Wholly Foreign-owned Enterprises

An Expert's View about Business Administration in China

Last updated: 22 Feb 2011

The application procedures for the establishment of wholly foreign-owned enterprises are more simple.
The time limit for the approval of applications for the establishment of wholly foreign-owned enterprises is as follows: The approval organ must give a written reply within 30 days after receiving preliminary application from the foreign investor and decide whether or not to grant approval within 90 days (for Guangzhou and Shenzhen, 15 working days) as from the day all documents required for the formal application are received.

For wholly foreign-owned enterprises, the date of the issuance of business licence is the date of their incorporation. The foreign investor may appoint an FIE service company or other economic organisations to handle the application procedures, but a power of attorney must be signed.

Application Procedures for Establishment of Wholly Foreign-owned Enterprises

Step 1: Submission of Preliminary Application

The foreign investor of a foreign enterprise should submit a report to the foreign trade and economic cooperation department at county level or above at the place where the proposed enterprise is located.

Content of report: Objectives of the wholly foreign-owned enterprise, business scope, scale of operation, products to be produced, technology and equipment to be used, land area required, conditions and quantities of water, electricity, gas and other forms of energy resources required, and requirements for public facilities.

Step 2: Submission of Formal Application

After the foreign investor receives a written reply from the relevant government authorities, a formal application supported by all the required documents should be filed with the local foreign trade and economic cooperation department at county, municipal or provincial level.

Documents required: Application letter for establishing the wholly foreign-owned enterprise; feasibility study report; articles of association; list of legal representatives (or board of directors); foreign investor’s legal papers and credit report; list of materials to be imported; written replies from the local approval authorities at county level or above; application for registration of the name of the enterprise approved by the provincial or municipal administration for industry and commerce; comments on the project by various government departments such as environmental protection, fire services, health and land administration. In case where two or more foreign investors are involved, copies of the contracts signed by them should be submitted to the approval authority for the record.

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Posted: 18 February 2011, last updated 22 February 2011

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