2-2 Application Procedures for Foreign-Invested Production Enterprises to Sell Their Own Products in China
Under existing laws, foreign-invested production enterprises approved by the Chinese authorities automatically enjoy domestic sale rights and no separate approval is required provided that the products they sell are products they produce in China. If an enterprise wishes to sell products not produced by itself, it has to apply for approval to expand its domestic sale operations in accordance with the Measures for the Administration of Commercial Enterprises with Foreign Investment promulgated by MOFCOM on 16 April 2004. All the investing parties of the enterprise concerned have to submit an application for the amendment of the original contract and articles of association. The application should state clearly the types of distribution activities being applied for, such as wholesale, retail, commission agency and franchising, as well as the proposed list of products. The application should be submitted in accordance with the statutory procedure for expanding an enterprise's business scope. After the applicant receives the revised Approval Certificate for Foreign-Invested Enterprise, it should proceed to the industry and commerce administration to apply for alteration of the registration details within one month. A foreign-invested production enterprise can maintain the same status after its change in business scope. As a general rule, the revenues generated from distribution business should not exceed 30% of an enterprise's total sales revenue.
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