Going back to basics — the establishment of a foreign-invested enterprise in mainland China

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Establishing a foreign-invested enterprise (FIE) requires prior approval from the Ministry of Commerce (MOFCOM) and its local branches and registration with the Administration of Industry and Commerce (AIC). This is before meeting any licensing requirements for foreign direct investment (FDI) in special industries. Once the initial business licence has been obtained, an FIE also has to register with various other authorities including tax, customs, foreign exchange, finance, statistics and organisational code. Preparation for all of this is time consuming and the whole process usually takes two to three months, but sometimes longer. This has frustrated many foreign investors.

Since 1 March 2013, Shenzhen and Zhuhai in Guangdong Province have started a pilot reform scheme on the AIC registration system, easing the situation for reluctant investors. On 10 March 2013, the General Office of the State Council issued the Circular on the Division of Responsibilities for Implementing the Plan on Reform of the State Council Organs and Changes to the Functions thereof (State Council Scheme), stressing implementing measures on administration reform, including a special section on nationwide reform of the AIC registration mechanism. The State Council Scheme requires that the State Administration for Industry and Commerce (SAIC) formulate detailed rules by the end of June 2013…

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