Laws and Regulations Update in November 2016

1.The Ministry of Commerce Publishes the Provisional Rules on the Establishment and Change of Registered Records of Foreign Invested Enterprises

Published on 8th October 2016, the Rules consists of clauses on the application scope, registration process, supervision and inspection procedures, legal responsibilities, etc. relating to the registration policy for the foreign invested businesses applying for establishment or a change of registered records not involving special access rules of PRC, set out in the revised versions of four foreign investment related laws including the Law of Foreign-funded Enterprises, issued by the National People’s Congress Standing Committee.   [Full Text]

2. The Ministry of Finance and the Ministry of Human Resources and Social Security issue the Interim Measures on the Provisional Rules on Occupational Annuities and Funds

Published on 28th September 2016, the Measures has made it clear that the forms of occupational annuities and funds are limited to domestic investments and that the total value of the investments of stocks, stock funds, mixed funds, stocks used as pension products cannot exceed 30% of the net assets of a particular investment portfolio.   [Full Text]

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Laws and Regulations Update in October 2016

1. Decision of the Standing Committee of the National People’s Congress on Amending Four Laws including the Law of the People’s Republic of China on Wholly Foreign-Owned Enterprises

Published on 5th September 2016 and coming into effect on 1st October 2016, the Decision involves the amendment of Law of the PRC on Wholly Foreign-Owned Enterprises, Law of the PRC on Chinese-Foreign Equity Joint Ventures, Law of the PRC on Chinese-Foreign Contractual Joint Ventures and Law of the PRC on the Protection of Investments of Taiwan Compatriots. According to the amended laws, the registration system applies to foreign invested companies, joint ventures, Chinese-Foreign cooperative companies, which are not required by national laws to follow special market access administration rules promulgated by or with approval of the State Council, when they are being established or undergoing a change. The decrees issued by the State Council ordering a temporary change of laws and rules for the free trade zone as authorized by the Standing Committee of the National People’s Congress will no longer continue in effect.   [Full Text]

2. The State Council Makes the Opinions on Ensuring the Continuous Healthy Development of Business Startups Available to the Public

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Laws and Regulations Update in September 2016

1. The Ministry of Transport and Seven Other Departments Co-Promulgate the Interim Measures on the Administration of Online Taxi Booking

The Ministry of Transport, the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of Commerce, the State Administration for Industry and Commerce, the General Administration of Quality Supervision, Inspection and Quarantine and the Cyberspace Administration, of the People’s Republic of China co-promulgated the Interim Measures on the Administration of Online Taxi Booking (“Measures”) on 14th July, which will take effect on 1st November. Qualified private cars under the Measures can be used as vehicles bookable online and registered as “taxis for passengers to be booked online”. The Measures further expressly sets out that “the fare for the vehicles bookable online is subject to variable market prices, except the municipal government believes it necessary to implement the government’s guidance price”, “any vehicle bookable online that has been driven for up to 600 thousand kilometers must be reported as an abandoned vehicle”, and “any person driving a vehicle bookable online is required to have no criminal record”.   [Full Text]

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Laws and Regulations Update in August 2016

1. The Ministry of Justice Issues the Notice on the Revocation of the Notice of the Ministry of Justice and the Ministry of Construction on Strengthening the Notarization Work for the Property Registration Administration

According to the Notice of the Ministry of Justice on the Revocation of the Notice of the Ministry of Justice and the Ministry of Construction on Strenthening the Notarization Work for the Property Registration Administration, notarization is not necessary to complete real estate registration formalities relating to inheritance, will, bequeathing, ownership transfer of property involving persons from abroad or Hong Kong, Macao or Taiwan.   [Full Text]

2. The State Administration for Industry and Commerce Promulgates the Interim Measures on Internet Advertising Administration

The State Administration for Industry and Commerce promulgated the Interim Measures on Internet Advertising Administration (“Interim Measures”), which will come into effect as of 1st September 2016.

The Interim Measures was made by taking account of the actualities of the internet advertising industry to give details about how to implement the new Advertising Law, set standards for Read More...

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Laws and Regulations Update in July 2016

1. The State Council Publishes the Guiding Opinions on the Establishment and Strengthening of the Credit-Based Incentive and Punishment System in Order to Accelerate the Build-up of Social Credit and Moral Awareness

 

On 12th June 2016 the State Council published the Guiding Opinions on the Establishment and Strengthening of the Credit-Based Incentive and Punishment System in Order to Accelerate the Build-up of Social Credit and Moral Awareness (“Guiding Opinions”)

The Guiding Opinions indicates the necessity of the rapid development of the social credit system, making information about a person’s credit more widely available and shared, by using motivation and restraint in a legal way and creating a credit-based incentive and punishment mechanism involving government authorities and other communities in various regions, departments and areas, in order to make sure that people could do businesses in legal and honest ways without violating the good market order, in a society with good moral awareness. [Full Text]

2. The State Administration for Industry and Commerce Publishes the Opinions on the Administration of Expansion of the Opening-up to Hong Kong and Macao Residents’ Read More...

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Laws and Regulations Update in May 2016

1. The Supreme People’s Court Issues Official Reply Concerning the Disposition of Seized Property by the First Seizing Court and the Enforcement Court for a priority Claim

On 12th April 2016, the Supreme People’s Court issued an official reply to the request by the Higher People’s Court of Fujian Province for clarifying some issues concerning the disposition of seized property by the first seizing court and the enforcement court for a priority claim. This Judicial Interpretation came into effect on 14th April 2016.

As approved by the Supreme People’s Court, in the process of enforcement, the court first seizing, impounding, or freezing (hereinafter collectively referred to as “seizing”) any property of a debtor shall be responsible for the disposition of the seized property. However, where a claim which has entered the enforcement procedure of another court enjoys any security interest at a higher level in the order of payment or enjoys any priority in satisfaction out of the seized property (such a claim is hereinafter referred to as a “priority claim”), if it has been more than 60 days since the date of the first seizure and the first seizing court has not released any announcement of auction or entered any other sales procedure in respect of the seized property, the enforcement court for the priority claim may request that the seized property be transferred to it for enforcement.

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Laws and Regulations Update in March 2016

1 The Ministry of Land and Resources Issues the Detailed Implementation of the Interim Regulations on Real Estate Registration

On 1st January 2016, the Ministry of Land and Resources issued and made effective the Detailed Implementation of the Interim Regulations on Real Estate Registration.

(For more details, please consult with your lawyer.)

Sourced from the official website of the Ministry of Land Resources of the P.R.C.:

http://www.mlr.gov.cn/zwgk/flfg/tdglflfg/201601/t20160115_1395046.htm

2 The State Administration of Taxation to Simplify and Combine the Procedures Relating to the Filing of Tax Returns and the Payment of Taxes

On 1st February 2016, the State Administration of Taxation made the Announcement on Simplifying and Combining the Procedures Relating to the Filing of Tax Returns and the Payment of Taxes, to be effective since 1st April 2016.

(For more details, please consult with your lawyer.)

Sourced from the official website of the State Administration of Taxation of the P.R.C.:

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China Laws and Regulations Update in December 2015

1 The State Council Issues Policy, Emphasizing Combating Fake Goods Sales and Copyright Infringements on Internet                 

On 7th November, 2015, the General Office of the State Council issued the Opinions on Intensifying the Regulation of intellectual property Infringement and Counterfeiting in the Internet Domain (the “Opinions”) with the aim to strengthen regulation of infringement and counterfeiting behaviors in the internet domain and promote sound growth of the e-commerce industry. The Opinions pointed out main activities the government authorities will fight against, including online sale of counterfeited and inferior products and internet copyright infringement.

(For more details, please consult with your lawyer.)

Sourced from the official website of the Government of the P.R.C.:  http://www.gov.cn/zhengce/content/2015-11/07/content_10276.htm

2 China Securities Regulatory Commission Issue Drafts of New Editions of Supervision Regulations for Public Comment     

On 6th November, 2015, China Securities Regulatory Commission (“CSRC”) issued notice requesting public comment on the Administrative Measures for Initial Public Offerings and Listing (Consultation Read More...

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China Laws and Regulations Update in November 2015

1 The Central Government Pushes to Introduce Negative List System for Market Access across the Country

On 19th October 2015, the State Council issued the Opinions on Implementing Negative List System for Market Access (“Opinions”), pushing to introduce the system nationwide. As set forth by the Opinions, pilot negative list system for market access will be launched in certain selected districts from 1st December 2015 to 31st December 2017, and a nationally uniform negative list system for market access and corresponding policies are expected to be implemented as of 2018, under which except for those listed on the negative list, all kinds of entities have equitable access to markets and businesses under applicable laws.

(For more details, please consult with your lawyer.)

Sourced from the official website of the Government of the P.R.C.:

   http://www.gov.cn/zhengce/content/2015-10/19/content_10247.htm

2 The State Food and Drug Administration Issues New Regulations on Food Industry Licensing 

On 30th September 2015, the Read More...

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China Laws and Regulations Update in September 2015

  1. The State Council Issues Policies on the Promotion of Imports and Exports On 22nd July 2015, the General Office of the State Council of the P.R.C. issued the Policies on the Promotion of Imports and Exports.

(For more details, please refer to your lawyer.)

Sourced from the official website of the National Government of the P.R.C.:   http://www.gov.cn/zhengce/content/2015-07/24/content_10031.htm

  1. The Supreme People’s Court Issues New Judicial Interpretation, Conditionally Recognizing the Validity of Private Lending Between Enterprises

On 6th August 2015, the Supreme People’s Court issued the judicial interpretation on Private Lending, which will take into effect on 1st September 2015.

The new judicial interpretation specifies the conditions of the effectiveness of private lending agreements and notably validates private lending between private enterprises which meets the requirements thereof.

(For more details, please refer to your lawyer.)

Sourced from the official website of the Supreme People’s Court: http://www.court.gov.cn/fabu-xiangqing-15146.html

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China Laws and Regulations Update in August 2015

  1. The People’s Bank of China and the Other Nine Authorities Jointly Issue Policies on Boosting the Internet Finance Industry            

On 18th July 2015, the People’s Bank of China, the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of Finance, the State Administration for Industry and Commerce, the Legislative Affairs Office, the China Banking Regulatory Commission, the China Securities Regulatory Commission, the China Insurance Regulatory Commission and the State Internet Information Office jointly issued the Policies on Boosting the Internet Finance Industry (“Policies”).

Such Policies provide a range of instructions on supporting and encouraging internet finance activities and specify duties of administration and control over major internet finance activities such as payment over the internet, network lending, equity crowd-funding, sale of funds via the internet, internet insurance, internet trust, doing and closing transactions through the internet.

Sourced from the official website of the National Government of the P.R.C.: http://www.gov.cn/xinwen/2015-07/18/content_2899360.htm

  1. The Supreme People’s Court Issues the Decision on the Dispute of Arbitration Jurisdiction between China International Economic and Read More...

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China Laws and Regulations Update in April 2015

  1. The National Development and Reform Commission and the Ministry of Commerce Publish the Catalogue of Industries for Foreign Investment (2015 Revised Edition)                            

On the 10th March 2015, the National Development and Reform Commission and the Ministry of Commerce of the PRC published the Catalogue of Industries for Guiding Foreign Investment (2015 Revised Edition) (“Catalogue”) under the approval by the State Council of the PRC. The Catalogue will become effective on the 10th of April 2015.

The Catalogue totally contains 432 items, from which 48 items of the 471 items totally contained in the 2011 Edition, have been eliminated. Among those eliminated items, 41 ones are under the restricted class, 5 under the priority class and 2 under the prohibited class. In addition, the number of items “limited to joint investment and cooperation” in the Catalogue is 15, decreased from 43 in the 2011 Edition and the number of items applicable only to “Chinese controlled businesses” in the Catalogue is 35, decreased from 44 in the 2011 Edition.

Items under the priority class newly added to the Catalogue mainly include modern agriculture, high tech, advanced manufacturing, energy conservation, renewable energy and modern service industries.

Sourced from the official website of the National Development and Reform Commission of the PRC:   Read More...

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China Laws and Regulations Update in February 2015

  1. The New Foreign Investment Law(Draft) Published for Public Comments

On 19th of January 2015, the Ministry of Commerce of PRC published the Foreign Investment Law of PRC (Draft for Comments) (referred to as ‘draft FIL’ below). Opportunities to offer comments on the draft FIL will remain open to the public until 17th of February 2015.

Significantly, the draft FIL transforms the current foreign investment administration system by introducing the administration model combining pre-establishment national treatment policies and the Negative List and stipulating that foreigners intending to invest in one of the areas as specified in the Negative List shall apply for and obtain a foreign investment entry permit beforehand. Also, foreign investors throughout PRC shall perform the reporting obligation regardless of the Negative List. Under this new administrative system, foreign investment in most areas can be admitted to PRC without prior approval by relevant departments. In addition, the draft FIL includes provisions on China’s national security review system, the foreign investment promotion and protection system, supervision and inspection of investment and operational actions taken by foreign investors and foreign invested enterprises, strengthened in-process and after-the-fact administration.

Sourced from the official website of the Ministry of Commerce of PRC:

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Will China New Foreign Investment Law Wipe Out VIE Structure?

(By You Yunting) Abstract: The Foreign Investment Law (Draft for Comments) has shifted the standard of a company based upon the actual controller, instead of the shareholder of the company, and regulated that the domestic company must not engage in any industries where operation by foreign investors is prohibited. In case the Draft becomes law, it will cut off the survival basis of VIE structure, so that the VIE company controlled by foreign investors cannot be operated, that the overseas listed company controlled through the VIE structure by Chinese will lose its survival basis of oversea listing, and that the startup companies of VIE structure controlled by Chinese will be forced to abandon the VIE structure.

China Ministry of Commence issued the Foreign Investment Law (Drafts for Comments) (hereinafter the “Draft”) and began its revolution on the approval and management of foreign investment companies. However, the Draft regulated that a domestic company controlled by foreign investors must not engage in any industries where operation by foreign investors is prohibited, which will probably have some serious influence on industries such as internet companies that have already used variable interest entities (hereinafter the “VIE”) structure in gray zone, and might even wipe out the existence space for VIE structure. I am wondering Read More...

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