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Investment Procedures

PROCEDURES FOR THE ESTABLISHMENT OF FOREIGN INVESTMENT ENTERPRISE

1.Setting up the Project

    For equity and contractual joint ventures, Letter of Intent for Equity and Contractual Joint Ventures is to be filed out by the Chinese party; for wholly foreign invested enterprises, Letter of Intent for Foreign Invested Enterprises to be filled out by the coordinating party in China. These two forms are to be submitted for review and approval by the administrative district concerned, the town foreign economic relations office or its competent authorities, the fire protection department, and Dongguan foreign Economic Relations and Trade Commission. At the same time, application shall be made to the Industrial and Commercial Bureau for the registration of the name of the enterprise, If the investment is over three million Us dollars, it should be jointly approved by the Dongguan Plan Commission and the Dongguan Foreign Economic Relations and Trade Commission. Projects of technical innovation must be approved by the Dongguan Economic Committee. In the terms of the wholly owned foreign investment, if the investor set up the factory building by itself, it must submit a request for a land permit to the Land department and be approved by Dongguan Foreign Economic Relations and Trade Commission. If the project is considered to be a pollution-producing project, the party must apply for a certificate from the Environmental Protection Department. In addition, it must have pollution protection facilities in accordance with the relevant rules, and be approved by Dongguan Foreign Economic Relation and Trade Commission.

2.Approval of Contracts and Articles

    After both parties have signed the contract, the relevant documents are to be submitted to Dongguan Foreign Economic Relations and Trade Commission for review and approval. Except for those projects that should be sent to the provincial or the central government department of foreign economic relations and trade for review and approval, projects with complete documents submitted shall get approval within 7 working days from the Dongguan Foreign Economic Relations and Trade Commission. (The central government provides that the approval of equity joint ventures and wholly foreign invested enterprises shall be made within 90 days, and that of contractual joint ventures shall be made within 45 days.)

    The documents shall include the following:

  1. Letter of Intent for Equity and Contractual Joint Ventures or Letter of Intent for wholly foreign Invested Enterprises.
  2. Detailed report drafted by the competent authorities.
  3. Signed project documents
    a) For equity or contractual joint ventures--contract, articles of association, feasibility study report.
    b) For wholly foreign invested enterprise--articles of association, feasibility study report, application form, contract with the coordinating party in China.
  4. Plant or Land-Use Permit.
  5. Registration form of the name of the enterprise.
  6. List of names of the Board Directors of the said enterprises.
  7. Business License of the Chinese Party. (Photocopy)
  8. Credit Standing Certificate of the Chinese Party furnished by an authorized bank.
  9. Registration Certificate of the foreign party issued by its home country. (Photocopy)
  10. Business License of the foreign party issued by its home country. (Photocopy)
  11. Credit Standing Certificate of the foreign party furnished by an authorized bank.
  12. Certificates of identity of both parties¡¯ legal representatives. (Photocopy)

3.Obtaining the Required Instruments of Ratification

    Dongguan Foreign Economic Relations and Trade Commission will issue the instrument of ratification on the same day of approval.

4.Applying for Confirmation Certificate

    Projects complying with the conditions of the tax exemption for imported equipments shall apply to the Provincial Economic Committee or the Provincial Plan Commission or the Provincial Foreign Economic Relations and trade Commission for the Confirmation Certificate of the Foreign and Domestic Investment Encouraged by the State to Develop. The application documents include the following:

  1. Confirmation Application Form of the foreign Investment Project Encouraged by the State to Develop.
  2. Ratification of the contractual project or of the Articles of Association in the case of the wholly foreign enterprise.
  3. Contract of the project or the Articles of Association of the wholly foreign enterprise. (Photocopy)
  4. Ratification Certificate and Business License. (Photocopy)
  5. A detailed list of imported machinery and equipment.
  6. Description of the business scale of the foreign investment enterprise.

5.Registration with the Industrial and Commercial Administration

    After the ratification of the establishment, the project shall be registered with and apply for Business License to the Dongguan Industrial and Commercial Administration Bureau within 30 days. Projects with complete documents shall be registered and Business License be issued within 3 working days. (The central government provides that the registration shall be completed within 30 days.) The documents needed for registration are similar to those for approval of the project except for the new certificate approval and the instrument of ratification.

6. Applying for the Legal representative Code

    The written approval and instrument of ratification of the project shall be submitted to Dongguan Technology Supervisory Bureau to apply for the Legal Representative Code. Other documents for the application include:

  1. Written approval and certificate of ratification of the project.
  2. Business License.
  3. ID cards of the legal representatives.

7. Foreign Exchange Registration and Opening an Account

    Within 45 days after obtaining business License, the enterprise shall register with the Foreign Exchange Administration Bureau and then open a foreign exchange account with a bank. The document needed include:

  1. Written approval and certificate of ratification of the project.
  2. Business License.
  3. Signed documents of the project.
  4. Code of the legal representatives.

8. Registration with the tax Bureau

     Within 30 days after registration with the Industrial and Commercial Administration Bureau, the enterprise shall register with the township Tax bureau or the branch of the Dongguan Tax Bureau. The documents needed include:

  1. Written approval and certificate of ratification of the project.
  2. Business License. (Photocopy)
  3. Signed documents of the project.
  4. Code of the legal representatives.
  5. ID cards of the legal representatives. (Photocopy)

9. Registration with the Customs

    The enterprise must register with the Customs within half a year after it was ratified for establishment. The documents needed for registration include:

  1. Written approval of the project
  2. Certificate of Ratification. (Photocopy)
  3. Signed documents of the project.
  4. Business License. (Photocopy)
  5. Certificate of Confirmation of the project.


PROCEDURES FOR THE ESTABLISHMENT OF THE PROCESSING, ASSEMBLING, MANUFACTURING AND COMPENSATION TRADE BUSINESS

1. Setting up the Project

    The Chinese party fills out the form of Intent for Inward Processing and Assembling. The form is then submitted to the relevant department of the administrative district, finally to the Township Foreign Economic Relations and Trade Office for review and approval.

2. Signing Contract and submitting Documents for Approval

    Both the Chinese party and foreign party sign the Inward Processing and assembling Agreement at the Township Inward Processing and Assembling Service Company, and then submit all the documents to the Township foreign Economic Relations and Trade Office for review and approval. The Township Foreign Economic Relations and Trade Office shall complete its review and approval, within one working day. The documents needed for review and approval include:

  1. Application form for inward processing and assembling.
  2. Ratified form of Intent for Inward Processing and Assembling.
  3. Credit Standing Certificate of the foreign party furnished by an authorized bank.
  4. Business License of the foreign party issued by its home country. (Photocopy)
  5. ID cards of the legal representatives of the foreign party.

3. Registration with the Industrial and Commercial Administration Bureau.

4. Applying for the Code of the Enterprise.

5. Registration with the Tax Bureau.

6. Opening an Account with a Bank.

7. Registration with the Customs.