitals. The investments into franchise industry have been increasing rapidly in recent years.
On Nov 11th, 2006, texuonlin.com together with Center Plaza launched China franchise city to the world. The widely focused Regulations on the Management of Commercial Franchise were officially issued in February, 2007 and will take effect on May 1 2007. Gradually, China franchise market will go to right track as it accelerates its step moving forward.According to the statistics, there had been about 16,000 franchise systems in operation around the world as of 2006, and the number of franchisees exceeded 1.6 million. As is shown from the report of WFC (the World Franchise Council), there are at least 100 well-known franchise enterprises in 29 countries and regions all over the world. As is estimated by WFC, the annual sales of the global franchise industry has been over USD 1 trillion, and created more than 20 million job opportunities.
Chinese market has been increasingly attractive to international franchise business, and more and more Chinese enterprises are seeking opportunities to invest into franchise projects that can bring handsome economic returns. At present, China's franchise has covered the most of sectors of the global franchise system except for human resource services, taxation, insurance, accounting, and advertising, etc. The number of Unit franchisees will keeps growing up to 12%-14%. After about two decades' development, China franchise has been involved with over 60 industries, 2,600 franchisees and 168,000 franchise chains. On average, single franchise system has 73 franchise chains. The whole market is growing amazingly at a year-on-year rate of 40-50%.
Despite the rapid development of franchise in China, there are still some problems to be solved. The five major problems faced by franchise headquarters (by concern rate) at present include strategic development orientation, the standardization of administrative system, the regulations for franchisees, the unified standards for product services and, political and legal environments. China's domestic consumption in the future will be more quality-oriented, diversified and individualized. Hotspot is turning to such emerging consumption fields as education, healthcare & hairdressing, automobile and household services, which, together with changing consumption structure, brings huge development potential for franchise.
Moreover, the 2008 Olympic Games can also create huge opportunities for franchise industry. It is estimated the market scale of franchised Olympic Games products will reach about RMB 25-28 billion.
On Nov 11th, 2006, texuonlin.com together with Center Plaza launched China franchise city to the world. The widely focused Regulations on the Management of Commercial Franchise were officially issued in February, 2007 and will take effect on May 1 2007. Gradually, China franchise market will go to right track as it accelerates its step moving forward.According to the statistics, there had been about 16,000 franchise systems in operation around the world as of 2006, and the number of franchisees exceeded 1.6 million. As is shown from the report of WFC (the World Franchise Council), there are at least 100 well-known franchise enterprises in 29 countries and regions all over the world. As is estimated by WFC, the annual sales of the global franchise industry has been over USD 1 trillion, and created more than 20 million job opportunities.
Chinese market has been increasingly attractive to international franchise business, and more and more Chinese enterprises are seeking opportunities to invest into franchise projects that can bring handsome economic returns. At present, China's franchise has covered the most of sectors of the global franchise system except for human resource services, taxation, insurance, accounting, and advertising, etc. The number of Unit franchisees will keeps growing up to 12%-14%. After about two decades' development, China franchise has been involved with over 60 industries, 2,600 franchisees and 168,000 franchise chains. On average, single franchise system has 73 franchise chains. The whole market is growing amazingly at a year-on-year rate of 40-50%.
Despite the rapid development of franchise in China, there are still some problems to be solved. The five major problems faced by franchise headquarters (by concern rate) at present include strategic development orientation, the standardization of administrative system, the regulations for franchisees, the unified standards for product services and, political and legal environments. China's domestic consumption in the future will be more quality-oriented, diversified and individualized. Hotspot is turning to such emerging consumption fields as education, healthcare & hairdressing, automobile and household services, which, together with changing consumption structure, brings huge development potential for franchise.
Moreover, the 2008 Olympic Games can also create huge opportunities for franchise industry. It is estimated the market scale of franchised Olympic Games products will reach about RMB 25-28 billion.
Monday, May 28, 2007
解读商务部新颁布实施《商业特许经营管理条例》
从2007年5月1日起，国务院就有关商业特许经营的《商业特许经营管理条例》（以下称《条例》）开始生效实施，该条例与之前2004年商务部所颁布的《商业特许经营管理办法》共同构成我国有关商业特许经营方面的法律体系，其中不乏对《商业特许经营管理办法》进行了必要的修改和更新。
一、 重新界定商业特许经营内涵。
根据《条例》，商业特许经营是指通过签订合同，特许人降有权授予他人使用的商标、商号、经营模式等经营资源，授予被特许人使用；被特许人按照合同约定在统一经营体系下从事经营活动，并向特许人支付特许经营费。
据此，特许经营具有如下四个基本要素：
1、特许人必须是拥有注册商标、企业标志、专利、专有技术等经营资源的企业。特许人如不具备上述条件，特许经营也就无从谈起；
2、特许人和被特许人之间是一种合同关系，特许人和被特许人是互相独立的市场主体，双方通过订立特许经营合同，确定各自的权利和义务。因此，特许经营本质上是一种民事行为；
3、被特许人应当在统一的经营模式下开展经营。特许经营是一种高度系统化、组织化的营销方式，统一的经营模式是其核心要求之一，也是保证服务的规范性、一致性以及维护品牌形象的需要。这种统一的经营模式体现在各个方面，大到管理、促销、质量控制等，小到店铺的装潢设计甚至标牌的设置等；
4、被特许人应当向特许人支付相应的费用。特许人拥有的经营资源一般都经过了较长时间的开发、积累，具有较高的商业价值。被特许人经许可使用这些经营资源也是为了开展经营活动，因此需要支付相应的费用。支付费用的种类、数额以及支付方式，由双方在合同中约定。
二、特许人和被特许人主体资格限制。
根据《条例》规定，“企业以外的其他单位和个人不得作为特许人从事特许经营活动。”也即是说，非企业法人（包括机关法人、社会团体法人和事业单位法人）和个人不得作为特许人。
《条例》对于被特许人资格没有作出限制，这与之前的《商业特许经营管理办法》形成鲜明对比，后者曾经规定“被许可人必须是依法设立的企业或其他经济组织”，这样个人作为被特许人不再存在法律障碍。
三、“一年两店”。
《条例》不仅对特许人的主体资格作出限定，还要求特许人从事特许经营应当拥有至少2个直营店，并且经营时间超过1年。
四、建立特许人信息披露制度。
根据《条例》，特许人的信息披露主要包括如下几个方面：
1、特许人应当在订立特许经营合同之日前至少30日，以书面形式向被特许人提供下列信息，并提供特许经营合同文本：
a) 特许人的名称、住所、法定代表人、注册资本额、经营范围以及从事特许经营活动的基本情况；
b) 特许人的注册商标、企业标志、专利、专有技术和经营模式的基本情况；
c) 特许经营费用的种类、金额和支付方式（包括是否收取保证金以及保证金的返还条件和返还方式）；
d) 向被特许人提供产品、服务、设备的价格和条件；
e) 为被特许人持续提供经营指导、技术支持、业务培训等服务的具体内容、提供方式和实施计划；
f) 对被特许人的经营活动进行指导、监督的具体办法；
g) 特许经营网点投资预算；
h) 在中国境内现有的被特许人的数量、分布地域以及经营状况评估；
i) 最近2年的经会计师事务所审计的财务会计报告摘要和审计报告摘要；
j) 最近5年内与特许经营相关的诉讼和仲裁情况；
k) 特许人及其法定代表人是否有重大违法经营记录；
l) 国务院商务主管部门规定的其他信息。
2、特许人向被特许人收取的推广、宣传费用，应当按照合同约定的用途使用。推广、宣传费用的使用情况应当及时向被特许人披露。
同时，就特许人的信息披露义务，《条例》还特别指出上述信息应当真实、准确、完整，不得隐瞒有关信息，或者提供虚假信息，如所提供的信息发生重大变更，应当及时通知被特许人，特许人如隐瞒有关信息或提供虚假信息的，被特许人可以解除特许经营合同。
五、确立了特许人备案制度。
为了便于商务主管部门及时了解、掌握特许人的数量等有关情况，对特许经营活动进行规范、监督，同时也为了有助于潜在投资者了解特许人的基本情况，作出适当的投资决策，《条例》确立了特许人备案制度，规定特许人应当自首次订立特许经营合同之日起15日内，应当向商务主管部门备案，并提交下列文件和资料：
1、营业执照复印件；
2、特许经营合同样本；
3、特许经营操作手册；
4、市场计划书；
5、表明其符合有关“一年两店”和具有成熟经验模式和具有为被特许人持续提供经验指导、技术支持和业务培训能力的书面承诺及相关证明材料；
商务主管部门收到特许人提交的符合规定的文件、资料后，应当予以备案，通知特许人，并将备案的特许人名单在政府网站上公布和及时更新。
六、法律责任
《条例》对违反有关规定的特许人规定了比较严厉的处罚性措施，主要包括如下：
1、不符合“一年两店”规定的特许人从事特许经营活动的，最高罚款50万元；
2、企业以外的单位或个人作为特许人从事特许经营活动的，最高罚款50万元；
3、特许人未按照要求向商务主管部门进行备案，最高罚款10万元；
4、未按规定向被特许人说明费用使用情况，最高罚款5万元；
5、未向商务主管部门报告上一年特许经营合同订立情况，最高罚款5万元；
6、特许人虚假推广活动，最高罚款30万元，构成犯罪的，依法追究刑事责任；
7、特许人信息披露失实，最高罚款10万元。
七、对《条例》实施前已从事特许经营活动的特许人的特殊处理。
根据《条例》，对于在《条例》施行前已从事特许经营活动的特许人，应当在《条例》施行之日起1年内，依照《条例》规定向商务主管部门备案，逾期不备案的，将处以5万元以上10万元以下的罚款，并予以公告。
同时，对于《条例》实施前的特许人，不适用有关“一年两店”的规定。
一、 重新界定商业特许经营内涵。
根据《条例》，商业特许经营是指通过签订合同，特许人降有权授予他人使用的商标、商号、经营模式等经营资源，授予被特许人使用；被特许人按照合同约定在统一经营体系下从事经营活动，并向特许人支付特许经营费。
据此，特许经营具有如下四个基本要素：
1、特许人必须是拥有注册商标、企业标志、专利、专有技术等经营资源的企业。特许人如不具备上述条件，特许经营也就无从谈起；
2、特许人和被特许人之间是一种合同关系，特许人和被特许人是互相独立的市场主体，双方通过订立特许经营合同，确定各自的权利和义务。因此，特许经营本质上是一种民事行为；
3、被特许人应当在统一的经营模式下开展经营。特许经营是一种高度系统化、组织化的营销方式，统一的经营模式是其核心要求之一，也是保证服务的规范性、一致性以及维护品牌形象的需要。这种统一的经营模式体现在各个方面，大到管理、促销、质量控制等，小到店铺的装潢设计甚至标牌的设置等；
4、被特许人应当向特许人支付相应的费用。特许人拥有的经营资源一般都经过了较长时间的开发、积累，具有较高的商业价值。被特许人经许可使用这些经营资源也是为了开展经营活动，因此需要支付相应的费用。支付费用的种类、数额以及支付方式，由双方在合同中约定。
二、特许人和被特许人主体资格限制。
根据《条例》规定，“企业以外的其他单位和个人不得作为特许人从事特许经营活动。”也即是说，非企业法人（包括机关法人、社会团体法人和事业单位法人）和个人不得作为特许人。
《条例》对于被特许人资格没有作出限制，这与之前的《商业特许经营管理办法》形成鲜明对比，后者曾经规定“被许可人必须是依法设立的企业或其他经济组织”，这样个人作为被特许人不再存在法律障碍。
三、“一年两店”。
《条例》不仅对特许人的主体资格作出限定，还要求特许人从事特许经营应当拥有至少2个直营店，并且经营时间超过1年。
四、建立特许人信息披露制度。
根据《条例》，特许人的信息披露主要包括如下几个方面：
1、特许人应当在订立特许经营合同之日前至少30日，以书面形式向被特许人提供下列信息，并提供特许经营合同文本：
a) 特许人的名称、住所、法定代表人、注册资本额、经营范围以及从事特许经营活动的基本情况；
b) 特许人的注册商标、企业标志、专利、专有技术和经营模式的基本情况；
c) 特许经营费用的种类、金额和支付方式（包括是否收取保证金以及保证金的返还条件和返还方式）；
d) 向被特许人提供产品、服务、设备的价格和条件；
e) 为被特许人持续提供经营指导、技术支持、业务培训等服务的具体内容、提供方式和实施计划；
f) 对被特许人的经营活动进行指导、监督的具体办法；
g) 特许经营网点投资预算；
h) 在中国境内现有的被特许人的数量、分布地域以及经营状况评估；
i) 最近2年的经会计师事务所审计的财务会计报告摘要和审计报告摘要；
j) 最近5年内与特许经营相关的诉讼和仲裁情况；
k) 特许人及其法定代表人是否有重大违法经营记录；
l) 国务院商务主管部门规定的其他信息。
2、特许人向被特许人收取的推广、宣传费用，应当按照合同约定的用途使用。推广、宣传费用的使用情况应当及时向被特许人披露。
同时，就特许人的信息披露义务，《条例》还特别指出上述信息应当真实、准确、完整，不得隐瞒有关信息，或者提供虚假信息，如所提供的信息发生重大变更，应当及时通知被特许人，特许人如隐瞒有关信息或提供虚假信息的，被特许人可以解除特许经营合同。
五、确立了特许人备案制度。
为了便于商务主管部门及时了解、掌握特许人的数量等有关情况，对特许经营活动进行规范、监督，同时也为了有助于潜在投资者了解特许人的基本情况，作出适当的投资决策，《条例》确立了特许人备案制度，规定特许人应当自首次订立特许经营合同之日起15日内，应当向商务主管部门备案，并提交下列文件和资料：
1、营业执照复印件；
2、特许经营合同样本；
3、特许经营操作手册；
4、市场计划书；
5、表明其符合有关“一年两店”和具有成熟经验模式和具有为被特许人持续提供经验指导、技术支持和业务培训能力的书面承诺及相关证明材料；
商务主管部门收到特许人提交的符合规定的文件、资料后，应当予以备案，通知特许人，并将备案的特许人名单在政府网站上公布和及时更新。
六、法律责任
《条例》对违反有关规定的特许人规定了比较严厉的处罚性措施，主要包括如下：
1、不符合“一年两店”规定的特许人从事特许经营活动的，最高罚款50万元；
2、企业以外的单位或个人作为特许人从事特许经营活动的，最高罚款50万元；
3、特许人未按照要求向商务主管部门进行备案，最高罚款10万元；
4、未按规定向被特许人说明费用使用情况，最高罚款5万元；
5、未向商务主管部门报告上一年特许经营合同订立情况，最高罚款5万元；
6、特许人虚假推广活动，最高罚款30万元，构成犯罪的，依法追究刑事责任；
7、特许人信息披露失实，最高罚款10万元。
七、对《条例》实施前已从事特许经营活动的特许人的特殊处理。
根据《条例》，对于在《条例》施行前已从事特许经营活动的特许人，应当在《条例》施行之日起1年内，依照《条例》规定向商务主管部门备案，逾期不备案的，将处以5万元以上10万元以下的罚款，并予以公告。
同时，对于《条例》实施前的特许人，不适用有关“一年两店”的规定。
Monday, May 21, 2007
期货投资者保障基金管理暂行办法
中国证券监督管理委员会令第38号
《期货投资者保障基金管理暂行办法》已经中国证券监督管理委员会和财政部审议通过，现予公布，自2007年8月1日起施行。
中国证券监督管理委员会主席：尚福林中华人民共和国财政部部长： 金人庆
二○○七年四月十九日期货投资者保障基金管理暂行办法
第一章 总 则
第一条 为保护期货投资者的合法权益，根据《期货交易管理条例》，制定本办法。
第二条 期货投资者保障基金（以下简称保障基金）是在期货公司严重违法违规或者风险控制不力等导致保证金出现缺口，可能严重危及社会稳定和期货市场安全时，补偿投资者保证金损失的专项基金。
第三条 期货交易活动实行公开、公平、公正和投资者投资决策自主、投资风险自担的原则。投资者在期货投资活动中因期货市场波动或者投资品种价值本身发生变化所导致的损失，由投资者自行负担。
第四条 保障基金按照取之于市场、用之于市场的原则筹集。
第五条 保障基金由中国证监会集中管理、统筹使用。
第六条 保障基金的管理和运用遵循公开、合理、有效的原则。
第七条 保障基金的使用遵循保障投资者合法权益和公平救助原则，实行比例补偿。
第二章 保障基金的筹集
第八条 保障基金管理机构应当以保障基金名义设立资金专用账户，专户存储保障基金。
第九条 保障基金的启动资金由期货交易所从其积累的风险准备金中按照截至2006年12月31日风险准备金账户总额的百分之十五缴纳形成。保障基金的后续资金来源包括：（一）期货交易所按其向期货公司会员收取的交易手续费的百分之三缴纳；（二）期货公司从其收取的交易手续费中按照代理交易额的千万分之五至十的比例缴纳；（三）保障基金管理机构追偿或者接受的其他合法财产。对于因财务状况恶化、风险控制不力等存在较高风险的期货公司，应当按照较高比例缴纳保障基金，各期货公司的具体缴纳比例由中国证监会根据期货公司风险状况确定。期货交易所、期货公司缴纳的保障基金在其营业成本中列支。
第十条 期货交易所应当在本办法实施之日起1个月内，将应当缴纳的启动资金划入保障基金专户。期货交易所、期货公司应当按季度缴纳后续资金。期货交易所应当在每季度结束后15个工作日内，缴纳前一季度应当缴纳的保障基金，并按照本办法第九条确定的比例代扣代缴期货公司应当缴纳的保障基金。
第十一条 有下列情形之一的，经中国证监会、财政部批准，期货交易所、期货公司可以暂停缴纳保障基金：（一）保障基金总额达到8亿元人民币；（二）期货交易所、期货公司遭受重大突发市场风险或者不可抗力。保障基金的规模、缴纳比例和缴纳方式，由中国证监会根据期货市场发展状况、市场风险水平等情况调整确定。
第十二条 鼓励保障基金来源多元化，保障基金可以接受社会捐赠和其他合法财产。保障基金产生的利息以及运用所产生的各种收益等孳息归属保障基金。
第三章 保障基金的管理和监管
第十三条 中国证监会、财政部可以指定相关机构作为保障基金管理机构，代为管理保障基金。
第十四条 对保障基金的管理应当遵循安全、稳健的原则，保证保障基金的安全。保障基金的资金运用限于银行存款、购买国债、中央银行债券（包括中央银行票据）和中央级金融机构发行的金融债券，以及中国证监会和财政部批准的其他资金运用方式。
第十五条 保障基金应当实行独立核算，分别管理，并与保障基金管理机构管理的其他资产有效隔离。保障基金管理机构应当定期编报保障基金的筹集、管理、使用报告，经会计师事务所审计后，报送中国证监会和财政部。
第十六条 保障基金管理机构、期货交易所及期货公司，应当妥善保存有关保障基金的财务凭证、账簿和报表等资料，确保财务记录和档案完整、真实。
第十七条 财政部负责保障基金财务监管。保障基金的年度收支计划和决算报财政部批准。
第十八条 中国证监会负责保障基金业务监管，对保障基金的筹集、管理和使用等情况进行定期核查。中国证监会定期向保障基金管理机构通报期货公司总体风险状况。存在较高风险的期货公司应当每月向保障基金管理机构提供财务监管报表。
第四章 保障基金的使用
第十九条 期货公司因严重违法违规或者风险控制不力等导致保证金出现缺口的，中国证监会可以按照本办法规定决定使用保障基金，对不能清偿的投资者保证金损失予以补偿。
第二十条 对期货投资者的保证金损失，保障基金按照下列原则予以补偿：（一）对每位个人投资者的保证金损失在10万元以下（含10万元）的部分全额补偿，超过10万元的部分按百分之九十补偿； （二）对每位机构投资者的保证金损失在10万元以下（含10万元）的部分全额补偿，超过10万元的部分按百分之八十补偿。现有保障基金不足补偿的，由后续缴纳的保障基金补偿。
第二十一条 使用保障基金前，中国证监会和保障基金管理机构应当监督期货公司核实投资者保证金权益及损失，积极清理资产并变现处置，应当先以自有资金和变现资产弥补保证金缺口。不足弥补或者情况危急的，方能决定使用保障基金。
第二十二条 对投资者因参与非法期货交易而遭受的保证金损失，保障基金不予补偿。 对机构投资者以个人名义参与期货交易的，按照机构投资者补偿规则进行补偿。
第二十三条 动用保障基金对期货投资者的保证金损失进行补偿后，保障基金管理机构依法取得相应的受偿权，可以依法参与期货公司清算。
第二十四条 保障基金管理机构应当及时将保障基金的使用、补偿、追偿等情况报告中国证监会和财政部。
第五章 罚 则
第二十五条 期货公司因严重违法违规或者风险控制不力等导致保证金出现缺口的，中国证监会根据《期货交易管理条例》第七十条、第七十一条进行处罚，吊销期货业务许可证。涉嫌犯罪的，依法移送司法机关。
第二十六条 期货交易所、期货公司违反本办法规定，延期缴纳或者拒不缴纳保障基金以及不按规定保存、报送有关信息和资料的，中国证监会根据《期货交易管理条例》第六十八条、第七十条进行处罚。
第二十七条 对挪用、侵占、骗取保障基金的违法行为，依法查处；对有关失职人员，依法追究法律责任；涉嫌犯罪的，依法移送司法机关。第六章 附 则第二十八条 本办法自2007年8月1日起施行。
《期货投资者保障基金管理暂行办法》已经中国证券监督管理委员会和财政部审议通过，现予公布，自2007年8月1日起施行。
中国证券监督管理委员会主席：尚福林中华人民共和国财政部部长： 金人庆
二○○七年四月十九日期货投资者保障基金管理暂行办法
第一章 总 则
第一条 为保护期货投资者的合法权益，根据《期货交易管理条例》，制定本办法。
第二条 期货投资者保障基金（以下简称保障基金）是在期货公司严重违法违规或者风险控制不力等导致保证金出现缺口，可能严重危及社会稳定和期货市场安全时，补偿投资者保证金损失的专项基金。
第三条 期货交易活动实行公开、公平、公正和投资者投资决策自主、投资风险自担的原则。投资者在期货投资活动中因期货市场波动或者投资品种价值本身发生变化所导致的损失，由投资者自行负担。
第四条 保障基金按照取之于市场、用之于市场的原则筹集。
第五条 保障基金由中国证监会集中管理、统筹使用。
第六条 保障基金的管理和运用遵循公开、合理、有效的原则。
第七条 保障基金的使用遵循保障投资者合法权益和公平救助原则，实行比例补偿。
第二章 保障基金的筹集
第八条 保障基金管理机构应当以保障基金名义设立资金专用账户，专户存储保障基金。
第九条 保障基金的启动资金由期货交易所从其积累的风险准备金中按照截至2006年12月31日风险准备金账户总额的百分之十五缴纳形成。保障基金的后续资金来源包括：（一）期货交易所按其向期货公司会员收取的交易手续费的百分之三缴纳；（二）期货公司从其收取的交易手续费中按照代理交易额的千万分之五至十的比例缴纳；（三）保障基金管理机构追偿或者接受的其他合法财产。对于因财务状况恶化、风险控制不力等存在较高风险的期货公司，应当按照较高比例缴纳保障基金，各期货公司的具体缴纳比例由中国证监会根据期货公司风险状况确定。期货交易所、期货公司缴纳的保障基金在其营业成本中列支。
第十条 期货交易所应当在本办法实施之日起1个月内，将应当缴纳的启动资金划入保障基金专户。期货交易所、期货公司应当按季度缴纳后续资金。期货交易所应当在每季度结束后15个工作日内，缴纳前一季度应当缴纳的保障基金，并按照本办法第九条确定的比例代扣代缴期货公司应当缴纳的保障基金。
第十一条 有下列情形之一的，经中国证监会、财政部批准，期货交易所、期货公司可以暂停缴纳保障基金：（一）保障基金总额达到8亿元人民币；（二）期货交易所、期货公司遭受重大突发市场风险或者不可抗力。保障基金的规模、缴纳比例和缴纳方式，由中国证监会根据期货市场发展状况、市场风险水平等情况调整确定。
第十二条 鼓励保障基金来源多元化，保障基金可以接受社会捐赠和其他合法财产。保障基金产生的利息以及运用所产生的各种收益等孳息归属保障基金。
第三章 保障基金的管理和监管
第十三条 中国证监会、财政部可以指定相关机构作为保障基金管理机构，代为管理保障基金。
第十四条 对保障基金的管理应当遵循安全、稳健的原则，保证保障基金的安全。保障基金的资金运用限于银行存款、购买国债、中央银行债券（包括中央银行票据）和中央级金融机构发行的金融债券，以及中国证监会和财政部批准的其他资金运用方式。
第十五条 保障基金应当实行独立核算，分别管理，并与保障基金管理机构管理的其他资产有效隔离。保障基金管理机构应当定期编报保障基金的筹集、管理、使用报告，经会计师事务所审计后，报送中国证监会和财政部。
第十六条 保障基金管理机构、期货交易所及期货公司，应当妥善保存有关保障基金的财务凭证、账簿和报表等资料，确保财务记录和档案完整、真实。
第十七条 财政部负责保障基金财务监管。保障基金的年度收支计划和决算报财政部批准。
第十八条 中国证监会负责保障基金业务监管，对保障基金的筹集、管理和使用等情况进行定期核查。中国证监会定期向保障基金管理机构通报期货公司总体风险状况。存在较高风险的期货公司应当每月向保障基金管理机构提供财务监管报表。
第四章 保障基金的使用
第十九条 期货公司因严重违法违规或者风险控制不力等导致保证金出现缺口的，中国证监会可以按照本办法规定决定使用保障基金，对不能清偿的投资者保证金损失予以补偿。
第二十条 对期货投资者的保证金损失，保障基金按照下列原则予以补偿：（一）对每位个人投资者的保证金损失在10万元以下（含10万元）的部分全额补偿，超过10万元的部分按百分之九十补偿； （二）对每位机构投资者的保证金损失在10万元以下（含10万元）的部分全额补偿，超过10万元的部分按百分之八十补偿。现有保障基金不足补偿的，由后续缴纳的保障基金补偿。
第二十一条 使用保障基金前，中国证监会和保障基金管理机构应当监督期货公司核实投资者保证金权益及损失，积极清理资产并变现处置，应当先以自有资金和变现资产弥补保证金缺口。不足弥补或者情况危急的，方能决定使用保障基金。
第二十二条 对投资者因参与非法期货交易而遭受的保证金损失，保障基金不予补偿。 对机构投资者以个人名义参与期货交易的，按照机构投资者补偿规则进行补偿。
第二十三条 动用保障基金对期货投资者的保证金损失进行补偿后，保障基金管理机构依法取得相应的受偿权，可以依法参与期货公司清算。
第二十四条 保障基金管理机构应当及时将保障基金的使用、补偿、追偿等情况报告中国证监会和财政部。
第五章 罚 则
第二十五条 期货公司因严重违法违规或者风险控制不力等导致保证金出现缺口的，中国证监会根据《期货交易管理条例》第七十条、第七十一条进行处罚，吊销期货业务许可证。涉嫌犯罪的，依法移送司法机关。
第二十六条 期货交易所、期货公司违反本办法规定，延期缴纳或者拒不缴纳保障基金以及不按规定保存、报送有关信息和资料的，中国证监会根据《期货交易管理条例》第六十八条、第七十条进行处罚。
第二十七条 对挪用、侵占、骗取保障基金的违法行为，依法查处；对有关失职人员，依法追究法律责任；涉嫌犯罪的，依法移送司法机关。第六章 附 则第二十八条 本办法自2007年8月1日起施行。
境外证券交易所驻华代表机构管理办法
中国证券监督管理委员会令第44号
《境外证券交易所驻华代表机构管理办法》已经2007年4月3日中国证券监督管理委员会第203次主席办公会议审议通过，现予公布，自2007年7月1日起施行。
中国证券监督管理委员会主席： 尚福林 二○○七年五月二十日
境外证券交易所驻华代表机构管理办法
第一章 总 则
第一条 为了规范境外证券交易所驻华代表机构的设立及其业务活动，根据《中华人民共和国证券法》及有关法规，制定本办法。
第二条 本办法所称境外证券交易所，是指在境外设立的股票交易所、证券自动报价或电子交易系统或市场。本办法所称境外证券交易所驻华代表机构（以下简称代表处），是指境外证券交易所在中国境内获准设立并专门从事联络、推介和调研等非经营性活动的常驻代表机构。代表处主要负责人称首席代表。
第三条 代表处应当遵守中国法律、法规和中国证券监督管理委员会（以下简称中国证监会）的有关规定。代表处的合法权益受中国法律保护。
第四条 中国证监会根据审慎监管的原则，依法对代表处进行审批和监管。
第二章 申请与设立第五条 申请设立代表处的境外证券交易所（以下简称申请人），应当具备下列条件：（一）申请人所在国家或地区具有完善的金融监管法律、法规；（二）申请人所在国家或地区的金融监管当局与中国证监会签订了监管合作谅解备忘录，并保持着良好的合作关系；（三）申请人由其所在国家或地区金融监管当局批准设立或认可； （四）申请人设立二十年以上，运作稳健规范，财务状况良好；（五）中国证监会提出的其他审慎性条件。
第六条 申请人只能申请设立一个代表处，申请时应当向中国证监会提交下列材料：（一）由董事长（理事长）或总经理签署的致中国证监会的申请书；（二）所在国家或地区金融监管当局出具的同意申请人设立代表处的意见书或其他有关文件；（三）所在国家或地区有关主管当局核发的、经所在国家或地区有权进行公证、认证的机构公证、认证并经中国驻该国使（领）馆认证的营业执照或合法开业证明的复印件；（四）交易所章程和主要业务规则；（五）董事会（理事会）成员名单、管理层人员名单；（六）最近三年的年报；（七）代表处设立方案，包括但不限于设立的目的、必要性、工作规划、内部机构设置与人员配备、管理制度及办公场所选址等内容； （八）由董事长（理事长）或总经理签署的首席代表授权书；（九）申请人就拟任首席代表没有因重大违法违规行为受到处罚的声明，且该声明经过申请人所在国家或地区公证机构的公证；（十）拟任首席代表的身份证明、学历证明和简历；（十一）中国证监会要求提交的其他文件。
第七条 中国证监会受理审核申请人提交的设立申请材料。决定批准的，颁发批准书。
第八条 代表处应当自中国证监会批准之日起九十日内，凭批准书依法办理工商登记手续、税务登记手续，迁入固定的办公场所，并向中国证监会书面报告下列事项：
（一）工商登记证明、税务登记证明；
（二）办公场所的合法使用权证明；
（三）办公场所电话、传真、邮政通讯地址；
（四）首席代表移动电话、电子邮箱。
代表处未在上述规定时间内向中国证监会提交书面报告的，原批准书自动失效。
第九条 代表处的名称应当按下列顺序组成：“境外证券交易所所在国家或地区名称”、“境外证券交易所名称”、“代表处所在城市名称”和“代表处”。
第十条 代表处除首席代表外，其他主要工作人员应当称“代表”、“副代表”。
第十一条 代表处首席代表的任职资格由中国证监会审批。首席代表应当具备下列条件：（一） 熟悉中国金融法律、法规； （二） 具有大学本科以上学历，从事金融或经济工作十年以上，在最近五年内至少有三年以上从事中国业务的经历；（三） 品行良好，没有受过刑事、行政处罚等不良记录。
第十二条 代表处聘用代表、副代表，自聘用之日起五个工作日内，应当将上述人员的名单、身份证明和简历报中国证监会备案。
第三章 变更与撤销
第十三条 代表处变更名称，应当向中国证监会提出申请，并提交其交易所董事长（理事长）或总经理签署的申请书及中国证监会要求的其他文件。
第十四条 代表处变更首席代表，应当向中国证监会提出申请，并提交其交易所董事长（理事长）或总经理签署的申请书及本办法第六条（八）至（十一）项规定的材料。
第十五条 中国证监会受理审核申请人提交的变更名称、变更首席代表的申请材料。决定批准的，换发批准书。
第十六条 代表处变更或增减代表、副代表，应当自变更之日起五个工作日内，将上述人员的名单、身份证明和简历报中国证监会备案。
第十七条 代表处只能在所在城市变更办公场所。自变更之日起五个工作日内，代表处应当向中国证监会书面报告下列事项：
（一）新办公场所合法使用权证明；
（二）新办公场所电话、传真、邮政通讯地址。本条所称变更办公场所指原有办公场所的搬迁、扩大或缩小。
第十八条 代表处撤销，应当提前二十个工作日向中国证监会报告，并凭中国证监会出具的同意撤销的有关确认文件向工商登记机关办理注销登记。代表处注销后，应当在五个工作日内向中国证监会提交有关注销证明文件。
第十九条 代表处撤销后，未了事宜由其交易所承担责任。
第四章 监督管理
第二十条 代表处应当有独立、固定的办公场所，配备合理数量的工作人员，其中境内居民所占比例不低于50%。代表处的外籍工作人员入境后应当按照有关法律规定办理居留手续。
第二十一条 首席代表不得由其总部或地区总部人员兼任，也不得在中国境内任何经营性机构中任职。首席代表应当常驻代表处主持日常工作。离境时间连续超过三十日的，应当向中国证监会报告，并指定专人代行其职。首席代表在其他机构兼职，或未报告擅自离境超过三十日的，中国证监会可以要求其交易所更换首席代表。
第二十二条 代表处及其工作人员，不得从事或变相从事任何经营性活动，不得与任何法人或自然人签订可能给代表处或其交易所带来收入的协议或合同。
第二十三条 代表处及其工作人员，不得以任何形式进行广告宣传，不得以任何形式面向个人开展推介活动。
第二十四条 代表处及其工作人员组织举办面向企业的大型推介活动时，应当事先将活动方案报送中国证监会。中国证监会十个工作日内未提出异议的，方可进行。
第二十五条 代表处及其工作人员，不得以任何形式进行虚假推介，不得以任何形式进行不正当竞争，不得以任何形式为其他机构谋取利益。
第二十六条 代表处应当于每一年度结束之日起二个月内，向中国证监会报送上年度工作报告。
第二十七条 代表处应当于每一年度结束之日起二个月内，向中国证监会报送上年度在其交易所上市交易的中国公司的情况及其中资会员的情况。
第二十八条 代表处应当在其交易所会计年度结束之日起四个月内，向中国证监会报送其交易所上一年度的年报。
第二十九条 境外证券交易所对在其上市交易的中国公司及其中资会员进行重大处罚时，代表处应当及时通报中国证监会，并自处罚之日起十个工作日内，向中国证监会提交书面报告。
第三十条 境外证券交易所有下列情形之一的，代表处应当自事件发生之日起十个工作日内，向中国证监会提交书面报告：
（一）章程、注册资本或注册地址变更；
（二）分立、合并或其他重大并购活动；
（三）董事长（理事长）或总经理变动；
（四）经营严重亏损或财务严重困难；
（五）所在国家或地区的监管当局对其采取重大监管措施；
（六）对经营有重大影响的其他事项。
第三十一条 中国证监会依法对代表处进行定期或不定期的现场或非现场检查，内容包括但不限于：
（一）代表处是否从事或变相从事经营性活动；
（二）代表处是否进行广告宣传，是否面向个人开展推介活动；
（三）代表处是否未经事先报告擅自组织举办面向企业的大型推介活动；
（四）代表处申报材料的内容是否真实、准确；
（五）代表处变更事项的手续是否完备；
（六）代表处工作人员的聘用或变更手续是否完备；
（七）中国证监会认为需要检查的其他事项。
第三十二条 代表处违反本办法的,中国证监会可以对代表处的首席代表和其他直接责任人员采取责令整改、监管谈话、出具警示函等监管措施；情节严重的，中国证监会可以对代表处的首席代表和其他直接责任人员采取证券市场禁入的措施。
第五章 法律责任
第三十三条 境外证券交易所未经批准，擅自设立代表处或以代表处名义或其他形式在中国境内开展活动的，中国证监会依法予以取缔。触犯刑法的，依法追究刑事责任。
第三十四条 代表处从事或变相从事经营性活动的，中国证监会依法予以警告、没收违法所得、撤销代表处等处罚。
第三十五条 代表处进行广告宣传或面向个人开展推介活动的，中国证监会依法予以警告、撤销代表处等处罚。
第三十六条 代表处未经事先报告擅自组织举办面向企业的大型推介活动的，中国证监会依法予以警告、罚款、撤销代表处等处罚。
第三十七条 代表处进行虚假宣传或不正当竞争的，中国证监会依法予以警告、罚款、撤销代表处等处罚。
第六章 附 则
第三十八条 香港特别行政区、澳门特别行政区和台湾地区的证券交易所在内地设立代表处，参照本办法办理。
第三十九条 申请人依照本办法提交的文件应当使用中文。境外证券交易所章程、主要业务规则和年报可提供中文摘要，并附原文。
第四十条 本办法自2007年7月1日起施行。
《境外证券交易所驻华代表机构管理办法》已经2007年4月3日中国证券监督管理委员会第203次主席办公会议审议通过，现予公布，自2007年7月1日起施行。
中国证券监督管理委员会主席： 尚福林 二○○七年五月二十日
境外证券交易所驻华代表机构管理办法
第一章 总 则
第一条 为了规范境外证券交易所驻华代表机构的设立及其业务活动，根据《中华人民共和国证券法》及有关法规，制定本办法。
第二条 本办法所称境外证券交易所，是指在境外设立的股票交易所、证券自动报价或电子交易系统或市场。本办法所称境外证券交易所驻华代表机构（以下简称代表处），是指境外证券交易所在中国境内获准设立并专门从事联络、推介和调研等非经营性活动的常驻代表机构。代表处主要负责人称首席代表。
第三条 代表处应当遵守中国法律、法规和中国证券监督管理委员会（以下简称中国证监会）的有关规定。代表处的合法权益受中国法律保护。
第四条 中国证监会根据审慎监管的原则，依法对代表处进行审批和监管。
第二章 申请与设立第五条 申请设立代表处的境外证券交易所（以下简称申请人），应当具备下列条件：（一）申请人所在国家或地区具有完善的金融监管法律、法规；（二）申请人所在国家或地区的金融监管当局与中国证监会签订了监管合作谅解备忘录，并保持着良好的合作关系；（三）申请人由其所在国家或地区金融监管当局批准设立或认可； （四）申请人设立二十年以上，运作稳健规范，财务状况良好；（五）中国证监会提出的其他审慎性条件。
第六条 申请人只能申请设立一个代表处，申请时应当向中国证监会提交下列材料：（一）由董事长（理事长）或总经理签署的致中国证监会的申请书；（二）所在国家或地区金融监管当局出具的同意申请人设立代表处的意见书或其他有关文件；（三）所在国家或地区有关主管当局核发的、经所在国家或地区有权进行公证、认证的机构公证、认证并经中国驻该国使（领）馆认证的营业执照或合法开业证明的复印件；（四）交易所章程和主要业务规则；（五）董事会（理事会）成员名单、管理层人员名单；（六）最近三年的年报；（七）代表处设立方案，包括但不限于设立的目的、必要性、工作规划、内部机构设置与人员配备、管理制度及办公场所选址等内容； （八）由董事长（理事长）或总经理签署的首席代表授权书；（九）申请人就拟任首席代表没有因重大违法违规行为受到处罚的声明，且该声明经过申请人所在国家或地区公证机构的公证；（十）拟任首席代表的身份证明、学历证明和简历；（十一）中国证监会要求提交的其他文件。
第七条 中国证监会受理审核申请人提交的设立申请材料。决定批准的，颁发批准书。
第八条 代表处应当自中国证监会批准之日起九十日内，凭批准书依法办理工商登记手续、税务登记手续，迁入固定的办公场所，并向中国证监会书面报告下列事项：
（一）工商登记证明、税务登记证明；
（二）办公场所的合法使用权证明；
（三）办公场所电话、传真、邮政通讯地址；
（四）首席代表移动电话、电子邮箱。
代表处未在上述规定时间内向中国证监会提交书面报告的，原批准书自动失效。
第九条 代表处的名称应当按下列顺序组成：“境外证券交易所所在国家或地区名称”、“境外证券交易所名称”、“代表处所在城市名称”和“代表处”。
第十条 代表处除首席代表外，其他主要工作人员应当称“代表”、“副代表”。
第十一条 代表处首席代表的任职资格由中国证监会审批。首席代表应当具备下列条件：（一） 熟悉中国金融法律、法规； （二） 具有大学本科以上学历，从事金融或经济工作十年以上，在最近五年内至少有三年以上从事中国业务的经历；（三） 品行良好，没有受过刑事、行政处罚等不良记录。
第十二条 代表处聘用代表、副代表，自聘用之日起五个工作日内，应当将上述人员的名单、身份证明和简历报中国证监会备案。
第三章 变更与撤销
第十三条 代表处变更名称，应当向中国证监会提出申请，并提交其交易所董事长（理事长）或总经理签署的申请书及中国证监会要求的其他文件。
第十四条 代表处变更首席代表，应当向中国证监会提出申请，并提交其交易所董事长（理事长）或总经理签署的申请书及本办法第六条（八）至（十一）项规定的材料。
第十五条 中国证监会受理审核申请人提交的变更名称、变更首席代表的申请材料。决定批准的，换发批准书。
第十六条 代表处变更或增减代表、副代表，应当自变更之日起五个工作日内，将上述人员的名单、身份证明和简历报中国证监会备案。
第十七条 代表处只能在所在城市变更办公场所。自变更之日起五个工作日内，代表处应当向中国证监会书面报告下列事项：
（一）新办公场所合法使用权证明；
（二）新办公场所电话、传真、邮政通讯地址。本条所称变更办公场所指原有办公场所的搬迁、扩大或缩小。
第十八条 代表处撤销，应当提前二十个工作日向中国证监会报告，并凭中国证监会出具的同意撤销的有关确认文件向工商登记机关办理注销登记。代表处注销后，应当在五个工作日内向中国证监会提交有关注销证明文件。
第十九条 代表处撤销后，未了事宜由其交易所承担责任。
第四章 监督管理
第二十条 代表处应当有独立、固定的办公场所，配备合理数量的工作人员，其中境内居民所占比例不低于50%。代表处的外籍工作人员入境后应当按照有关法律规定办理居留手续。
第二十一条 首席代表不得由其总部或地区总部人员兼任，也不得在中国境内任何经营性机构中任职。首席代表应当常驻代表处主持日常工作。离境时间连续超过三十日的，应当向中国证监会报告，并指定专人代行其职。首席代表在其他机构兼职，或未报告擅自离境超过三十日的，中国证监会可以要求其交易所更换首席代表。
第二十二条 代表处及其工作人员，不得从事或变相从事任何经营性活动，不得与任何法人或自然人签订可能给代表处或其交易所带来收入的协议或合同。
第二十三条 代表处及其工作人员，不得以任何形式进行广告宣传，不得以任何形式面向个人开展推介活动。
第二十四条 代表处及其工作人员组织举办面向企业的大型推介活动时，应当事先将活动方案报送中国证监会。中国证监会十个工作日内未提出异议的，方可进行。
第二十五条 代表处及其工作人员，不得以任何形式进行虚假推介，不得以任何形式进行不正当竞争，不得以任何形式为其他机构谋取利益。
第二十六条 代表处应当于每一年度结束之日起二个月内，向中国证监会报送上年度工作报告。
第二十七条 代表处应当于每一年度结束之日起二个月内，向中国证监会报送上年度在其交易所上市交易的中国公司的情况及其中资会员的情况。
第二十八条 代表处应当在其交易所会计年度结束之日起四个月内，向中国证监会报送其交易所上一年度的年报。
第二十九条 境外证券交易所对在其上市交易的中国公司及其中资会员进行重大处罚时，代表处应当及时通报中国证监会，并自处罚之日起十个工作日内，向中国证监会提交书面报告。
第三十条 境外证券交易所有下列情形之一的，代表处应当自事件发生之日起十个工作日内，向中国证监会提交书面报告：
（一）章程、注册资本或注册地址变更；
（二）分立、合并或其他重大并购活动；
（三）董事长（理事长）或总经理变动；
（四）经营严重亏损或财务严重困难；
（五）所在国家或地区的监管当局对其采取重大监管措施；
（六）对经营有重大影响的其他事项。
第三十一条 中国证监会依法对代表处进行定期或不定期的现场或非现场检查，内容包括但不限于：
（一）代表处是否从事或变相从事经营性活动；
（二）代表处是否进行广告宣传，是否面向个人开展推介活动；
（三）代表处是否未经事先报告擅自组织举办面向企业的大型推介活动；
（四）代表处申报材料的内容是否真实、准确；
（五）代表处变更事项的手续是否完备；
（六）代表处工作人员的聘用或变更手续是否完备；
（七）中国证监会认为需要检查的其他事项。
第三十二条 代表处违反本办法的,中国证监会可以对代表处的首席代表和其他直接责任人员采取责令整改、监管谈话、出具警示函等监管措施；情节严重的，中国证监会可以对代表处的首席代表和其他直接责任人员采取证券市场禁入的措施。
第五章 法律责任
第三十三条 境外证券交易所未经批准，擅自设立代表处或以代表处名义或其他形式在中国境内开展活动的，中国证监会依法予以取缔。触犯刑法的，依法追究刑事责任。
第三十四条 代表处从事或变相从事经营性活动的，中国证监会依法予以警告、没收违法所得、撤销代表处等处罚。
第三十五条 代表处进行广告宣传或面向个人开展推介活动的，中国证监会依法予以警告、撤销代表处等处罚。
第三十六条 代表处未经事先报告擅自组织举办面向企业的大型推介活动的，中国证监会依法予以警告、罚款、撤销代表处等处罚。
第三十七条 代表处进行虚假宣传或不正当竞争的，中国证监会依法予以警告、罚款、撤销代表处等处罚。
第六章 附 则
第三十八条 香港特别行政区、澳门特别行政区和台湾地区的证券交易所在内地设立代表处，参照本办法办理。
第三十九条 申请人依照本办法提交的文件应当使用中文。境外证券交易所章程、主要业务规则和年报可提供中文摘要，并附原文。
第四十条 本办法自2007年7月1日起施行。
TAX REFUND FOR RE-INVESTMENT WITH PROFIT BY FOREIGN INVESTOR
PART ONE: WHAT IS TAX REFUND FOR RE-INVESTMENT?
Tax Refund for Re-investment is a preferential tax policy adopted by the Chinese government for the purpose of encouraging foreign investors in the existing Chinese-foreign equity joint venture companies, Chinese-foreign cooperative joint venture companies and wholly foreign-owned enterprises (“Foreign-invested Company”) to re-invest with their profit obtained from the Foreign-invested Company into China’s domestic enterprises.
In accordance with Income Tax Law of the People’s Republic of China on Enterprises with Foreign Investment and Foreign Enterprises and Rules for the Implementation of the Income Tax Law of the People’s Republic of China on Enterprise with Foreign Investment and Foreign Enterprises, there are following situations for tax refund for re-investment:-
1. Any foreign investor of Foreign-invested Company who reinvests directly its profit obtained from Foreign-invested Company into that company by increasing its registered capital, or uses the profit as capital investment to establish other foreign-invested company and operates it for a period of no less than 5 years, shall, upon the approval by the tax authorities to the application filed by the investor, be refunded 40 percent of the income tax already paid on the reinvested amount. In the event that the foreign investor withdraws its reinvestment before the expiration of term of 5 years, it shall repay the refunded tax.
2. Any foreign investor of Foreign-invested Company who reinvests directly its profit obtained from Foreign-invested Company and sets up and/or expands export-oriented company or advanced technology company and operates it for a period of no less than 5 years, shall, upon the approval by the tax authorities to the application filed by the investor, be refunded 100 percent of the income tax already paid on the reinvested amount. In the event that the foreign investor withdraws its reinvestment before the expiration of term of 5 years, it shall repay the refunded tax.
3. Any foreign investor of Foreign-invested Company in the area of Hai Nan Special Economic Zone who reinvests directly its profit obtained from Foreign-invested Company in infrastructure projects and/or agriculture development company in the Zone and operates it for a period of no less than 5 years, shall, upon the approval by the tax authorities to the application filed by the investor, be refunded 100 percent of the income tax already paid on the reinvested amount. In the event that the foreign investor withdraws its reinvestment before the expiration of term of 5 years, it shall repay the refunded tax.
The term of “reinvest directly” in above situations refers to profit obtained from Foreign-invested Company by foreign investor which prior to receipt is directly used to increase registered capital, or which following receipt is directly used to invest other foreign-invested company, including (i) setting up a new foreign-invested company with its registered capital from the profit; (ii) increasing registered capital of an existing foreign-invested company with the profit.
However, in the event a foreign investor purchases equity interest of other investors in an existing company, including the Foreign-invested Company, with profit obtained from Foreign-invested Company and such purchase does not increase registered capital and operation capital for that existing company, the foreign investor is not entitled to tax refund.
No tax refund can be enjoyed by a foreign investor in the event the foreign investor re-invests its income gained from liquidation of Foreign-invested Company.
According to a BOD resolution, Foreign-invested Company can use its accumulation fund or development fund or reserve fund which is drawn from the after-tax profit as reinvestment and increase its registered capital. The foreign investor is also entitled to tax refund for the part of such reinvestment which belongs to foreign investor.
PART TWO: WHO CAN ENJOY TAX REFUND POLICY?
Generally speaking, foreign investors in Foreign-invested Company can be entitled to the tax refund and their Chinese partners cannot enjoy it.
In addition, investment company whose equity interest is 100% held by foreign investor in China can be deemed as foreign investor and can also enjoy the tax refund when it reinvests the profit from foreign-invested company in the territory of China.
PART THREE: THE PROFIT COVERAGE
In accordance with Income Tax Law of the People’s Republic of China on Enterprises with Foreign Investment and Foreign Enterprises, foreign investor can apply for tax refund when it reinvests directly with the after tax profit. Such profit shall be the profit that has been realized and belongs to the foreign investor according to its investment proportion in Foreign-invested Company.
In addition, Foreign-invested Company, according to its BOD resolution, uses its accumulation fund, development fund or reserve fund which is drawn from the after tax profit as reinvestment and increases its company registered capital. Tax refund is applicable to the part of such reinvestment which belongs to the foreign investor.
However, foreign investor cannot be entitled to tax refund for reinvestment with following profits:-
1. Foreign investor acquires the equity interest of a foreign-invested company through purchasing equity interest from shareholders of such company. The profit already realized prior to such equity interest transfer;
2. Prior to distribution of profit, the profit that has already been transferred outside of Foreign-invested company through transaction between affiliated companies;
3. The profit that will be realized in the future and the foreign investor promises to use it as reinvestment. However, actually such profit shall complement as part of the registered capital;
4. The profit that foreign investor has already remitted outside of China and then uses it as reinvestment.
PART FOUR OPERATION PERIOD
In Part one we mentioned the operation period shall be no less than 5 years. If foreign investor reinvests directly with profit into its company where it obtains the profit or other foreign-invested company which has already started production and operation (including trial production and operation), the operation period starting from the date of actual input of reinvestment capital shall be no less than 5 years. If foreign investor uses the profit to establish a new foreign-invested company, the operation period starting from the date of production and operation (including trial production and operation) shall be no less than 5 years.
However, for the reasonable business purpose, in the course of corporate restructure, if foreign investor, including investment company which is 100% held by the foreign investor, transfers its reinvestment equity interest to a company which is owned directly or indirectly by the same foreign investor, or is owned by an entity/individual who also 100% controls the foreign investor, such transfer will not be deemed as withdrawal of reinvestment and refunded tax can be kept by the foreign investor.
Tax Refund for Re-investment is a preferential tax policy adopted by the Chinese government for the purpose of encouraging foreign investors in the existing Chinese-foreign equity joint venture companies, Chinese-foreign cooperative joint venture companies and wholly foreign-owned enterprises (“Foreign-invested Company”) to re-invest with their profit obtained from the Foreign-invested Company into China’s domestic enterprises.
In accordance with Income Tax Law of the People’s Republic of China on Enterprises with Foreign Investment and Foreign Enterprises and Rules for the Implementation of the Income Tax Law of the People’s Republic of China on Enterprise with Foreign Investment and Foreign Enterprises, there are following situations for tax refund for re-investment:-
1. Any foreign investor of Foreign-invested Company who reinvests directly its profit obtained from Foreign-invested Company into that company by increasing its registered capital, or uses the profit as capital investment to establish other foreign-invested company and operates it for a period of no less than 5 years, shall, upon the approval by the tax authorities to the application filed by the investor, be refunded 40 percent of the income tax already paid on the reinvested amount. In the event that the foreign investor withdraws its reinvestment before the expiration of term of 5 years, it shall repay the refunded tax.
2. Any foreign investor of Foreign-invested Company who reinvests directly its profit obtained from Foreign-invested Company and sets up and/or expands export-oriented company or advanced technology company and operates it for a period of no less than 5 years, shall, upon the approval by the tax authorities to the application filed by the investor, be refunded 100 percent of the income tax already paid on the reinvested amount. In the event that the foreign investor withdraws its reinvestment before the expiration of term of 5 years, it shall repay the refunded tax.
3. Any foreign investor of Foreign-invested Company in the area of Hai Nan Special Economic Zone who reinvests directly its profit obtained from Foreign-invested Company in infrastructure projects and/or agriculture development company in the Zone and operates it for a period of no less than 5 years, shall, upon the approval by the tax authorities to the application filed by the investor, be refunded 100 percent of the income tax already paid on the reinvested amount. In the event that the foreign investor withdraws its reinvestment before the expiration of term of 5 years, it shall repay the refunded tax.
The term of “reinvest directly” in above situations refers to profit obtained from Foreign-invested Company by foreign investor which prior to receipt is directly used to increase registered capital, or which following receipt is directly used to invest other foreign-invested company, including (i) setting up a new foreign-invested company with its registered capital from the profit; (ii) increasing registered capital of an existing foreign-invested company with the profit.
However, in the event a foreign investor purchases equity interest of other investors in an existing company, including the Foreign-invested Company, with profit obtained from Foreign-invested Company and such purchase does not increase registered capital and operation capital for that existing company, the foreign investor is not entitled to tax refund.
No tax refund can be enjoyed by a foreign investor in the event the foreign investor re-invests its income gained from liquidation of Foreign-invested Company.
According to a BOD resolution, Foreign-invested Company can use its accumulation fund or development fund or reserve fund which is drawn from the after-tax profit as reinvestment and increase its registered capital. The foreign investor is also entitled to tax refund for the part of such reinvestment which belongs to foreign investor.
PART TWO: WHO CAN ENJOY TAX REFUND POLICY?
Generally speaking, foreign investors in Foreign-invested Company can be entitled to the tax refund and their Chinese partners cannot enjoy it.
In addition, investment company whose equity interest is 100% held by foreign investor in China can be deemed as foreign investor and can also enjoy the tax refund when it reinvests the profit from foreign-invested company in the territory of China.
PART THREE: THE PROFIT COVERAGE
In accordance with Income Tax Law of the People’s Republic of China on Enterprises with Foreign Investment and Foreign Enterprises, foreign investor can apply for tax refund when it reinvests directly with the after tax profit. Such profit shall be the profit that has been realized and belongs to the foreign investor according to its investment proportion in Foreign-invested Company.
In addition, Foreign-invested Company, according to its BOD resolution, uses its accumulation fund, development fund or reserve fund which is drawn from the after tax profit as reinvestment and increases its company registered capital. Tax refund is applicable to the part of such reinvestment which belongs to the foreign investor.
However, foreign investor cannot be entitled to tax refund for reinvestment with following profits:-
1. Foreign investor acquires the equity interest of a foreign-invested company through purchasing equity interest from shareholders of such company. The profit already realized prior to such equity interest transfer;
2. Prior to distribution of profit, the profit that has already been transferred outside of Foreign-invested company through transaction between affiliated companies;
3. The profit that will be realized in the future and the foreign investor promises to use it as reinvestment. However, actually such profit shall complement as part of the registered capital;
4. The profit that foreign investor has already remitted outside of China and then uses it as reinvestment.
PART FOUR OPERATION PERIOD
In Part one we mentioned the operation period shall be no less than 5 years. If foreign investor reinvests directly with profit into its company where it obtains the profit or other foreign-invested company which has already started production and operation (including trial production and operation), the operation period starting from the date of actual input of reinvestment capital shall be no less than 5 years. If foreign investor uses the profit to establish a new foreign-invested company, the operation period starting from the date of production and operation (including trial production and operation) shall be no less than 5 years.
However, for the reasonable business purpose, in the course of corporate restructure, if foreign investor, including investment company which is 100% held by the foreign investor, transfers its reinvestment equity interest to a company which is owned directly or indirectly by the same foreign investor, or is owned by an entity/individual who also 100% controls the foreign investor, such transfer will not be deemed as withdrawal of reinvestment and refunded tax can be kept by the foreign investor.
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