The Ministry of Commerce issued on April 2004, Administrative Measures on Foreign Investment in Commercial Fields and issued, on 31 December 2004, Administrative Measures on Commercial Franchise Operation. It is defined that from 11 December 2004, foreign companies, enterprises and other economic organizations or individuals (hereinafter referred to as foreign investors) are allowed to set up wholly foreign-invested commercial enterprises in China.

Foreign-invested commercial enterprises referred to as foreign-invested enterprises engaged in commission agent, wholesale, retail and franchise operation.