According to the Law of People’s Republic of China on Chinese-Foreign Equity Joint Ventures, the Law of People’s Republic of China on Chinese-Foreign Contractual Joint Ventures, the Law of People’s Republic of China on Foreign-capital Enterprises, and their implemental rules and related regulations, foreign companies, enterprises and other economic organizations or individuals (hereinafter referred to as foreign investors) are allowed to invest and set up foreign-invested enterprises in China in the forms of Chinese-foreign equity joint ventures, contractual joint ventures or wholly foreign-owned enterprises.

The enterprises shall identity their investment intention based on the Catalogue for the Guidance of Foreign Investment Industries (hereinafter referred to as the Catalogue). Upon the decision-making, foreign enterprises (except the Wholly-Foreign Owned Enterprises) shall sign an investment intention agreement, formulate the contracts, the regulations (regulations only for Wholly-Foreign Owned Enterprises) and the feasibility studies with their Chinese counterparts.

Before submitting the application for examination and approval to the local authority for foreign economics and trade, the name of the company needs to be filed for record to the industrial & commercial administration for the pre-check.

Investors shall apply for the enterprises to the related authorities at district or county level or to Shanghai Municipal Foreign Investment Commission through its Chinese partners according to the total investment and the nature of the project. Wholly-Foreign Owned Enterprises shall apply for the approval to the same authorities through the intermediary organizations.

The enterprise shall go to the industrial and commercial administration for registration and filing for record with the approval and the Certificate for approval for Foreign-invested Enterprises. Then, after the business license is obtained, the enterprise is officially established. With the business license, the enterprise shall go to Shanghai Public Security Bureau for engraving a seal and then it shall go through the formalities like the registration at the customs, opening a bank account and the application for the tax registration and etc.