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China Business Setup: Government Further Simplify Administration

Updated:2018-8-22 11:56:04    Source:www.tannet-group.comViews:102

China business setup is expected to be more simpler as the country is taking measures to cut administrative approvals. According to a circular published on August 3, 2018, the State Council has decided to cancel another 11 administrative approval items to further simplify administration. The canceled items include employment permits for residents from Hong Kong, Macao special administrative regions and Taiwan in the Chinese mainland, project approvals for foreign investment in the transport sector, visas for ships’ commutes to fishing ports, record filings for establishing company branches, and announcement of withdrawing business licenses. Details are listed below.

1. Work permits for residents from Hong Kong, Macao, and Taiwan
After the cancellation of the approval, the Ministry of Human Resources and Social Security (MOHRSS) will be fully responsible for employment services, social security, unemployment registration, labor rights protection, etc, for employees from Hong Kong, Macao, and Taiwan.

2. Verification of corporate group
A corporate group or group of companies is a collection of parent and subsidiary corporations that function as a single economic entity through a common source of control.

In China, a company has to go through a series of verification before taking the "Group" title. State Market Regulatory Administration will roll out specific standards and requirements to guide companies how to properly use "Group"  when the verification requirement is canceled.

3. Record filings for established company branches
Initially, it is the Industry and Commerce Department that monitors all procedures for record filings for established company branches. After the state institutional reform comes into effect, the State Administration for Industry and Commerce will be directly under the administration of State Market Regulatory Administration. 

The record filings for established company branches will be canceled, literally, it is applicable to all types of companies as the document does not make any exclusion, but we sill need to wait for the officially detailed sayings. Meanwhile, the State Market Regulatory Administration and Industry and Commerce Department TWO departments will increase inspections for company affairs.

4. Announcement to withdraw business licenses
Applicants are originally required to place their announcement to withdraw their business licenses in the media. After the cancellation of the announcement, the applicants are only required to post a free announcement on the related administrative department.

5. Record filings for established, converting, canceled foreign partnership enterprises
A partnership in the People's Republic of China is a business entity governed by the Partnership Enterprise Law. After the cancellation of the record filing, instead, the State Market Regulatory Administration and Industry and Commerce Department will build a centralized monitor system to get the updated information of enterprises.

6. Project approvals for foreign investment in the transportation sector
China opens more sectors to embrace foreign investment. After the cancellation of the approval, foreign investments will be fairly treated as the local investment. Foreign investors can apply for the Passenger Transportation License, Cargo Transportation License according to the law and legally own a business in the transportation sector.

7. Vehicle maintenance and operation permit
After the cancellation of the approval, the Ministry of Transport will announce specific standards on vehicle maintenance business, impose penalties on violations of laws and regulations and establish a blacklist system to record lawbreakers, which is connecting to the current credit system.

8. Visas for ships’ commutes to fishing ports
After the approval is canceled, the reporting system will be implemented instead. The Ministry of Agriculture and Rural Affairs will require the local fishery administrative department to strengthen supervision by defining the contents of the inbound and outbound reports, etc.

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