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(Dec 07, 2009) On December 2, 2009, the Administrative Measures for Foreign Enterprises and Individuals Establishing Partnership Enterprises in China were published on Xinhuanet, the online news service of the Chinese government's Xinhua News Agency, after having been issued earlier by the State Council. Effective from March 1, 2010, the Measures allow foreign investors to establish partnership enterprises in China. (Shouquan Fabu: Waiguo Qiye Huozhe Geren zai Zhongguo Jingnei Sheli Hehuo Qiye Guanli Banfa [Authorized Publication: The Administrative Measures for Foreign Enterprises and Individuals Establishing Partnership Enterprises in China] [in Chinese], XINHUANET, Dec. 2, 2009, available at http://news.xinhuanet.com/politics/2009-12/02/content_12574576.htm.)

The Measures are administrative rules for implementing the Law on Partnership Enterprises, which was first adopted in 1997. A 2006 revision of the Law took effect on June 1, 2007. The Law authorizes the State Council to formulate measures for the administration of partnership enterprises established within the territory of China by foreign enterprises or individuals (hereinafter "foreign-invested partnerships"). (THE LAWS OF THE PEOPLE'S REPUBLIC OF CHINA (2006) 125, 144 (2007).) The Law itself also applies to foreign-invested partnerships, together with other laws, regulations, rules, and industry policies that may apply to foreign investment in China (Measures, art. 3).

According to the Legislative Affairs Office of the State Council, among other purposes, the Measures are designed to simplify the approval procedure for establishing foreign-invested partnerships and to build a friendly investment environment. (Guowuyuan Fazhiban: Wei Waiguo Qiye Huozhe Geren zai Zhongguo Jingnei Sheli Hehuo Qiye Yingzao Kuansong Falü Huanjing [The State Council Legislative Affairs Office: Building a Friendly Environment for Foreign Companies and Individuals in Establishing Partnership Enterprises in China] [in Chinese], XINHUANET, Dec. 2, 2009, available at http://news.xinhuanet.com/politics/2009-12/02/content_12575463.htm.) The Measures allow foreign companies and individuals to establish locally registered partnerships in China. Foreign companies and individuals may also establish a partnership with Chinese partners or join pre-existing Chinese partnerships (Measures, arts. 2 &12).

Under the Measures, in order to establish a foreign-invested partnership in China, the applicants must register with the authorized local enterprise registration authority, i.e., the Administration for Industry and Commerce (Measures, art. 5). However, the Measures do not require that such partnerships obtain approval from the local-level unit of the Ministry of Commerce for their establishment. In addition to the documentation required under the Administrative Measures on Partnership Enterprises Registration, a statement confirming that the partnership is in compliance with China's foreign investment industry policy must also be submitted (id.). The enterprise registration authority will notify the Ministry of Commerce at the same level about the registration information (id.). If the partnership involves projects subject to foreign-investment project approval, such as approval by the National Development and Reform Commission, such approval is still required (Measures, art. 13).

Author: Laney Zhang More by this author
Topic: Foreign investment More on this topic
Jurisdiction: China More about this jurisdiction

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Last updated: 12/07/2009