RESOLUTION OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS PROVIDING AN IMPROVED INTERPRETATION OF THE LAW
INCOME TAX LAW FOR FOREIGN ENTERPRISES
| Category | TAXATION | Organ of Promulgation | The National People’s Congress | Status of Effect | Invalidated |
| Date of Promulgation | 1981-12-13 | Effective Date | 1982-01-01 | Date of Invalidation | 1991-07-01 |
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Income Tax Law of the People’s Republic of China for Foreign Enterprises |
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(Adopted at the Fourth Session of the Fifth National People’s Congress and
promulgated by Order No. 13 of the Chairman of the Standing Committee of the
National People’s Congress on December 13, 1981, and effective as of January
1, 1982) (Editor’s Note: This Law has been annulled by Income Tax Law of the
People’s Republic of China for Enterprises with Foreign Investment and Foreign
Enterprises promulgated on April 9, 1991 and effective as of July 1, 1991)
Article 1 Income tax shall be paid in accordance with the provisions of
this Law by foreign enterprises on their income derived from production and
business operations and other sources in the People’s Republic of China.
“Foreign enterprises” mentioned in this Law refers, with the exception of
those for whom separate provisions are stipulated in Article 11, to foreign
companies, enterprises and other economic organizations that have
establishments within the territory of the People’s Republic of China engaged
in independent business operations or in cooperative production or cooperative
business operations with Chinese enterprises.
Article 2 The taxable income of a foreign enterprise shall be the amount
remaining from its gross income in a tax year after the costs, expenses and
losses have been deducted.
Article 3 The income tax on foreign enterprises shall be computed at
progressive rates on amounts in excess of specified amounts of taxable income;
the rates are as follows:
Range of Income
Tax Rate (%)
Annual income not exceeding
250,000 yuan 20
That part of annual income from
250,000 to 500,000 yuan
25
That part of annual income from
500,001 to 750,000 yuan
30
That part of annual income from
750,001 to 1,000,000 yuan
35
That part of annual income above
1,000,000 yuan 40
Article 4 When paying the income tax in accordance with the provisions
of the preceding Article, a foreign enterprise shall also pay a local income
tax of ten percent of taxable income. In cases where a foreign enterprise with
small-scale production and low profits warrants a reduction in or exemption
from the local income tax, the decision shall be made by the people’s
government of the province, autonomous region, or municipality directly under
the Central Government in which the enterprise is located.
Article 5 A foreign enterprise scheduled to operate for a period of ten
years or more in farming, foresty, animal husbandry or other low-profit
operations may, upon approval by the tax authorities of an application filed
by the enterprise, be exempted from income tax in the first profit-making year
and allowed a 50 percent reduction of income tax in the second and third years.
With the approval of the Ministry of Finance, a 15 to 30 percent reduction
in income tax may be allowed for another ten years following the expiration of
the period for exemption and reductions prescribed in the preceding paragraph.
Article 6 Losses incurred by a foreign enterprise in a tax year may be
made up with a corresponding amount drawn from the next year’s income. Should
the income in the subsequent tax year be insufficient to make up for the said
losses, the balance may be made up with further deductions from its income
year by year, but within a period not exceeding five years.
Article 7 Income tax on foreign enterprises shall be computed on an
annual basis and paid in advance in quarterly instalments. Such advance
payments shall be made within 15 days after the end of each quarter, and the
final settlement shall be made within five months after the end of each tax
year, with a refund for any overpayment or a supplementary payment for any
deficiency.
Article 8 A foreign enterprise shall file its income tax returns in
respect of advance payments with the local tax authorities within each period
prescribed for advance payments; and it shall file an annual income tax
return, together with the statement of final accounts, within four months
after the end of the tax year.
Article 9 A report on the financial and accounting systems of a foreign
enterprise shall be submitted to the local tax authorities for reference.
If the procedures for financial management and accounting of a foreign
enterprise contradict the provisions of the tax laws, tax payments shall be
assessed in accordance with the provisions of the tax laws.
Article 10 When a foreign enterprise starts or ceases to operate in
accordance with the law, it shall present the relevant certificates to the
local tax authorities and go through tax registration.
Article 11 Foreign companies, enterprises and other economic
organizations that have no establishments in China, but have gained dividend,
interest, rental, royalty and other income from sources in China, shall pay an
income tax of 20 percent on such income. Such tax shall be withheld by the
paying unit from the amount of each payment.
For the payment of income tax in accordance with the provisions of the
preceding paragraph, the foreign company, enterprise or other economic
organization which earns the income shall be the taxpayer, and the paying unit
shall be the withholding agent. The tax withheld from each payment by the
withholding agent shall be turned over to the State Treasury and the
withholding income tax return submitted to the tax authorities within five
days.
Income from interest on loans made to the Chinese Government or Chinese
state banks by international financial organizations shall be exempted from
income tax. Income from interest on loans made at a preferential interest rate
by foreign banks to Chinese state banks shall also be exempted from income tax.
Foreign banks shall pay tax on their income from interest on deposits in
Chinese state banks and on loans made at a normal interest rate to Chinese
state banks. However, an exemption from income tax may be granted reciprocally
to those foreign banks in whose countries income from interest on
deposits of, and loans made by, Chinese state banks is exempt from income tax.
Article 12 The tax authorities shall have the right to inspect the
financial, accounting and tax affairs of a foreign enterprise, and the right
to inspect the withholding of tax of a withholding agent and its payment of
the withheld tax into the State Treasury. Foreign enterprises and withholding
agents must make reports according to the facts and provide relevant
information; they may not refuse to cooperate and may not conceal the facts.
Article 13 The income tax levied on foreign enterprises shall be computed
in terms of Renminbi (RMB). Income in foreign currency shall be taxed on the
equivalent amount converted into Renminbi according to the exchange rate
quoted by the State General Administration of Exchange Control of the People’s
Republic of China.
Article 14 Foreign enterprises and withholding agents must pay taxes
within the prescribed time limit. In case of failure to do so, the tax
authorities, in addition to setting a new time limit for tax payment, shall
impose a surcharge for overdue payment equal to 0.5 percent the overdue tax
for every day in arrears, starting from the first day payment becomes overdue.
Article 15 The tax authorities may, in the light of the circumstances,
impose a fine on a foreign enterprise that has violated the provisions of
Articles 8, 9, 10 or 12 of this Law.
In dealing with a withholding agent who has violated the provisions of
Article 11 of this Law, the tax authorities may, in addition to setting a new
time limit for the payment of the amount of tax that should have been
withheld, impose a fine in the light of the circumstances, up to but not
exceeding 100 percent of the amount of tax that should have been withheld.
In dealing with a foreign enterprise that has evaded or refused to pay
tax, the tax authorities, in addition to pursuing the tax payment, may impose
a fine of up to but not exceeding five times the amount of the tax underpaid
or not paid, in accordance with the seriousness of the case. Cases of gross
violation shall be handled by the local people’s courts in accordance with the
law.
Article 16 In case of a dispute with the tax authorities over tax
payment, a foreign enterprise must pay tax according to the relevant
regulations before applying to higher tax authorities reconsideration. If it
does not accept the decision made after such reconsideration, it may bring a
suit in the local people’s court.
Article 17 When agreements on tax payment have been concluded between
the Government of the People’s Republic of China and foreign governments,
matters concerning tax payment shall be handled in accordance with the
provisions of the respective agreements.
Article 18 Rules for the implementation of this Law shall be formulated
by the Ministry of Finance of the People’s Republic of China.
Article 19 This Law shall go into effect on January 1, 1982.
CIRCULAR OF THE STATE COUNCIL FOR APPROVING AND TRANSMITTING THE REPORT SUBMITTED BY THE STATE PLANNING COMMISSION, THE STATE IMPORT AND EXPORT COMMISSION AND OTHER DEPARTMENTS ON IMPROVING ADMINISTRATION OF FOREIGN EXCHANGE CERTIFICATES
| Category | BANKING | Organ of Promulgation | The State Council | Status of Effect | In Force |
| Date of Promulgation | 1981-06-12 | Effective Date | 1981-07-15 |
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Circular of the State Council for Approving and Transmitting the Report Submitted by the State Planning Commission, the State Import |
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Circular
REPORTS ON IMPROVING THE ADMINISTRATION OF FOREIGN EXCHANGE CERTIFICATES
(June 12, 1981)
Circular
The State Council has approved the “Report on Improving the Administration
of Foreign Exchange Certificates “submitted by the State Planning Commission,
the State Import and Export Commission and other departments and hereby
transmits it to you and requests you to organize the departments concerned for
the earnest implementation thereof.
The work to issue foreign exchange certificates (hereinafter referred to
as FECs) has been fruitful and has been done with good intention. But owing to
lack of experience, errors and shortcoming have surfaced and new problems have
arisen. The State Council has therefore enjoined the departments concerned to
form a special group which shall undertake serious investigations and study,
widely solicit opinions, carry out repeated comparisons and analyses, and
explore ways to improve it or work out a better solution. As this work is very
complicated, its good performance or otherwise will have a direct effect on
the reputation of the country domestically and internationally. It must
therefore be treated seriously and cautiously. Therefore, before any new
solutions are available, the existing measures with respect to FECs shall
continue to be implemented. All the provinces, municipalities directly under
the Central Government, and autonomous regions must strengthen leadership over
the work and all departments concerned must give full cooperation. Great
efforts should be exerted to do a good job of the issuance of FECs, the
withdrawal of FECs from circulation, the circulation of FECs, and the
administration of FECs, as well as of the ideological education so that the
adverse effects of the unfavorable factors will be minimized.
REPORTS ON IMPROVING THE ADMINISTRATION OF FOREIGN EXCHANGE CERTIFICATES
With a view to eliminating the circulation of foreign currencies in the
domestic market, preventing the illegal procurement of foreign exchange and
purchase of goods in short supply, and facilitating the calculation of the
percentage of foreign exchange retained by units which earn foreign exchange,
foreign exchange certificates denominated in Renminbi (hereinafter referred
to as FECs) have been issued since April 1, 1980. As the exchange of foreign
currencies and the administration thereof is very complicated and the existing
measures have been implemented for one year and two months, in order to solve
the problem properly and satisfactorily, it is imperative to undertake
investigation and study and, on the basis of this, have it widely discussed
and repeatedly compared and analysed, so as to work out better solutions to be
submitted to the State Council for examination and approval. We are of the
opinion – and this is also the opinion shared by other departments as well as
by the four provinces or municipalities directly under the Central Government,
namely Beijing, Shanghai, Guangdong, and Fujian – that before any new and
better solutions are found, it is necessary to reaffirm the legality and
solemnity of FECs and, in the light of the existing measures, improve the
administration, stop up the loopholes, overcome the problems that have arisen
obviously as a result of poor follow-up work, and do everything possible to
minimize the adverse effects of the unfavourable factors in the circulation of
FECs. We would, therefore, like to recommend the following measures:
1. Improving the administration with respect to FECs. We would suggest
that the people’s governments of the various provinces, municipalities
directly under the Central Government, and autonomous regions should make a
serious inspection over the work with respect to the issue of FECs, set up an
institutional framework for the regular inspection thereof, and enjoin the
relevant departments under their jurisdiction to exercise administration, to
discover problems and to deal with them promptly, in strict accordance with
the prescribed measures, i.e. , “The Interim Measures of the Bank of China
for the Administration of FECs” and other relevant provisions.
2. Ensuring the equivalence in value of FECs to Renminbi in terms of
prices. In supplying commodities to foreigners, all units that are designated
to accept FECs, such as friendship stores, foreign trade centers, and stores
at hotels, restaurants, dining-hall, airports, train stations, and wharves,
shall price their goods according to the prices approved by the departments
for the control of commodity prices. The price thus set for a particular
item shall in principle be in line with the prevailing retail prices on the
market. Prices shall be fixed in accordance with the qualities of the goods,
i.e., higher prices for superer qualities and the same price for the same
quality. It is not allowed to reduce the sales prices without authorization
just for the purpose of obtaining more FECs. In the two provinces of Guangdong
and Fujian, which are adjacent to Hong Kong and Macao, if it is really
necessary to price some particular goods at levels lower than the prevailing
prices on the retail market, the difference in price shall not exceed 20
percent (which shall be expressed by adding on the side of the price tags the
remark “A temporary 20 percent discount”). At present in the two provinces of
Guangdong and Fujian, with respect to some goods supplied to foreigners, if
the difference in prices is relatively too great and the range of the
varieties involved is too wide, it is imperative to conduct reexamination and
exercise strict control thereon and the measure shall be subject to the
approval of the respective provincial people’s governments for their
enforcement, so as to improve the administration thereof. Stricter control
shall be exercised in other regions and the practice of having two different
prices, shall, in principle, not be permitted. Friendship stores, foreign
trade centers, foreign vessels supplying companies, and Overseas Chinese
stores should co-ordinate their business operations and do a good job of their
work in accordance with their respective business objectives. At the same
time, it is imperative to increase Customs duties for dutiable luggage and
articles carried into China by entry passengers and for some imported goods,
by adjusting the import duty rates of such articles as TV sets and recorders
so that their prices after duty shall only be slightly lower than their sales
prices in the domestic markets (the difference between them shall not exceed
20 percent.), thus ensuring the enforcement of the principle of one price, so
that profiteering in FECs will no longer be so attractive. The specific plan
for the adjustments shall be worked out by the General Administration of
Customs in conjunction with the State Import & Export Commission, the Ministry
of Finance, the Ministry of Foreign Trade, and the Office for Overseas Chinese
Affairs upon careful studies and shall be submitted to the State Council for
approval before they are issued and effected.
3. Improving the system to withdraw FECs from circulation. People’s Banks
and Agricultural Banks in various localities shall assit the Bank of China in
handling the business operations in withdrawing FECs from circulation. All
units that have receipts in FECs shall apply to the Bank of China in their
localities or the People’s Banks or Agricultural Banks nearby for verifying
the quota of reserves in FECs to be used as small change to customers. With
the exception of this, the amount that exceeds the quota shall be treated in
the same way as cash in Renminbi and turned in to the bank on the very day of
receipt so that it will be withdrawn from circulation or deposited, and it is
not allowed to retain it or spend it. No units that are not designated to
accept FECs shall be granted any percentage of retained foreign exchange.
Individuals who possess FECs shall go to the bank to have them changed to
Renminbi and shall not be permitted to use FECs for shopping. The Bank of
China should enlarge its personnel and set up more branches for foreign
currency exchange. It may also entrust the People’s Banks, Agricultural Banks
or units which meet the required conditions for accepting FECs to set up
agencies for such exchange to convenience foreign guests and overseas
Chinese. The specific rules for the implementation of the above shall be
formulated and promulgated by the People’s Bank of China, the Bank of China
and the State Administration for Foreign Exchange Control.
4. Limiting the scope of the use of FECs. All units that are or are not
designated to accept FECs shall act in strict accordance with the regulatory
system for the administration of FECs. Production departments and commercial
departments shall regard it as one of their important tasks to supply goods to
departments that are responsible for supplying goods to customers from abroad,
and ensure that their demands are most possibly satisfied. With respect to
commodities supplied by the supplier departments to those departments that are
responsible for supplying commodities to customers from abroad except those
commodities that are handled by foreign trade departments for export purposes
are payable by FECs, no commodities for domestic sales may be priced or
settled in FECs. No transactions in FECs or the exchange thereof, or the
payment in FECs for purchase of goods between units or departments shall be
permitted. The settlement of payment for goods priced in FECs shall be
effected through the banks. With respect to goods for domestic sales and yet
are priced in FECs, the banks shall refuse to handle the transfer of accounts
or the settlement related to the transactions thereof.
5. Controlling the range of categories of people who may use FECs. FECs
may only be used by foreign guests, overseas Chinese, and compatriots from
Hong Kong, Macao and Taiwan who have entered the mainland of China and by
domestic residents (including seamen working on ocean-going vessels) holding a
bank certificate. Departments supplying commodities to tourists should
exercise strict control over the people to whom the commodities are supplied.
Staff members in these departments shall be strictly prohibited from taking
advantage of their positions or jobs to illegally exchange Renminbi for FECs.
Domestic residents shall be strictly prohibited from illegitimately buying up
commodities (The stipulation that, just on the strength of a letter of
introduction from the unit where one works, one may buy commodities from
stores or special counters of stores that are designated to accept FECs shall
be abolished.). With respect to certain commodities that are in short supply,
a limited quantity of purchase should be prescribed.If anyone is found to have
illegitimately bought up commodities that are in short supply, investigations
shall be made into the supply source(s) of and the persons involved shall be
dealt with in light of the seriousness of the case. (The penalties may, for
example, include compulsory exchange of FECs for Renminbi, imposition of a
fine, or confiscation of the illegitimately purchased commodities.)
6. Improving the administration of the market. We would suggest that
administrative department for industry and commerce at all levels shall, in
full co-operation with such relevant departments as the public security
bureaus, the departments for control of commodity prices, the Customs and the
branch offices of the State Administration for foreign Exchange Control,
inspect regularly the supply prices of the stores and how FECs are being used,
resolutely ban black marketeering for FECs, and crack down on profiteering in
FECs. Offenders shall be given economic and legal sanctions (such as imposing
a fine on them, confiscating their illegal gains, suspending their
qualification to retain a certain amount of foreign exchange, or deducting a
percentage from their retained foreign exchange).
It is proposed that the six measures mentioned above be effective as of
July 15, 1981. If they are practicable we would request your approval and
transmission thereof to all the localities and relevant departments for study
and implementation.
INTERIM PROVISIONS OF THE SPECIAL ECONOMIC ZONES IN GUANGDONG PROVINCE FOR THE CONTROL OF PERSONNEL ENTERING AND LEAVING CHINAA
CIRCULAR OF THE STATE COUNCIL CONCERNING THE CUTTING DOWN THE STATE’S FOREIGN EXCHANGE EXPENDITURE IN THE INTERNATIONAL AIR TRANSPORT OF PASSENGERS, CARGOES AND MAIL
| Category | CIVIL AVIATION | Organ of Promulgation | The State Council | Status of Effect | In Force |
| Date of Promulgation | 1981-07-24 | Effective Date | 1981-07-24 |
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Circular of the State Council Concerning the Cutting Down the State’s Foreign Exchange Expenditure in the International Air Transport |
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(July 24, 1981)
The following Circular is hereby issued with reference to the general
practice of various countries in the world for the purpose of safeguarding
the State’s interests, cutting down the State’s foreign exchange expenditure
and developing China’s civil aviation undertakings:
All Chinese and foreigners who are travelling at the expense of the
relevant units of China (including private individuals who are going abroad
with foreign exchange paid by the Bank of China) on international routes where
the Civil Aviation Administration of China (CAAC) operates its flights
(whether they are going abroad, or returning to China, or travelling between
two localities abroad) shall take CAAC flights; cargoes that are to be
transported by air shall also be carried by the CAAC if the Transport expense
is to be covered by the State; and, when the time limit for delivery is the
same, the CAAC shall have the priority of carrying airmail. The CAAC shall
grant appropriate preferential treatment at its discretion. Under special
circumstances, where emergencies render it impossible to wait until CAAC
flights are available, the carrying may be performed by foreign airlines
through the arrangement by the CAAC; the CAAC shall issue a certificate
to facilitate the reimbursement of the expenses thus incurred. Violators of
the aforesaid provisions may not have their expenses reimbursed by their
respective finance departments.
Various regions and departments are requested to earnestly implement the
aforesaid provisions and the Civil Aviation Administration of China and the
Ministry of Finance shall supervise the implementation thereof.
MARRIAGE LAW
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CONTENTS
CHAPTER I GENERAL PROVISIONS
CHAPTER II MARRIAGE CONTRACT
CHAPTER III FAMILY RELATIONS
CHAPTER IV DIVORCE
CHAPTER V SUPPLEMENTARY PROVISIONS
CHAPTER I GENERAL PROVISIONS Article 1. This Law is the fundamental code governing marriage and family relations. Article 2. A marriage system based on the free choice of partners, on monogamy and on equality between man and woman shall be applied. The lawful rights and interests of women, children and old people shall be protected. Family planning shall be practised. Article 3. Marriage upon arbitrary decision by any third party, mercenary marriage and any other acts of interference in the
CHAPTER II MARRIAGE CONTRACTS Article 4. Marriage must be based upon the complete willingness of both man and woman. Neither party may use compulsion on the other party, Article 5. No marriage may be contracted before the man has reached 22 years of age and the woman 20 years of age. Late marriage Article 6. No marriage may be contracted under any of the following circumstances: (1) if the man and the woman are lineal relatives by blood, or collateral relatives by blood up to the third degree of (2) if the man or the woman is suffering from leprosy, a cure not having been effected, or from any other disease Article 7. Both the man and the woman desiring to contract a marriage shall register in person with the marriage registration office. Article 8. After a marriage has been registered, the woman may become a member of the man’s family or vice versa, depending on the agreed
CHAPTER III FAMILY RELATIONS Article 9. Husband and wife shall have equal status in the family. Article 10. Both husband and wife shall have the right to use his or her own surname and given name. Article 11. Both husband and wife shall have the freedom to engage in production and other work, to study and to participate Article 12. Both husband and wife shall have the duty to practise family planning. Article 13. The property acquired by the husband and the wife during the period in which they are under contract of marriage shall be Husband and wife shall enjoy equal rights in the disposition of their jointly possessed property. Article 14. Husband and wife shall have the duty to maintain each other. If one party fails to perform this duty, the party in need of maintenance shall have the right to demand maintenance Article 15. Parents shall have the duty to bring up and educate their children; children shall have the duty to support and assist If parents fail to perform their duty, children who are minors or are not capable of living on their own shall have the If children fail to perform their duty, parents who are unable to work or have difficulty in providing for themselves Infanticide by drowning and any other acts causing serious harm to infants shall be prohibited. Article 16. Children may adopt either their father’s or their mother’s surname. Article 17. Parents shall have the right and duty to subject their children who are minors to discipline and to protect them. If Article 18. Husband and wife shall have the right to inherit each other’s property. Parents and children shall have the right to inherit each other’s property. Article 19. Children born out of wedlock shall enjoy the same rights as children born in wedlock. No one may harm or discriminate against The father of a child born out of wedlock shall bear part or the whole of the child’s living and educational expenses Article 20. The state shall protect lawful adoption. The relevant provisions of this Law governing the relationship between The rights and duties in the relationship between a foster-child and his natural parents shall terminate with the establishment Article 21. Maltreatment and discrimination shall not be allowed between step-parents and step-children. The relevant provisions of this Law governing the relationship between parents and children shall apply to Article 22. Grandparents who can afford it shall have the duty to bring up their grandchildren who are minors and whose parents Article 23. Elder brothers or elder sisters who can afford it shall have the duty to bring up their younger brothers or sisters who
CHAPTER IV DIVORCE Article 24. Divorce shall be granted if husband and wife both desire it. Both parties shall apply to the marriage registration Article 25. If one party alone desires a divorce, the organization concerned may carry out mediation or the party may appeal In dealing with a divorce case, the people’s court should carry out mediation; divorce shall be granted if Article 26. If the spouse of a soldier in active service desires a divorce, the soldier’s consent must be obtained. Article 27. A husband may not apply for a divorce when his wife is pregnant or within one year after the birth of the child. This Article 28. If, after divorce, both parties desire to resume their husband-and-wife relationship, they shall apply for Article 29. The relationship between parents and children shall not come to an end with the parents divorce. After divorce, After divorce, both parents shall still have the right and duty to bring up and educate their children. In principle, the mother shall have the custody of a breast-fed infant after divorce. If a dispute arises between the Article 30. If, after divorce, one parent has been given custody of a child, the other parent shall bear part or the whole The agreement or court judgment on the payment of a child’s living and educational expenses shall not prevent Article 31. At the time of divorce, the husband and the wife shall seek agreement regarding the disposition of their jointly possessed Article 32. At the time of divorce, debts incurred jointly by the husband and the wife during their married life shall be paid out Article 33. If, at the time of divorce, one party has difficulty in supporting himself or herself, the other party shall render
CHAPTER V SUPPLEMENTARY PROVISIONS Article 34. Persons violating this Law shall be subject to administrative or legal sanctions in accordance with the Article 35. In cases where a person refuses to abide by the judgments or rulings on costs of upbringing, maintenance or support payments, Article 36. The people’s congresses of national autonomous areas and their standing committees may formulate certain adaptations Article 37. This Law shall come into force as of January 1, 1981. The Marriage Law of the People’s Republic of China promulgated on May 1, 1950 shall be invalidated as of the day this
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A CLARIFICATION OF THE COMMISSION FOR THE ADMINISTRATION OF FOREIGN INVESTMENTS ON SEVERAL QUESTIONS ON THE IMPLEMENTATION OF INTERIM PROVISIONS OF THE STATE COUNCIL OF THE PEOPLE’S REPUBLIC OF CHINA ON THE ADMINISTRATION OF RESIDENT REPRESENTATIVE OFFICES OF FOREIGN ENTERPRISES
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The General Office of the State Council Circular of the General Office of the State Council Concerning the Transmission of a Clarification Submitted by the Commission for The clarification submitted by the Commission for the Administration of Foreign Investments on several questions on the implementation The General Office of the State Council August 3, 1981 A Clarification of the Commission for the Administration of Foreign Investments on Several Questions on the Implementation of Interim Since the promulgation of the “Interim Provisions of the State Council of the People’s Republic of China on the Administrative of (1) “Other economic organizations”, as mentioned in Article 1 of the “Interim Provisions”, refer to those organizations which are engaged (2) Article 2 of the “Interim Provisions”, which reads: “Those who have not obtained approval or have not gone through the procedures With respect to those who undertake unauthorized business operations in the capacity of the staff of resident (representative) offices (3) With respect to the certifying documents and relevant materials to be presented by foreign enterprises when applying for permission When a non-profit foreign economic organization applies for permission to set up its resident representative office, it may be exempt (4) “Enterprises outside these lines of business”, as mentioned in Article 4 of the “Interim Provisions”, refer to those trades such With respect to those non-profit foreign economic organizations, which are the counterparts of the China Council for the Promotion With respect to foreign businessmen in the trust and investment trades, their applications for permission to set up resident representative (5) In the event that several foreign enterprises of different trades jointly apply for permission to set up a comprehensive resident (6) Owing to the serious shortage of housing at present, strict control shall be exercised, by the examining and approving organ in accordance The maximum duration of residence, approved on each occasion, shall not exceed 3 years. On the expiration of this prescribed period, If resident representative offices are to be set up in China in accordance with an agreement between the Chinese government and foreign (7) The approving organ, while issuing the certificate of approval to the applying unit, shall notify in writing the General Administration With respect to foreign enterprises in the trust and investment trades which apply for permission to set up their resident representative With respect to those non-profit foreign economic organizations, which are the counterparts of the China Council for the Promotion (8) Article 5 of the “Interim Provisions” reads: “The original approval document shall be turned over in case of failure to register (9) The change of “address”, as mentioned in Article 7 of the “Interim Provisions”, refers to a change effected within the same city. In case that the resident representative office of a foreign enterprise has to change its address at the request of the competent (10) The engagement of working personnel by the resident representative office of a foreign enterprise shall be handled in accordance with (11) Article 4 of “Circular Concerning Registration of Resident Representative Offices of Foreign Enterprises” promulgated by the General (12) In the event that foreign businessmen apply for permission to set up resident representative offices in cities other than Beijing, (13) With the exception of such trades as banking and air transportation, in case that foreign businessmen apply for permission to set (14) If enterprises established and run abroad by overseas Chinese, by compatriots from Hong Kong, Macao and Taiwan, wish to set up resident (15) Should problems arise in the course of the execution of the “Interim Provisions” and of this Clarification, and explanations and solutions |
The General Office of the State Council
1981-08-03
MARRIAGE LAW OF THE PEOPLE’S REPUBLIC OF CHINA
CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL CONCERNING THE OFFICES OF FOREIGN ENTERPRISES
| Category | FOREIGN ECONOMIC RELATIONS AND TECHNOLOGICAL COOPERATION | Organ of Promulgation | The State Council | Status of Effect | In Force |
| Date of Promulgation | 1981-08-03 | Effective Date | 1981-08-03 |
|
Circular of the General Office of the State Council Concerning the |
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Circular
Appendix: A CLARIFICATION OF THE COMMISSION FOR THE ADMINISTRATION OF
Transmission of a Clarification Submitted by the Commission for the
Administration of Foreign Investments on Several Questions on the
Implementation of Interim Provisions of the State Council of the
People’srepublic of China on the Administration of Resident Representative
Offices of Foreign Enterprises
(August 3, 1981)
Circular
The clarification submitted by the Commission for the Administration of
Foreign Investments on several questions on the implementation of “Interim
Provisions of the State Council of the People’s Republic of China Governing
Resident Representative Offices of Foreign Enterprises”, has been approved by
the State Council and is hereby transmitted to you, and you are requested to
implement it accordingly.
Appendix: A CLARIFICATION OF THE COMMISSION FOR THE ADMINISTRATION OF
FOREIGN INVESTMENTS ON SEVERAL QUESTIONS ON THE IMPLEMENTATION OF INTERIM
PROVISIONS OF THE STATE COUNCIL OF THE PEOPLE’S REPUBLIC OF CHINA ON THE
ADMINISTRATION OF RESIDENT REPRESENTATIVE OFFICES OF FOREIGN ENTERPRISES
Since the promulgation of the “Interim Provisions of the State Council of
the People’s Republic of China Governing Resident Representative Offices of
Foreign Enterprises” (hereinafter referred to as the “Interim Provisions”), the
various examining and approving units have, in accordance with the “Interim
Provisions”, examined and approved, the applications filed by foreign
businessmen for the establishment of resident representative offices, the
departments for the administration of industry and commerce have approved their
registration, and the organs of public security have the performed residence
procedures; work in this respect has made very good progress, and the
administrative work concerning the resident representative offices of foreign
enterprises has been strengthened to some extent. However, in the course of
implementing the “Interim Provisions”, there still exist some questions which
need to be defined more sharply or clarified. Now, several questions concerning
the implementation of the “Interim Provisions” are hereby clarified as follows:
(1) “Other economic organizations”, as mentioned in Article 1 of the
“Interim Provisions”, refer to those organizations which are engaged in
economic, trade, technological or finance business activities but are not
called companies or enterprises as such, and which also include such non-profit
economic organizations as the Japanese-Chinese Economic Association, the
Japanese Association for the Promotion of International Trade, the National
Council for American-Chinese Trade Relations, and Council for Canadian-Chinese
Trade Relations.
(2) Article 2 of the “Interim Provisions”, which reads: “Those who have not
obtained approval or have not gone through the procedures for registration
shall not be permitted to undertake business operations of resident offices”,
means that those who have not obtained approval or have not gone through the
procedures for registration shall not be permitted to undertake business
operations in the capacity of the staff of resident (representative) offices,
and neither shall they be permitted to put up any sign at their residences that
represents foreign companies or enterprises.
With respect to those who undertake unauthorized business operations in the
capacity of the staff of resident (representative) offices without going
through the proper approval registration procedures for setting up resident
representative offices, the departments for the administration of industry and
commerce shall notify the persons concerned to close down their resident
offices and to stop their business operations forthwith.
(3) With respect to the certifying documents and relevant materials to be
presented by foreign enterprises when applying for the permission to set up
resident representative offices as provided for in Article 3 of the “Interim
Provisions”, the written application and the vesting instrument must be
presented in the original and the other certifying documents may be presented
in duplicate or photo copies. As regards “the certificates of creditworthiness
issued by a financial institution”, if a foreign businessman has difficulty
providing one, flexibility may be exercised by requiring the foreign
businessman concerned to present certifying documents indicating business
transactions concluded between the foreign businessman and a bank within the
preceding year instead.
When a non-profit foreign economic organization applies for the permission
to set up its resident representative office, it may be exempt from presenting
the certificate of creditworthiness required in Article 3 of the “Interim
Provisions”.
(4) “The other trades”, as mentioned in Article 4 of the “Interim
Provisions”, refer to those trades such as cooperative exploitation of oil and
coal resources and etc. which are beyond the approving authority of the
Ministry of Foreign Trade, the People’s Bank of China, the Ministry of
Communications, and the Civil Aviation Administration of China, and the parties
concerned shall submit their applications to the competent departments
concerned under the State Council for approval in light of the nature of their
businesses.
With respect to those non-profit foreign economic organizations, which are
the counterparts of the China Council for the Promotion of International Trade,
their applications for the permission to set up resident representative
offices shall, for the time being, be submitted to the Ministry of Foreign
Trade for examination and approval. In the course of examination and approval,
the Ministry of Foreign Trade shall consult China Council for the Promotion of
International Trade.
With respect to foreign businessmen in the trust and investment trade,
their applications for the permission to set up resident representative offices
shall, for the time being, be submitted to the People’s Bank of China for
examination and approval. In the course of examination and approval, the
People’s Bank of China shall consult the China International Trust and
Investment Corporation.
(5) In the event that several foreign enterprises of different trades
jointly apply for the permission to set up a comprehensive resident
representative office, they shall submit their application to the Commission
for the Administration of Foreign Investments of the People’s Republic of
China, and the latter shall examine and approve the application in consultation
with the relevant units.
(6) Owing to the serious shortage of housing at present, a strict control
shall be exercised, by the examining and approving organ in accordance with the
specific conditions, over the number of staff of the proposed resident
representative offices of foreign enterprises and over the duration of
residence. An application for the setting up of a resident representative
office shall not be approved if the problem of housing has not been solved. The
maximum duration of residence, approved on each occasion, shall not exceed 3
years. On the expiration of this prescribed period, if it is necessary to have
an extension, the foreign enterprise concerned shall submit anew its
application to the examining and approving organ 3 months before the expiration
of the original prescribed duration of residence. And, after obtaining the
approval, the foreign enterprise concerned shall apply to the department for
the administration of industry and commerce for registration. If resident
representative offices are to be set up in China in accordance with agreement
between the Chinese government and foreign governments, the foreign enterprises
concerned shall go through the procedures for registration in accordance with
the “Interim Provisions”, and the number of staff of the proposed resident
representative office, the duration of residence, the registration fees, etc.,
shall be handled according to the principle of reciprocity.
(7) The approving organ, while issuing the certificate of approval to the
applying unit, shall notify in writing the case to the General Administration
for Industry and Commerce. The departments for the administration of industry
and Commerce shall, after the foreign enterprise concerned has gone through the
registration procedures, notify without delay the case to the State Commission
for the Administration of Foreign Investments, the Ministry of Foreign
Affairs, the Ministry of Public Security, the Customs General Administration,
and the State Tax Bureau under the Ministry of Finance.
With respect to foreign enterprises in the trust and investment trade which
apply for the permission to set up their resident representative offices,
after they have obtained the approval and have gone through the registration
procedures, the department concerned shall at the same time notify the case to
the China International Trust and Investment Corporation.
With respect to those non-profit foreign economic organizations, which are
the counterparts of the China Council for the Promotion of International Trade
and apply for the permission to set up their resident representative offices,
after they have obtained approval and have gone through the registration
procedures, the department concerned shall at the same time notify the case to
the China Council for the Promotion of International Trade.
(8) Article 5 of the “Interim Provisions” reads: “Those who have failed to
go through the procedures for registration within the prescribed time limit,
shall return the original certificate of approval”. An applicant shall go
through the procedures for registration with the department for the
administration of industry and commerce within 30 days from the day he/she has
received the certificate; if he/she has failed to do so within prescribed time
limit, he/she shall be considered to have withdrawn automatically the original
application, and the certificate of approval already issued to him/her shall
become invalid automatically, and he/she shall be required to return the
certificate of approval to the original approving organ.
(9) The change of “the location of resident office”, as mentioned in
Article 7 of the “Interim Provisions”, refers to the change effected within the
same city. However, the change of room number within the same building shall
not be considered as a change of the location of resident office. The resident
representative office concerned is required to notify, without delay, the case
of change of the location of resident office to the local competent department
concerned and also to the department for registration.
In case that the resident representative office of a foreign enterprise has
to change its location at the request of the competent department concerned of China, the foreign enterprise concerned shall be
required to go through the
procedures for the registration of the change without paying any registration
fees.
(10) If the resident representative office of a foreign enterprise wishes
to employ staff members, the case shall be handled in accordance with the
provisions in Document No.48, signed and issued jointly, in 1981, by the
Ministry of Public Security, the Ministry of Foreign Affairs, the General
Administration for Industry and Commerce, the Commission for the Administration
of Imports and Exports, and the Ministry of Foreign Trade; and, in principle,
no individual of a third country or Chinese without regular registered
residence in China shall be hired. However, in special cases, citizens of a
third country or individuals from the areas of Hong Kong and Macao may be
engaged with the approval of the local department of service for foreign
affairs and of the labour department.
(11) Article 4 of “Circular Concerning Registration of Resident
Representative Offices of Foreign Enterprises” promulgated by the General
Administration for Industry and Commerce of the People’s Republic of China on
December 8, 1980, provides: “the resident representative offices, or the
resident representatives, of foreign enterprises approved by the competent
departments of the people’s governments of the province, municipality directly
under the Central Government, and autonomous region” refer to the resident
representative offices of foreign enterprises approved before the promulgation
of the “Interim Provisions” by the State Council on October 30, 1980.
Applications for the setting up of resident representative offices submitted by
foreign enterprises after the promulgation of the “Interim Provisions” shall
be handled in accordance with the “Interim Provisions”.
(12) In the event that foreign businessmen apply for permission to set up
resident representative offices in cities other than Beijing, with the
exception of such trades as banking or air transportation – the applications
shall be submitted directly to the competent departments listed in Article 4 of the “Interim Provisions”, all other trades shall,
in light of the nature of
their respective businesses, apply accordingly to the local bureau of foreign
trade or bureau of communications of the province, municipality directly under
the Central Government, or autonomous region, or to the departments or bureaus
in the localities, which have a direct business relationship with the
ministries, commissions or bureaus under the State Council; and the aforesaid
departments shall, in turn, write their comments on the written applications
and forward same, for examination and approval, to the competent departments
concerned listed in Article 4 of the “Interim Provisions”.
(13) With the exception of such trades as banking and air transportation,
in case that foreign businessmen apply for the permission to set up resident
representative offices in the two provinces of Guangdong and Fujian, their
applications shall be submitted to the provincial governments for examination
and approval. In case that resident representative offices are to be set up in
the Shenzhen, Zhuhai and Xiamen Special Economic Zones, the applications shall
be submitted for examination and approval to the provincial committee for the
administration of special economic zones.
(14) If enterprises established and run abroad by overseas Chinese, by
compatriots from Hong Kong, Macao and Taiwan, wish to set up resident
representative offices in China (including Guangdong and Fujian Provinces and
the special economic zones), their applications shall be dealt with reterence
to the “Interim Provisions” and this Clarification.
(15) Should problems arise in the course of tbe execution of the “interim
Provisions” and of this Clarification, and that explanation and solutions are
called for, they shall be handled through coordination and consultation by the
State Commission for the Administration of Foreign Investments.?
