China Laws and Regulations Update in May 2019

1.Governmental Investment Rules

Promulgated by the State Council

Document number: G.L.No.712

Promulgation date: 5 May 2019

Implementation date: 1 July 2019

The Rules clarifies the definition, scope, decision making process, annual investment plan, implementation, supervision and management and legal liability connected with government investments. According to the Rules, government investment funds should be used in non-profit services, public infrastructure, agriculture and rural areas, ecological and environmental protection, significant technological advancement, social administration, national security and other public areas, mainly in non-business projects. All investors should be treated equally when allocating government investment funds. Discriminatory conditions are forbidden. (Source: Website of the State Council)

2.Regulations on Online Government Services

Promulgated by the State Council

Document number: G.L.No.716

Promulgation date: 30 April 2019

Implementation date: 30 April 2019

The Regulations clarifies the objectives and overall structure of an integrated online platform; the system for the advancement of the construction and management of the platform; the rule that government services should be provided on the internet; and legal effect of electronic signature, seals, licenses and archives. (Source: Website of the State Council)

3.Announcement on the Enterprise Income Tax Policy for Integrated Circuit Deign and Software Businesses

Promulgated by the Ministry of Finance and the State Administration of Taxation

Document number: No.68 Announcement made by MOF and SAT in 2009

Promulgation date: 17 May 2019

The Announcement states that during the grace period which starts from a profitable year before 31 December 2018, integrated circuit deign and software businesses that have been legally established and meet applicable conditions are exempt from enterprise income tax in the first and second years and pay enterprise income tax at half of the statutory rate of 25% from the third to the fifth year until the grace period expires. (Source: Website of the Ministry of Finance)

4.Rules on Management of Cross-order Funds with Deposit Receipts (Provisional)

Promulgated by the People’s Bank of China and the State Administration of Foreign Exchange

Document number: (2019) No.98 Announcement of the People’s Bank of China

Promulgation date: 25 May 2019

Implementation date: 25 May 2019

The Rules states that funds raised by foreign issuers issuing Chinese deposit receipts in China based on additional shares can be transferred in RMB or foreign currency to foreign countries or deposited and used in China. To transfer the funds to foreign countries, registered foreign issuers can go to the open bank with their registration certificate to complete capital transfer formalities. To deposit and use the funds in China, they should comply with existing regulations of direct investment, cross-border fund raising, etc. (Source: Website of the People’s Bank of China)

5.Circular Notice on Publishing the Foreign Exchange Transaction Rules for Payment Service Providers

Promulgated by the State Administration of Foreign Exchange

Document number: H.F. (2019) No.13

Promulgation date: 29 April 2019

Implementation date: 29 April 2019                                

The Notice explicitly states that payment service providers can do foreign exchange transactions such as cross-border purchases, overseas study or travel for individuals at home to meet their needs of legal use of foreign currency. Payment service providers can provide small, fast and convenient electronic payment services under the current account through bank upon presentation of electronic transaction information to facilitate payment and settlement in cross-border e-commerce. (Source: Website of the State Administration of Foreign Exchange)

6.Circular Notice on Adjusting High Temperature Allowance Standards of Shanghai

Promulgated by the Human Resources and Social Security Bureau of Shanghai

Document number: H.R.S.G. (2019) No.19

Promulgation date: 17 May 2019

Implementation date: 1 June 2019                               

As from 1 June 2019, the monthly high temperature allowance in Shanghai increases from RMB 200 to RMB 300. From June to September every year, companies that have employees work outdoors or cannot take effective measures to keep workplace temperature below 33℃ (not including 33℃) should pay the employees high temperature allowances. In special cases, companies that find it difficult to decide the nature of the employees’ workplace should make reasonable payment rules through collective consultation and take other factors into account. (Source: Website of the Human Resources and Social Security Bureau of Shanghai)


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