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Trial Measures for commercial enterprises with foreign investment

China
07/03/2000
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The Trial Measures came into effect on 15 June 1999 and have the potential to allow foreign investors to engage in wholesale business for the first time since China was opened up to foreign investment in 1979. While foreign investment projects in the commercial retail and wholesale sectors will continue to be classified within the "restricted" category, once approval for the project has been granted (which will be given on a case by case basis) the Trial Measures provide much greater flexibility for the operation of the project than was previously the case.

As well as allowing foreigners to engage in wholesale business for the first time, the Trial Measures extend the permitted location of such projects and transfer the responsibility for approval from the Commercial Ministry to the State Economic & Trade Commission and the Ministry of Foreign Trade & Economic Cooperation. Foreign parties will be allowed to own 51% of the project (providing the venture proposes to buy a large amount of domestic products through the foreign investor's worldwide network) and the term of operation of the project can be extended from 30 to 40 years. As a result of the change in the authority responsible for such projects, the application procedure has also been amended.

Aili Zhao, +86 10 6590 0389, [email protected]

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