1. Prepare to Invest in China
If your companyis ready for investing in China, You need firstly to know the China market situation and learn about the investment policies by Chinese government. The Chinese government has divided its industrial projects for investment into four categories classified as encouraged, permitted, restricted and prohibited. They are indicated in the Industry Category Guide for Foreign Investors . Secondly, the scale of the investment amount is also worth noting. For large investment projects of USD 30million or above, the approval authority rests on central government (State Council ministries); for projects under USD30million, in the unrestricted category or quota free, or license free, the approval authority goes to local government departments.
2. Find out Responsible Authorities
The State Development and Reform Commission and the Ministry of Commerce are responsible for review and approval of projects with total investment of USD30million or above or other projects that require special approval.
However, The local development offices and commercial departments of Provinces, Autonomous Regions, Municipalities are responsible for review and approval of the following projects:
• Projects with total investment under USD30million and in the unrestricted category;
• Projects under USD30million, but in restricted category which have to be filed to the State Council ministries or upper level offices; Projects involving quota issue or license matters have to go through applications to the departments of the Ministry of Commerce for consent
• Projects with USD30 million or above in the encouraged category, but with no future side effects, which have to be filed in the State Council ministries.
3. Learn about Procedures for Project Set-up
* For Joint Ventures with Equity or Contractual partners
Project Feasibility Articles of Certificate Business
Proposal Study Contract Association of approval License
How many steps?
First step: Prepare and apply for project proposal
On the knowledge of both partners' businessarea and financial status, the Chinese side is supposed to produce a project proposal to be submitted to the State or local development and reform department, or the technological renovation department for examination and approval. If approved, the Chinese side shall go to register the joint venture for protecting the companyname and trademark.
Second step: Prepare and apply for feasibility study
Once the first step is finished, you and your Chinese partner are supposed to work jointly on a feasibility study which involves markets, capital, planned site, craftsmanship, technology, facilities, environment protection, raw material sales and purchases, economic yielding, proportion of local currency and foreign currency injection, infrastructure?-etc. to be submitted to the State or local Development and Reform department, or the Technological Renovation department for examination and approval. Concurrently both you and your Chinese partner can prepare to discuss and sign a contract and other legal documents such as articles of associations.
Third step: Obtain a certificate of approval
After the feasibility study is approved, you can submit the signed contract and the articles of associations to the Ministry of Commerce or local trade and economic bureaus for examination and approval. Once the approval is granted, a certificate of approval for the joint venture is issued.
Forth step: Apply for Business License
Starting from the date of receiving the certificate of approval for the set-up of a joint venture, you and your Chinese partner shall apply to the industrial and commercial department for registration to get a businesslicense. The date of the license is the date of the establishment of the joint venture.
* For Wholly-Foreign-Owned Enterprises
If you or your companywishes to set up a branch or a subsidiary or a totally new companyin Chinawhich is 100% owned by yourself or by your company, you can entrust a qualified agency to fulfill all the procedures of application and approval of a foreign enterprise in China. The procedures are simple: to fill up the application form for setting up a foreign enterprise in China; to submit the articles of association and relevant legal documents to a local trade and economic department. Observed by the rules on Foreign Invested Enterprises, the local authority office is to grant ( or not grant ) an approval. If granted, the local authority is to issue a certificate for the wholly foreign-owned enterprise. The registration and license are proceeded with the certificate. When a businesslicense is received, you have to go through relevant registrations, such as opening up a bank account for both Chinese and foreign currencies, tax registration, customs registration, foreign currency registration, businessinspection and recruitment procedures.
