China seeks comments on regs governing three types of entities that can do business in free trade zone.
In 2013 to much fanfare the Chinese government announced its establishment of a new “Free Trade Zone” (FTZ) in a portion of Shanghai. The purpose of the FTZ, along with others scattered about the country, is to provide a testing ground for regulatory overhaul that brings Chinese business dealings more in line with modern international standards.
With regard to the FTZ, the Chinese Ministries of Finance, Taxation and Commerce continue to issue reforms and guidance on how business in this zone is expected to be conducted. Their goals appear to be noble and sincere in that they want to facilitate a more robust and streamlined environment. However, this is new territory for China and the pace often is slow or the steps taken disappointing.
However, in a positive twist, the Ministry of Commerce has announced that it would like to receive comments on regulations governing three types of entities doing business in the zone, “wholly foreign-owned enterprises, Chinese-foreign owned equity joint ventures, and Chinese-foreign contractual joint ventures.” The Shanghai American Chamber of Commerce has issued a notice to its members of this request and is also considering the option of coordinated response representing its members. See their announcement below:
The Ministry of Commerce (MOFCOM) is soliciting comments for three laws pertaining to foreign investment – Wholly Foreign-Owned Enterprises; Sino-Foreign Equity Joint Ventures; and Sino-Foreign Contractual Joint Ventures. MOFCOM has not indicated a deadline for submitting comments, but all comments should be sent to: [email protected].
AmCham Shanghai is currently evaluating whether to submit comments on behalf of its members and welcomes your feedback. To determine if there is sufficient company input to comment, we request that interested companies send their comments and recommended changes, in English and Chinese, to Trevor Clark by Friday, January 10, 2014. Should your company decide to submit comments directly to MOFCOM, we would appreciate you sending us a copy as well.
Here are links to the announcement and revised foreign investment laws (only in Chinese):
If your company currently does business in the Shanghai FTZ, or has an interest in doing so, this is a good opportunity to make your voice heard as China seeks to continue its deregulatory trajectory.