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Oct 2016, Issue 28

Highlights on the Final FIE Record-filing Administrative Measures and the New FIE Administration System


The Standing Committee of the National People's Congress ("NPC") of China passed the "Decision" in September 2016. The Decision specified the establishment and alteration of Foreign-invested Enterprise (FIE), if not related to the items in the "special administrative measures regarding FIEs' permission to China", would be subject to record-filing administration instead of the existing approval measures. On the same day, the Ministry of Commerce (MOC) released <Interim Provisional Measures for the Record-filing Administration on the Establishment and Alteration of FIE (Discussion Draft)> (hereinafter referred to as "<Provisional Measures (Discussion Draft)>"), which provided the applicable scope, the record-filing procedures, the supervision and inspection measures as well as the legal liabilities in relation to the record-filing administration mechanism of FIE and was open to public comments.

On 8 October 2016, the MOC released the final version of <Provisional Measures for the Record-filing Administration on the Establishment and Alteration of FIE> (MOC Order [2016] No. 3) (hereinafter referred to as "<Provisional Measures for the Record-filing Administration>"), which shall be implemented as of the date of promulgation. The final version of <Provisional Measures for the Record-filing Administration> has been revised and improved based on <Provisional Measures (Discussion Draft)>. Meanwhile, the person in charge of the Department of Treaty and Law of the MOC gave an official interpretation on <Provisional Measures for the Record-filing Administration>, which specified the applicable scope (including the scope of "special administrative measures regarding FIEs' permission to China"), determination of the ultimate controlling person of FIE, record-filing institutions, procedures and system as well as the interim and post-supervision in relation to the record-filing administration mechanism of FIE. Since then, the reform of the record-filing administration on the establishment and alteration of FIE has been finally launched.

In this issue of China Tax/Business News Flash, we will introduce the key points for the major changes in the final version of <Provisional Measures for the Record-filing Administration> compared with the draft version, the scope of the "special administrative measures regarding FIEs' permission to China" as well as share our views on the new FIE comprehensive administration system.


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