Today I would like to address the procedures regarding the establishment of a foreign-invested enterprise ( the “FIE”) in China.
In order to set up a FIE, a foreign investor should follow the general steps as follows:
First, the foreign investor should make application with the Administration for Industry and Commerce (AIC) to reserve a company name for use by the to-be-formed FIE;
Secondly, after obtaining an approval from AIC for the company name reservation, the foreign investor should make application with the local counterpart of Ministry of Commerce(the “COFCOM”) for the establishment of FIE. Please note that if the business of an FIE falls into certain business sectors (such as retail of pharmaceuticals) ; approval of the government agency in charge of such specific sector will also be required, which should be obtained prior to this step;
Thirdly, after obtaining an approval from COFCOM, the foreign investor should carry out AIC registration;
Last, after registration with AIC, in order for a FIE to become fully operational, certain post-formation registrations must be completed, including (i) tax registration, (ii) bank account opening, (iii) labor security registration, (iv) Organization Code registration and (v) statistics registration and so on.
The foregoing procedure will take 3 to 7 months before a FIE is formed and become fully operational, provided all documents are ready and accepted by the authority.
By Adam Li