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The State Administration for Industry and Commerce
Reply of the State Administration for Industry and Commerce on the Issue Whether Enterprises with Foreign Investment May Contract
and Operate Domestic-funded Commercial Enterprises
GongShangQiZi [1996] No.245
July 8, 1996
Beijing Bureau for Industry and Commerce:
We have studied your Request for Instructions on Whether Enterprises with Foreign Investment May Contract and Operate Domestic-funded
Commercial Enterprises (JingGongShangWenZi [1996] No.103) and now reply as follows:
I.
Registered enterprises with foreign investment should perform their duty of capital appropriation requirement and operate in accordance
with the laws and regulations. Therefore, Beijing Jiachuang Business Administration Consulting Co., Ltd. (hereinafter referred to
as Jiachuang) should appropriate investment fund in compliance with the above-mentioned principle and operate within the scope of
business approved by the competent registration authority.
II.
The country does not provide legal reference for enterprises with foreign investment to contract domestic-funded enterprises. Therefore
enterprises with foreign investment lack in sufficient legal and regulatory reference to contract domestic-funded enterprises. Before
the country prescribes any clear provisions, enterprises with foreign investment contracting to operate industries where foreign
investment is restricted or banned by the state, should seek approval from authorized examination and approval authorities and register
with their initial registration authorities in reference to such provisions as “Interim Provisions on Guiding Direction of Foreign
Investment” and “Guiding List of Industries with Foreing Investment”. In the case of Jiangchuang, which contracted domestic-funded
enterprises and engaged itself in commercial retailing and wholesaling activities without the approval of and registration with competent
authorities, your Administration is therefore requested to order for the termination of the contract and submit a self-criticism
in writing.
III.
As regards the issue of “commercial property management” in Jiachuang’s scope of business, the content of commercial property management
should be specific management of commercial facilities (such as renting, maintenance and security protection of commercial facilities
and other relevant items) and thus does not cover commercial retailing and wholesaling.
Your administration is requested to work together with Beijing Development Planning Commission and Beijing Foreign Trade and Economic
Commission and jointly order Jiangchuang to revise the inappropriate description of its scope of business in its articles of association
and contract and to report the revision results to the State Administration for Industry and Commerce.
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