Interpretation of the Provisions on Registration Administration of Enterprises in the China (Shanghai) Pilot Free Trade Zone

The English version is for reference only. If there is any inconsistency or conflict between the English and Chinese version, the Chinese version shall prevail.

To implement the provision of the Framework Plan for the China (Shanghai) Pilot Free Trade Zone that “industrial and commercial registration shall be linked with the reform of the commercial registration rules, and the registration process shall be gradually optimized” and refine the provisions of the Measures for Administration of the China (Shanghai) Pilot Free Trade Zone on the industrial and commercial registration administration, we formulated the Provisions on Registration Administration of Enterprises in the China (Shanghai) Pilot Free Trade Zone (hereinafter the “Provisions”). We hereby interpret the Provisions as follows:

I. Basic Framework of the Provisions

There are 21 articles in the Provisions, mainly setting forth the specific registration administration for registered capital subscription registration system, “business license before other permits” registration system, annual report publication system, foreign-invested advertising enterprise project recordation system, unified business license format and other measures.

II. Main Content of the Provisions

1. Scope of application Article 2 of the Provisions specifies the scope of application. First, specify applicable territory, i.e., the China (Shanghai) Pilot Free Trade Zone (hereinafter the FTZ). Second, specify applicable objects, i.e., enterprises as a legal person, non-corporate enterprises and their branches, excluding specialized cooperatives of farmers and individual industrial and commercial households.

2. Registered capital subscription registration system. Articles 4-6 of the Provisions refine the specific measures for the pilot programs of the registered capital subscription registration system. Except as otherwise required by any law or administrative regulation regarding the paid-in registration of registered capital of a company, the subscription registration system of registered capital shall be implemented for any other company, and enterprise registration conditions shall be relaxed correspondingly and the access threshold shall be reduced, to improve the investment environment and fully reflect the concept of “relaxing access restrictions” on market access.

3. “Business license before other permits” registration system. It is specified in Article 7 of the Provisions that except for the pre-licensing items of enterprise registration provided by the laws, administrative regulations and decisions of the State Council, enterprises in the FTZ may engage in general production and operation activities after obtaining a business license, and enterprises that apply for engaging in other licensing projects shall engage in operation activities subject to the issuance of a business license and permit or approval document. The implementation of the “business license before other permits” registration system helps enterprises to reduce market access costs and further promotes the reform of the administrative approval system.

4. Administration of the filing of foreign-invested enterprises. In accordance with the Measures for Administration of the Filing of Foreign-Invested Enterprises in the China (Shanghai) Pilot Free Trade Zone, the establishment and change of any foreign-invested enterprise not listed in the Special Administrative Measures for the Access of Foreign Investors (Negative List) shall apply filing administration. There are relevant provisions in Article 8 of the Provisions.

5. Foreign-invested advertising project recordation system It is specified in Articles 9 and 10 of the Provisions that the administration mode shall be transformed in foreign-invested advertising fields, the access restrictions on foreign-invested advertising enterprises shall be fully released, and the approval system for foreign-invested advertising enterprise projects in the FTZ and formation of branch offices of foreign-invested advertising enterprise in the FTZ shall be replaced with a recordation system.

6. “One-off acceptance” mechanism. To make things convenient for applicants in the FTZ and to improve administrative efficiency, pilot programs of the mechanism of “one-off acceptance” shall be implemented in the FTZ. It is further specified in Article 12 of the Provisions.

7. Unified business license format. To match up all pilot measures of the FTZ, the Provisions specify a unified business license format. Except for Business Licenses for Specialized Cooperatives of Farmers as Legal Persons and Business Licenses for Individual Industrial and Commercial Households, all business licenses shall adopt the same format, i.e., Enterprise Business License of the China (Shanghai) Pilot Free Trade Zone. The format of the FTZ business license has been approved by SAIC.

8. Annual report publication system Article 14-16 of the Provisions are matched up with the enterprise annual report publication system, specifying the time, requirements, responsibilities and other contents of enterprise annual report publication.

Provided by Lawyers Working Committee of Pudong New Area