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2005

CIRCULAR OF THE GENERAL ADMINISTRATION CUSTOMS ON IMPORT TAXATION POLICY FOR FURTHER ENCOURAGING FOREIGN INVESTMENT

The Customs General Adiministration

Circular of the General Administration Customs on Import Taxation Policy for Further Encouraging Foreign Investment

ShuShui [1999] No.791

November 22, 1999

In accordance with the spirit of the instructions of the State Council, With a view to encouraging foreign investment, the Customs
General Administration has decided, after consulted with the Ministry of Foreign Trade and Economic Cooperation, the State Economic
and Trade Commission and the Ministry of Finance, to further expand the preferential import taxation policy on foreign investment.
The relevant issues are notified as follows:

Article 1

For importation, within their productive operation scope originally approved, of self-using equipment and technology, fittings and
spare parts that can not be produced at home or their capacities can not meet the demands, by the established foreign investment
enterprises under Encouraged Category and Restrictive Category B, research and development centres with foreign investment, foreign
investment enterprises with advanced technology and foreign investment enterprises of export oriented products (hereinafter referred
to as five categories of enterprises for short) for technology reform, Customs duties and import tax may be exempt in accordance
with the Circular of the State Council on the Adjustment of the Taxation Policy On Imported Equipment (GuoFa [1999] No. 37).

1.

Those enjoying tax exemption incentives specified in this Article should meet the following conditions:

(1)

Their sources of funds should be self-owned funds (specifically referred to the enterprise’s reserve funds, development funds, deducting
depreciation fee and profit after tax payment) outside the total amount of investment of the five categories of enterprises;

(2)

The use of imported commodities: renewal or maintenance, within the productive operation scope originally approved, of the original
equipment of the enterprises (complete set of equipment and production lines are not included);

(3)

Import commodities scope: equipment not capable to produce at home (commodities outside the List of Import Commodities by Home Investment
Projects Not to Be Exempted from Tex) as well as technology, fittings and spare parts forming complete set with the above mentioned
equipment (including those imported along with the equipment or those imported in separation).

2.

Procedures to go through for levy or exemption from tax:

(1)

Importation testimony produced: Testimonial Paper for Importation, by Enterprises with Foreign Investment, of Renewal Equipment,
Technology, Fittings and Spare Parts (for the form, see Attachment one below) produced by the departments concerned in accordance
with the provisions of sub-sections one and two, Paragraph 1 of this Article, of which testimonial paper for enterprises under Encouraged
Category and Restrictive Category B should be produced by the original authorities for examination and approval that had produced
project confirmation (for the above mentioned enterprises set up with approval prior to the date of December 31, 1997, their testimonial
paper should be produced by the original authorities for examination and approval); testimonial paper for research and development
centres with foreign investment should be produced by the original authorities for examination and approval (for the details, see
the sub-section one, Paragraph l, Article 2 of the present Circular); testimonial paper for products export-oriented enterprises
and enterprises with advanced technology should be produced by the Ministry of Foreign Trade and Economic Cooperation or by the departments
of foreign trade and economic cooperation of the various provinces, autonomous regions, municipalitie directly under the Central
Government and municipalities separately listed on the State plan that had issued Confirmation Paper for products Export-Oriented
Enterprises with Foreign Investment and Confirmation Paper for Enterprises with Foreign Investment with Advanced Technology.

(2)

Procedures to go through for testimony for levy or exemption from tax: Customs directly under the General Administration of Customs
in the places where the enterprises are located shall produce testimonial paper by the above mentioned testimonial papers, contracts
and import licenses and other material related after verifying the importation commodities scope against the provisions of sub-section
three, Paragraph l of this Article.

3.

Specific rules:

(1)

In case the five categories of enterprises carry out technology reform beyond the scope as defined by sub-section two, Paragraph
1 of this Article, their importation should be testified by Registration Certificate for Confirmation of Technology Reform Projects
produced according to their respective examination and approval power by the State or the provincial economic and trade commission
(for the form, see Attachment 2);

(2)

In case the five categories of enterprises carry out equipment renewal and maintenance or technology reform by using their own funds,
which needs to import commodities within the confines of the List of Import Commodities by Home Investment Projects Not to Be Exempt
from Tax, and if the commodities are surely of the same kind of products whose capacities can not meet the demands, they shall be
verified by the State industrial department in charge of the said products, and shall have to produce from the same department Certificate
for Importation of the Same Kind of Equipment Needed by Enterprises with Foreign Investment for Equipment Renewal or Technology Reform
that Can Not Be Produced at Home (for the form, see Attachment 3). And Customs directly under the Customs General Administration
shall handle the procedures for examination and approval for tax exemption for the equipment and technology forming a complete set
imported, by the above mentioned testimony and Certificate for Importation by Enterprises with Foreign Investment, of Renewal Equipment,
Technology, Fittings and Spare Parts or Registration Certificate for Confirmation of Technology Reform Projects, and contracts, import
license and other material related.

Article 2

Importation, within their total amount of investment, by research and development centres established by using foreign investment,
of self-using equipment and technology, fittings and spare parts forming a complete set which can not be produced at home or their
capacities can not meet the demands, shall be exempt from Customs duties and import tax in accordance with the Provisions of Circular
of the State Council On the Adjustment of Taxation Policy On Imported Equipment (Guofa [1999] No. 37).

1.

Those enjoying taxation incentives specified in this Article should meet the following conditions:

(1)

The enjoying units should be research institutions set up within the enterprises with foreign investment or separately established,
specially engaged in the development of products or technology that are approved by the State Planning Commission, State Economic
and Trade Commission, the Ministry of Foreign Trade and Economic Cooperation as well as the departments or bureaus of planning commissions,
economic and trade commissions and foreign trade and economic cooperation of the various provinces, autonomous regions, municipalitie
directly under the Central Government and municipalities separately listed on the State plan;

(2)

The source of funds is confined within the total amount of investment;

(3)

Import commodities scope: self-using equipment can not be produced at home or their capacities can not meet the demands (referred
to commodities outside the List of Import Commodities by Foreign Investment Projects Not to Be Exempt from Tax) and technology, fittings
and spare parts forming complete set which do not constitute laboratories with production size or medium experiment norm, and do
not include ships, airplanes, special types of vehicles and construction machinery.

2.

Procedures to go through for levy and exemption from Tax:

(1)

Project confirmation paper to be produced: Project confirmation paper for research and development centres with foreign investment
shall be produced, according to the examination and approval power over the above mentioned research institutions, and the provisions
of sub-sections one and two, Paragraph 1 of this Article, by the State Planning Commission, the State Economic and Trade Commission,
Ministry of Foreign Trade and Economic Cooperation and the departments or bureaus of planning commissions, economic and trade commissions
and foreign trade and economic cooperation of the various provinces, autonomous regions, municipalitie directly under the Central
Government and municipalities separately listed on the State plan. The form and contents of the project confirmation paper are the
same with those of Confirmation Papers for Home and Foreign Investment Projects Encouraged for Development by the State attached
to Document ShuShui [1999] No. 1062.

(2)

Handling of the certificate for levy or exemption from tax: Customs directly under the General Administration of Customs in the places
where the enterprises are located shall handle the certificate by the above mentioned projects for confirmation paper and the relevant
material and on the analogy of the provisions of Document ShuShui [1999] No. 1062.

Article 3

For those projects conforming to the list of the advantageous industries and advantageous projects for utilizing foreign investment
of the central and west provinces, autonomous regions and municipalities directly under the State Council (the list will separately
be issued after approval by the State Council, same below), their import within their total amount of investment, of self-using equipment
which can not be produced at home or their capacities can not meet the demands, and technology, fittings and spare parts forming
a complete set, shall be exempt from import duties and import tax, except those prescribed in Document GuoFa [1999] No.37 enpost_titled
the List of Import Commodities by Foreign Investment Projects Not to Be Exempt from Tax. The relevant procedures shall be handled
on the analogy of the regulations on foreign investment projects described in Document ShuShui [1999] No.1062.

Article 4

For those projects conforming to the list of the advantageous industries and advantageous projects for utilizing foreign investment
in the central and west provinces, autonomous regions and municipalities directly under the State Council, the scope of commodities
imported with their own funds outside their total amount of investment which enjoy preferential taxation policy and the procedures
for tax exemption shall be handled on the analogy of the relevant provisions on the five categories of enterprises described in Article
l of the present Circular.

Article 5

Where the goods imported with tax exemption in accordance with the regulations of this Circular are goods under the Customs’ supervision
and control, they shall not be sold and transferred freely by the enterprises themselves. Equipment replaced owing to equipment renewal
or technology reform, if continually to be used within the enterprises, shall be managed over according to the period for supervision
and control by the Customs, and shall be exempt from additional tax payment in case the equipment is sold or transferred within the
period for supervision and control to enterprises enjoying preferential taxation policy for imported equipment. In other cases, tax
shall be levied according to the laws and regulations related.

Article 6

Customs directly under the General Administration of Customs where the enterprises are located should strengthen contact and coordination
with the Customs where the goods are imported and should raise up working efficiency. Customs directly under the Customs General
Administration should inform as soon as possible the Customs where the goods are imported for handling the procedures for check and
approval of tax exemption after verifying without error the Certificate for Levy or Exemption from Tax for Imported Goods presented.
In case the Customs where the enterprises are located are not the seating places of the Customs directly under the General Administration
of Customs, applications can be accepted and examined by the Customs at lower level in the seating place, be reported to the Customs
directly under the Customs General Administration for verification and for producing certificate for levy or exemption from tax.
The General Administration of Customs will organize forces to supplement and readjust as soon as possible the Management System for
Tax Reduction and Exemption and to computerize the management of this preferential taxation policy.

Article 7

This preferential taxation policy involves multi-departments and multi-policies, and the various Customs should learn and grasp in
real earnest the spirit of the document, and should strictly carry it out and should not expand at their will tax exemption scope.
The Customs should actively contact local governments and the responsible departments concerned to do well propaganda work.

Article 8

The present Circular shall be enforced from September 1, 1999, but the tax payment already collected shall not be returned. Those
declared and imported after this date but without going through tax levy procedures, Customs clearance shall be made for them with
tax exemption, and their securities already charged shall be returned to them.

For any question and situation that may arise in implementation, please report in time to the Department for Customs Duties Collection
and Control of the General Administration of Customs.

Attachment 1: Certificate for Importation of Renewal Equipment, Technology, Fittings and Spare Parts by Enterprises with Foreign
Investment (omitted)

Attachment 2: Certificate Registered for Confirmation for Technology Reform Projects (omitted)

Attachment 3: Certificate for Importation of the Same Kind of Equipment Needed by Enterprises with Foreign Investment for Equipment
Renewal or Technology Reform that Can Not Be Produced at Home (omitted)



 
The Customs General Adiministration
1999-11-22

 






REPLY OF THE STATE ADMINISTRATION FOR INDUSTRY AND COMMERCE ON THE ISSUE WHETHER ADMINISTRATIVE PENALTIES ARE APPLICABLE TO ENTERPRISES WITH FOREIGN INVESTMENT

The State Administration for Industry and Commerce

Reply of the State Administration for Industry and Commerce on the Issue Whether Administrative Penalties are Applicable to Enterprises
with Foreign Investment

GongShangQiZi [1999] No.47

March 1, 1999

Fujian Administration for Industry and Commerce:

We have studied your Request for Urgent Instructions on Whether Administrative Penalties are Applicable to Enterprises with Foreign
Investment (MinGongShangWaiQiZi [1999] No.44) and now reply as follows:

I.

Article 75 of the Regulations of the People’s Republic of China on Company Registration Administration stipulates that “This article
is applicable for the registration of foreign-invested companies of limited liability. Laws and administrative regulations on enterprises
with foreign investment are applicable if they contain provisions otherwise on the registration of these businesses”. In accordance
with this principle, Article 5 of the Regulations of the People’s Republic of China for Controlling the Registration of Enterprises
as Legal Persons (hereinafter referred to as the Regulations) enacted by the State Council in 1988, namely “Chinese-foreign Equity
Joint ventures, Chinese-foreign contractual joint ventures and foreign-capital enterprises should register with the State Administration
for Industry and Commerce or local administrations for industry and commerce authorized by the former.” is applicable for registration
administration of enterprises with foreign investment. Your administration is authorized by the State Administration for Industry
and Commerce to examine and approve the registration of enterprises with foreign investment and is therefore authorized to conduct
registration administration of enterprises with foreign investment under your administration.

II.

As for the sealing of the business license of enterprises with foreign investment, the Regulations has explicitly stipulated that
the State Administration for Industry and Commerce or local administrations for industry and commerce authorized by the former are
competent authorities to examine and approve the registration of enterprises with foreign investment. The document of the business
license is issued and sealed exclusively by the State Administration for Industry and Commerce, however, the registration number
of the license is issued by the authorized local administration, which is held responsible for its administrative conduct. To maintain
the stability of the reform and opening-up policy, little alteration is required for the business license of enterprises with foreign
investment. It has been a nationwide standing practice for years and no dispute on the document has ever arisen.

III.

In accordance with the Regulations and Article 8 of the Provisional Regulations on Administrative Penalty Procedures by Administrations
for Industry and Commerce enacted by the State Administration for Industry and Commerce, namely, “Administrative penalties on enterprises
with foreign investment and permanent representative offices of foreign enterprises for violation of business registration administration
provisions should be imposed by the State Administration for Industry and Commerce or local administrations for industry and commerce
authorized by the former”, your administration is authorized to impose administrative penalties on enterprises with foreign investment
for violation of registration administration provisions under your administration and should report to the State Administration for
Industry and Commerce for file-keeping purpose.



 
The State Administration for Industry and Commerce
1999-03-01

 






INTERIM MEASURES FOR TRIAL CHINESE-FOREIGN EQUITY JOINT VENTURE OF TRAVEL AGENCIES

The National Tourism Administration, the Ministry of Foreign Trade and Economic Cooperation

Circular of the National Tourism Administration and the Ministry of Foreign Trade and Economic Cooperation on Modifying Interim Measures
for Trial Chinese-foreign Joint Venture of Travel Agencies

LvBanfa [1999] No.061

April 19, 1999

Bureaus of tourism administration and foreign trade and economic cooperation commissions (departments, bureaus) of various provinces,
autonomous regions and municipalities directly under the Central Government:

On December 2, 1998, under the approval of the State Council, the National Tourism Administration and MOFTEC jointly promulgated
Interim Measures for Trial Chinese-foreign Travel Agencies of Equity Joint (hereinafter referring to as Interim Measures), which
have errors in wording. Now the full text has been modified, please implement accordingly.

This is hereby notified.

Interim Measures for Trial Chinese-Foreign Equity Joint Venture of Travel Agencies

Article 1

With a view to further expanding the opening-up and promoting development of tourism, these measures are promulgated in line with
Law of the People’s Republic of China on Chinese-foreign Equity Joint Ventures and Management Regulations of Travel Agencies, as
well as other relevant laws and regulations.

Article 2

These measures are applicable to Chinese-foreign Equally joint ventures of travel agencies (hereinafter referred to as joint venture
travel agencies) established within the territory of China by foreign companies or enterprises and Chinese companies or enterprises.

Article 3

The Chinese partner applying to establish joint venture travel agencies must meet the following conditions:

1.

Be an international travel agency.

2.

The average annual number of foreign-related travelers in the three years prior to the application shall be over 30,000 people a day.

3.

The annual average sales volume of tourism in the three years prior to the application shall be over 50 million yuan.

4.

Be a formal member of Chinese Association of Tourism.

Article 4

The foreign partner applying to establish joint venture travel agencies must meet the following conditions:

1.

Be a travel agency engaged in international tourism of an enterprise that has wholly-owned travel agencies engaged in international
tourism.

2.

The annual sales volume of tourism shall be over $ US 50 million.

3.

Have accession to computer subscription network at home and abroad, or have a computer subscription network of its own.

4.

Be a formal member of Chinese Association of Tourism.

Article 5

Joint venture travel agencies must meet the following conditions:

1.

Registered capital of no less than RMB 5 million yuan.

2.

Be limited liability corporation.

3.

The shares of the Chinese contribution to registered capital shall be no more than 51%.

4.

The legal representative appointed by Chinese party.

5.

Business places, facilities and operating personnel that meet legal requirements.

6.

The duration of the joint venture is limited within 20 years.

Article 6

Joint venture travel agencies must pay quality cash deposit in accordance with the regulations of entry tourism for international
travel agencies.

Article 7

The examination and approval procedures of joint venture travel agencies are:

1.

The Chinese partner shall submit such documents as the project proposal and the feasibility study report to the tourism administration
departments of the provinces concerned (autonomous regions, municipalities directly under the Central Government) or municipalites
separately listed on the State plan. The latter will transmit to National Tourism Administration after its preliminary examination.

For Chinese partner that is enterprise under Central Government, the above-mentioned documents shall be examined by its higher authority
before being reported to the National Tourism Administration.

The National Tourism Administration shall examine and approve the documents in accordance with the State laws and regulations concerning
the management of tourism.

2.

The Chinese partner, after obtaining the written approval from the National Tourism Administration, shall submit such documents as
contract and articles of association of joint venture travel agencies to the competent authorities of foreign trade and economic
cooperation at provincial level. The latter shall submit the documents to the Ministry of Foreign Trade and Economic Cooperation
(hereinafter referred to as the MOFTEC) after its preliminary examination.

For Chinese partner that is enterprise under Central Government, the above mentioned documents shall be examined by the higher authorities
before being submitted to the MOFTEC.

The MOFTEC shall examine and approve the documents in accordance with the State laws and regulations concerning foreign investment.

3.

For projects approved to be set up, the Chinese partner shall go through formalities of registration and tax procedures, by presenting
the Certificate of Approval for Foreign-funded Enterprises issued by the MOFTEC and the Business License of Travel Agencies issued
by the National Tourism Administration.

Article 8

The following documents shall be submitted for applications for establishing joint venture travel agencies:

1.

Qualification evidence of the Chinese partner including a copy of the business license, the business license of travel agencies, annual
examination reports for three years prior to the application, and the certificate of membership of the relevant tourism associations.

2.

Qualification evidence of the foreign partner including a copy of registration, a bank credit certificate, financial status papers
issued by certified accountants’ offices, a certificate of accession to subscription networks issued by the relevant computer companies,
a certificate of membership of tourism associations of their own countries and the annual report of the year prior to the application.

3.

Project proposal of the joint venture travel agency

4.

Feasibility study report of the joint venture travel agency

5.

Contract and articles of association of the joint venture travel agency

6.

Other documents required by the laws, regulations, or the examination and approval departments

Article 9

Each foreign partner may establish only one joint venture travel agency in China.

Article 10

Joint venture travel agencies are now not allowed to establish branches during the experiment period.

Article 11

Joint venture travel agencies may run business in entry tourism and domestic tourism.

Article 12

Joint venture travel agencies are now not allowed to run business in Chinese citizens’ traveling to other countries and to Hong Kong,
Macao and Taiwan.

Article 13

Special tourism items and traveling to special regions operated by joint venture travel agencies must be examined and approved by
the National Tourism Administration and other relevant departments.

Article 14

Joint venture travel agencies are not allowed to run travel items that include gambling, addictive drug taking, and obscene contents
and other items that are harmful to social ethics and people’s physical and mental health. No item that will impair the national
interests and dignity of China is allowed to organize, and items that include contents violating Chinese laws and regulations are
prohibited.

Article 15

The recruiting of tourist guides in China by joint venture travel agencies should be handled in accordance with the relevant regulations
of the State.

Article 16

Joint venture travel agencies are subject of the management of the tourism administration departments.

Article 17

Joint venture travel agencies shall submit financial, accounting, and statistical reports to tourism administration departments and
other relevant departments for business examination.

Article 18

Foreign exchange revenue and expenditure of joint venture travel agencies are subject to rules applicable to foreign-funded enterprises.

Article 19

Joint venture travel agencies must abide by the laws and regulations of China and are subject to Chinese jurisdiction and their legitimate
business activities and interests are protected by Chinese laws and regulations.

Any violation of Chinese laws and regulations by joint venture travel agencies shall be dealt with in accordance with relevant laws
and regulations.

Article 20

Violations of the above measures shall be punished by tourism administration departments according to the Management Regulations of
Travel Agencies and the Detailed Rules for the Implementation of the Management Regulation of Travel Agencies.

Article 21

The Interim Measures for the Management of Examination and Approval of Establishing First-class Joint Venture Travel Agencies in National
Tourist Resorts shall still be valid when the above measures are implemented.

Article 22

Establishment of joint venture travel agencies by domestic investors and investors from Hong Kong, Macao and Taiwan shall be handled
with reference to the above measures.

Article 23

These Regulations shall be interpreted by the National Tourism Administration and MOFTEC.

Article 24

These Measures shall come into force as of the date of promulgation.



 
The National Tourism Administration, the Ministry of Foreign Trade and Economic Cooperation
1999-04-19

 






EXPERIMENTAL MEASURES FOR FOREIGN-FUNDED COMMERCIAL ENTERPRISES

Category  FOREIGN ECONOMIC RELATIONS AND TECHNOLOGICAL COOPERATION Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1999-06-25 Effective Date  1999-06-25  


Experimental Measures for Foreign-funded Commercial Enterprises



(Approved by the State Council on June 17, 1999, promulgated by Decree No. 12 of the State Economic and Trade Commission and the Ministry of Foreign Trade and Economic Cooperation on June 25, 1999)

    Article 1  These Measure are formulated in accordance with such laws and regulations as the Law of the People’s Republic of China’s
on Chinese and Foreign Equity Joint ventures and the Law of the People’s Republic of China on Chinese and Foreign Cooperative Joint
Ventures in order to deepen the opening-up policy, promote the revolution and development of commercial enterprises, propel the building
of domestic market and ensure the healthy and orderly implementation of pilots that widen commercial field and employ foreign investment.

    Article 2  These Measures apply to equity or cooperative commercial enterprises established by foreign and Chinese companies, enterprises
within China (hereinafter referred to as jointly-operated commercial enterprises). The establishment of commercial enterprises wholly
funded by foreigners is not allowed temporarily.

    Article 3  The jointly-operated commercial enterprises must adapt to the commercial development plans of the cities where they are
located, be able to introduce the advanced marketing and managing experience in the globe, stimulate the modernization of domestic
commerce, propel the export of domestic products, and bring economic and social benefits.

    Article 4  The areas in which jointly-operated commercial enterprises may be established shall be prescribed by the State Council,
presently they are confined to provincial capitals, capitals of autonomous regions, municipalities directly under the Central Government,
cities separately listed on the State plan and special economic zone (hereinafter referred to as pilot areas).

    Article 5  The investors of jointly-operated commercial enterprises must conform to the following conditions:

    (1) foreign operators or the major ones of foreign operators in the jointly-operated commercial enterprises
(hereinafter referred to as foreign operators) shall be enterprises that possess comparatively strong economic power, advanced marketing
skills and managing experiences, wide international marketing network, good reputation and remarkable operating achievement and the
capability of propelling the export of China’s products through the established jointly-operated commercial enterprises.

    Foreign operators who apply to establish retail-oriented jointly operated commercial enterprises shall possess
an average sale of more than 2 billion US Dollars three years before application and asset of more than 0.2 billion US Dollars one
year before application.

    Foreign operators who apply to establish wholesale-oriented jointly-operated commercial enterprises shall
possess an average wholesale volume of more than 2.5 billion US Dollars 3 years before application and asset of more than 0.3 billion
US Dollars one year before application.

    (2) The Chinese operators or the major ones of Chinese operators (hereinafter referred to as Chinese operators)
shall be current enterprises that possess comparatively strong economic power and operating capacity. Their asset shall be more than
50 million RMB (30 million RMB in the middle and western areas) one year before application. If Chinese operators are commercial
enterprises, the average sale of the three years before application shall be more than 0.3 billion RMB (0.2 billion in the middle
and western areas); if they are foreign trade enterprises, the average self-operated import and export volume three years before
application shall be more than 50 million US Dollars (the export volume shall be no less than 30 million US Dollars).

    Article 6  Jointly-operated commercial enterprises must conform to the following conditions:

    (1) conform to the relevant Chinese laws, regulations and provisions;

    (2) conform to commercial development plans of the cities where they are located;

    (3) the registered asset of retail-oriented jointly-operated commercial enterprises shall not be less than
50 million RMB, that of those in middle and western areas shall not be less than 30 million RMB; the registered asset of wholesale-oriented
commercial enterprises shall not be less than 80 million RMB, that of those in middle and western areas shall not be less than 60
million RMB.

    (4) if the jointly-operated commercial enterprises have the operation of more than 3 chain stores (except
the grocery store for people’s convenience, professional stores and exclusive stores), Chinese operators shall offer a proportion
of more than 51% of the total capital; if the jointly-operated commercial enterprises are in good operating condition, the foreign
operators have purchased a large quantity of domestic products and there is a possibility to take the advantage of foreign operators’
international marketing network to promote the export of domestic products, foreign operators can hold the share after the approval
of the State Council.

    Chinese operators shall provide no less than 35% of the total capital in the jointly-operated commercial enterprises
with no more than three branch stores (including three) as well as in grocery store for people’s convenience, professional stores
and exclusive stores which are in chain operation.

    In the wholesale oriented jointly-operated commercial enterprises (including retail enterprises engaged in
wholesale business simultaneously), Chinese operators must offer a proportion of more than 51% of the total capital.

    (5) the branch store of the jointly-operated commercial enterprises are confined to the concatenate form that
foreign and Chinese operators both invest and operate directly. Other concatenate forms such as free chains or concessionary chains
are prohibited temporarily.

    (6) the operating period shall not exceed 10 years, 40 years for the middle and western areas.

    Article 7  Under the condition that foreign operators contract with jointly-operated commercial enterprises concerning the use of
trademark and trade name and technological transfer, the related expenses that foreign operators collect shall not exceed 0.3% of
the enterprise’s sale volume of the year and the limited period for collection is 10 years.

    Article 8  Jointly-operated commercial enterprises shall be established according to the following procedure:

    Chinese operators shall submit feasibility reports (fungible of project propositions) and relevant documents
to economic and trade commissions (economic commissions, planning and economic commissions, the same in the following part) in the
pilot areas, which in conjunction with the competent domestic trade departments shall report to the State Economic and Trade Commission
according to the prescribed procedures. The State Economic and Trade Commission shall examine and approve the reports after consulting
the Ministry of Foreign Trade and Economic Cooperation.

    After the feasibility reports (fungible of project propositions) have been approved, the foreign trade and
economy departments in the pilot areas shall submit the contracts and articles of associations to the Ministry of Foreign Trade and
Economic Cooperation according to the prescribed procedures, which shall examine and approve the contracts and articles of associations.

    Jointly-operated commercial enterprises which have been approved shall, within one month since the date of
receiving the approval certificate, register with the State Administration of Industry and Commerce on the strength of the Approval
Certificate for Foreign-funded Enterprises issued by the State Administration of Industry and Commerce.

    Article 9  To establish jointly-operated commercial enterprises, the following documents shall be submitted:

    I.the declaring document on the study of feasibility

    (1)the feasibility report compiled by all operators (fungible of project proposition);

    (2)bank’s certification on property and credit, certificate of registration (photocopy), legal representative
certificate (photocopy) of all operators;

    (3)all operators’ annual asset and liability table, profit and loss table of the recent three years audited
by accounting agency;

    (4)(if Chinese operator makes investment with State-owned property) the confirmation document of State-owned
property managing departments on the assessing report concerning Chinese operator’s investing State-owned property;

    (5) the species of merchandises that the planned jointly-operated commercial enterprises will operate;

    (6) other related documents.

    II.the declaring documents concerning contract and articles of association

    1.the declaring documents on the study of feasibility and the approving documents thereof;

    2.contracts and articles of association of the planned jointly-operated commercial enterprises signed by accredited
representatives of all operative parties;

    3.list of import and export merchandises;

    4.the members of the board of directors of the planned jointly-operated commercial enterprises and the accreditation
of directors from all parties;

    5.the notice of the approval of enterprise’s appellation provided by the State Administration of Industry
and Commerce;

    6.other related documents.

    The documents mentioned above refer to formal documents except those marked with “photocopy”. Non-legal representatives
shall show the accreditation provided by legal representatives in order to sign the documents.

    Article 10  If State-owned circulation enterprises invest to establish jointly-operated commercial enterprises, the assessing setups
accredited by State-owned property management departments shall make scientific and righteous assessment on the tangible and intangible
property invested in the light of the Measures on the Management of Assessment of State-owned Property. The assessment result serves
as the foundation for evaluating State-owned property after the confirmation of State-owned property management departments at or
above province level.

    Article 11  If the established jointly-operated commercial enterprises expect to involve wholesale business, establish branch stores
or replace the cooperative party, the Ministry of Foreign Trade and Economic Cooperation shall conduct examination and approval after
consulting the State Economic and Trade Commission; other changes of the established jointly-operated commercial enterprises shall
be examined and approved by the original examining and approving organ according to the current provisions concerning foreign investment.
Jointly operated commercial enterprises shall submit the following documents:

    (1) application report;

    (2) the report on enterprise’s operating situation;

    (3) the report on the property evaluation;

    (4) the report and certification on the enterprise’s export situation;

    (5) related decisions of the board of directors;

    (6) agreement on the revision of contract and provision;

    (7) other related documents.

    The enterprise shall register with the State Administration of Industry and Commerce and undergo the procedures
of revision within one month since the date when the revised contract and articles of association are approved.

    Article 12  The operation scopes of jointly-operated commercial enterprises are:

    1. the operation scopes of retail-oriented jointly-operated commercial enterprises are:

    (1) commercial retail operation (including sell on a commission basis or sell by mail);

    (2) organize the export business of domestic products;

    (3) export and import business of its own merchandises;

    (4) the related matching services.

    2.the operation scopes of wholesale-oriented jointly-operated commercial enterprises are:

    wholesale of domestic and self-operated import merchandises within China, organizing the export of domestic
products.

    Article 13  Retail-engaged jointly-operated commercial enterprises can also operate wholesale business.

    Article 14  Jointly-operated commercial enterprises are prohibited form engaging in acting business of export and import .

    Article 15  Jointly-operated commercial enterprises, operating merchandises on which the State has special provisions as well as those
export and import merchandises with quota and license involved, shall undergo examining and approving procedure according to related
provisions of the State.

    The annual import volume of the jointly operated commercial enterprise shall not exceed 30% of its annual
selling volume.

    Article 16  Jointly-operated commercial enterprises shall conform to laws and regulations of the People’s Republic of China and subject
themselves to the jurisdiction of China’s laws and regulations. Their normal operating activities and lawful rights and interests
are protected by China’s laws and regulations.

    If the activities of jointly operated commercial enterprises violate laws or regulations of China, the enterprises
shall be punished in accordance with the relevant laws and regulations of China.

    Article 17  These Measure shall be strictly followed in the establishment of jointly-operated commercial enterprises at all localities.
The Sate Economic and Trade Commission, the Ministry of Foreign Trade and Economic Cooperation, the State Administration of Industry
and Commerce shall investigate and deal with those acts violating these Measure. All local economic and trade commissions, foreign
trade and economic department and related departments shall investigate the pilots timely, summarize experience earnestly and solve
the problems appropriately.

    Article 18  The State Economic and Trade Commission, the Ministry Foreign Trade and Economic Cooperation, the State Administration
of Industry and Commerce or their authorized organs shall conduct supervision and administration on the foreign-funded jointly-operated
commercial enterprises in accordance with law.

    Article 19  The establishment of jointly-operated commercial enterprises in the mainland of China by investors from Hong Kong Special
Administrative Region, Macao and Taiwan shall be deal with in accordance with these Measures.

    Article 20  The State Economic and Trade Commission and the Ministry of Foreign Trade and Economic Cooperation are responsible for
the interpretation of these Measure.

    Article 21  These Measure take effect as of the date of promulgation.





COMPANIES LAW

Companies Law of the People’s Republic of China










Order of the President of the People’s Republic of China 

No. 42 

The Companies Law of the People’s Republic of China has been revised and adopted at the 18th Meeting of the Standing Committee
of the Tenth National People’s Congress of the People’s Republic of China on October 27, 2005, and its revised version is hereby
promulgated and shall go into effect as of January 1, 2006. 

Hu Jintao 

President of the People’s Republic of China 

October 27, 2005 

 

(Adopted at the 5th Meeting of the Standing Committee of the Eighth National People’s Congress on December 29, 1993; amended for
the first time in accordance with the Decision on Revision of the Company Law of the People’s Republic of China made at the 13th
Meeting of the Standing Committee of the Ninth National People’s Congress on December 25, 1999; amended for the second time in
accordance with the Decision on Revision of the Company Law of the People’s Republic of China made at the 11th Meeting of the Standing
Committee of the Tenth National People’s Congress on August 28, 2004; and revised at the 18th Meeting of the Standing Committee
of the Tenth National People’s Congress on October 27, 2005) 

Contents 

Chapter I　General Provisions 

Chapter II　Incorporation and Organizational Structure of a Company with Limited Liability 

Section 1　Incorporation 

Section 2　Organizational Structure 

Section 3　Special Provisions on One-person Companies with Limited Liability 

Section 4　Special Provisions on Wholly Stated-owned Companies 

Chapter III　Equity Transfer of Companies with Limited Liability 

Chapter IV　Incorporation and Organizational Structure of a Company Limited by Shares 

Section 1　Incorporation 

Section 2　Shareholders General Assembly 

Section 3　Board of Directors, and the Manager 

Section 4　Board of Supervisors 

Section 5　Special Provisions on Organizational Structure of Listed Companies 

Chapter V　Issue and Transfer of Shares of Companies Limited by Shares 

Section 1　Issue of Shares 

Section 2　Transfer of Shares 

Chapter VI　Qualifications and Obligations of Directors, Supervisors and Senior Managers of Companies 

Chapter VII　Corporate Bonds 

Chapter VIII　Financial Affairs and Accounting of Companies 

Chapter IX　Merger and Division of Companies, Increase and Reduction of Capital 

Chapter X　Dissolution and Liquidation of Companies 

Chapter XI　Branches of Foreign Companies 

Chapter XII　Legal Responsibility 

Chapter XIII　Supplementary Provisions 

Chapter I　General Provisions 

Article 1　This Law is enacted in order to standardize the organization and behavior of companies, to protect the legitimate rights
and interests of companies, shareholders and creditors, to maintain the socio-economic order and to promote the development of the
socialist market economy. 

Article 2　For the purposes of this Law, the term company refers to a company with limited liability or a company limited by shares
incorporated within the territory of the People’s Republic of China in accordance with this Law. 

Article 3　A company is an enterprise legal person, which has independent property of a legal person and enjoys the property rights
of a legal person. The company shall be liable for its debts to the extent of its entire property. 

Shareholders of a company with limited liability shall assume liability towards the company to the extent of the capital contributions
subscribed respectively by them; and the shareholders of a company limited by shares shall assume liability towards the company to
the extent of the shares subscribed respectively by them. 

Article 4　The shareholders of a company shall, in accordance with law, enjoy such rights as benefiting from the assets of the company,
participation in making major decisions and selection of managerial personnel. 

Article 5　In its operational activities, a company shall abide by laws and administrative regulations, observe social morals and
commercial ethics, persist in honesty and good faith, accept supervision by the government and the public, and assume social responsibility. 

The legitimate rights and interests of companies shall be protected by law, and shall be inviolable. 

Article 6　Where an entity intends to incorporate a company, it shall, in accordance with law, apply to a company registration authority
for registration of such incorporation. Where the conditions for incorporation provided for by this Law are met, the company registration
authority shall have the company registered as a company with limited liability or a company limited by shares; and where the said
conditions are not met, the company shall not be registered as one with limited liability or as one limited by shares. 

Where laws or administrative regulations provide that approval is required for incorporation of a company, the procedures of approval
shall be completed according to law prior to registration of the company. 

The public may apply to the company registration authority for inquiry about the items registered by a company, and the authority
shall provide services for such inquiry. 

Article 7　The company registration authority shall issue a business license to a company incorporated according to law. The date
on which the business license is issued shall be the date on which a company is incorporated. 

In the business license of a company shall clearly be stated such items as the name, domicile, registered capital, actually received
capital, scope of business and name of the legal representative of the company. 

Where the items stated in the business license of a company are altered, the company shall have the alterations registered according
to law, and the company registration authority shall renew its business license. 

Article 8　A company with limited liability incorporated according to this Law shall have the words “company with limited liability”
or “limited company” indicated in its name. 

A company limited by shares incorporated according to this Law shall have the words “company limited by shares” or “company
by shares” indicated in its name. 

Article 9　Where a company with limited liability is to be changed into a company limited by shares, it shall meet the conditions
of a company limited by shares provided for by this Law. Where a company limited by shares is to be changed into a company with limited
liability, it shall meet the conditions of a company with limited liability provided for by this Law. 

Where a company with limited liability is changed into a company limited by shares, or a company limited by shares is changed into
a company with limited liability, the rights of credit and the debts of the company prior to the change shall be inherited by the
company after the change. 

Article 10　The domicile of a company shall be the place where its main administrative organization is located. 

Article 11　Articles of association shall be formulated according to law when a company is incorporated. The articles of association
of a company shall have binding force on the company, its shareholders, directors, supervisors and senior managers. 

Article 12　The business scope of a company shall be defined in the company’s articles of association, and shall be registered
according to law. A company may revise its articles of association and alter its scope of business, but shall have such revision
and alteration registered. 

The items within the scope of business of a company that are subject to approval as provided for by laws and administrative regulations
shall be submitted for approval according to law. 

Article 13　The chairman of the board of directors, the executive director or the manager shall, in accordance with the provisions
of a company’s articles of association, serve as the legal representative of the company, which shall be registered according to
law. Where the legal representative of a company is replaced, the company shall have such replacement registered. 

Article 14　A company may establish branches. Where a company intends to establish a branch, it shall apply for registration to
the company registration authority, in order to obtain a business license for the branch. However, such a branch shall not possess
the status of a legal person, and its civil liabilities shall be borne by the company. 

A company may establish subsidiaries, which shall possess the status of legal persons, and shall independently bear civil liabilities
according to law. 

Article 15　A company may invest in other enterprises; however, it shall not become the investor that assumes joint and several
liability for the debts of the enterprises in which it invests, except where otherwise provided for by law. 

Article 16　Where a company intends to invest in another enterprise or provide guarantee for another entity, the matter shall, in
accordance with the provisions of the company’s articles of association, be subject to a resolution adopted by the board of directors
or the shareholders assembly or the shareholders general assembly; and where norms for the gross amount of investments or guarantees
and for the amount of a single investment or guarantee are specified in the company’s articles of association, such norms shall
not be exceeded. 

Where a company intends to provide a guarantee for its shareholder or its actual controller, the matter shall be subject to a resolution
adopted by its shareholders assembly or shareholders general assembly. 

The shareholder specified in the preceding paragraph or the shareholder dominated by the actual controller specified in the preceding
paragraph shall not participate in the vote on the matter specified in the preceding paragraph. The resolution on such matter shall
be adopted if it is voted for by other shareholders present at the meeting who hold more than half of the voting rights. 

Article 17　Companies shall protect the lawful rights and interests of their staff and workers, sign labor contracts with them according
to law, participate in social insurance, and improve occupational protection so as to achieve safety in production. 

Companies shall, in various forms, improve vocational education and on-the-job training among their staff and workers so as to enhance
their quality. 

Article 18　The staff and workers of a company shall, in accordance with the Trade Union Law of the People’s Republic of China,
organize a trade union to carry out trade union activities and protect the lawful rights and interests of the staff and workers.
The company shall provide the trade union of the company with the conditions necessary for carrying out its activities. The trade
union of a company shall represent the staff and workers to sign with the company collective contracts on such items as the payment
for work done, working hours, welfare and insurance benefits as well as occupational safety and health of the staff and workers according
to law. 

Companies shall, through the conference of the representatives of the staff and workers or other forms, carry out democratic management
in accordance with the provisions of the Constitution and relevant laws. 

When a company discusses to make decisions on structural reform or on major issues in business operation, or formulate important
rules and regulations, it shall listen to the opinions of the trade union, and shall listen to the opinions and proposals of the
staff and workers through the conference of the representatives of staff and workers or other forms. 

Article 19　In companies, Communist Party organizations shall, in accordance with the provisions of the Constitution of the Communist
Party of China, be set up to carry out activities of the Party. Companies shall provide the necessary conditions for the Party organizations
to carry out their activities. 

Article 20　The shareholder of a company shall observe laws, administrative regulations and the company’s articles of association,
exercise the rights of a shareholder according to law, and shall not abuse his rights to damage the interests of the company or other
shareholders; and he shall not abuse the independent status of the company as a legal person or the limited liability of shareholders
to damage the interests of the creditors of the company. 

Where the shareholder of a company abuses the rights of shareholders and thus causes losses to the company or other shareholders,
he shall be liable for compensation according to law. 

Where the shareholder of a company abuses the independent status of the company as a legal person or the limited liability of shareholders,
evades debts and thus seriously damages the interests of the creditors of the company, he shall assume joint and several liability
for the debts of the company. 

Article 21　Proprietary shareholders, the actual controllers, directors, supervisors and senior managers of a company shall not
take advantage of their affiliated relations to damage the interests of the company. 

A person who, in violation of the provisions of the preceding paragraph, causes losses to a company shall be liable for compensation. 

Article 22　The resolution adopted by the shareholders assembly or the shareholders general assembly or the board of directors of
a company, which in content violates laws or administrative regulations, shall be invalid. 

Where the procedures for convening the meeting of the shareholders assembly or the shareholders general assembly, or the board of
directors, or the voting formulas are against laws, administrative regulations or the articles of association of a company, or the
content of the resolution adopted is against the company’s articles of association, the shareholders may, within 60 days from the
date the resolution is adopted, request the people’s court to rescind the resolution. 

Where shareholders take legal proceedings in accordance with the provisions of the preceding paragraph, the people’s court may,
upon request of the company, demand the shareholders to provide appropriate guarantee. 

Where a company has registered for alteration in accordance with the resolution adopted by the shareholders assembly, the shareholders
general assembly or the board of directors, and the people’s court declares the resolution invalid or rescinds it, the company
shall apply for cancellation of the registration for such alteration. 

Chapter II　Incorporation and Organizational Structure of a Company with Limited Liability 

Section 1　Incorporation 

Article 23　The following conditions shall be met for the incorporation of a company with limited liability: 

(1) The number of shareholders conforms to the statutory number; 

(2) The capital contributions of the shareholders reach the statutory minimum amount of capital; 

(3) The shareholders have jointly formulated the articles of association; 

(4) The company has its name and has established an organizational structure in conformity with the requirements for a company with
limited liability; and 

(5) The company has its own domicile. 

Article 24　A company with limited liability shall be jointly invested in and incorporated by not more than 50 shareholders. 

Article 25　The articles of association of a company with limited liability shall specify the following items: 

(1) the name and domicile of the company; 

(2) the scope of business of the company; 

(3) the registered capital of the company; 

(4) the names or post_titles of the shareholders; 

(5) the forms of capital contributions, the amounts and dates of capital contributions made by shareholders; 

(6) the bodies of the company, and the measures for their establishment, their functions and powers, as well as the rules of procedure; 

(7) the legal representative of the company; and 

(8) other items which the shareholders assembly deems necessary to be specified. 

The shareholders shall sign their names on and affix their seals to the company’s articles of association. 

Article 26　The registered capital of a company with limited liability shall be the amount of capital contributions subscribed for
by all of its shareholders, as is registered with the company registration authority. The amount of the initial capital contributions
made by all of the shareholders of the company shall be not less than 20 percent of the company’s registered capital, or not less
than the statutory minimum amount of the registered capital either, and the remainder shall be paid for in full by the shareholders
within two years from the date the company is established; and in the case of an investment company, it may pay for the remainder
in full within five years. 

The minimum amount of the registered capital of a company with limited liability shall be RMB 30,000 yuan. Where a greater amount
is provided for by laws or administrative regulations, such provision shall prevail. 

Article 27　A shareholder may make his capital contributions in currency or do so by contributing such non-curreny property as material
objects, intellectual property rights and land-use rights that can be evaluated in currency and can be transferred according to law,
except for the property that is not allowed to be used as capital contributions, as is provided for by laws or administrative regulations. 

Non-curreny property used for capital contributions shall be evaluated and verified, and shall not be overvalued or undervalued.　Where
laws or administrative regulations provide otherwise, those provisions shall prevail. 

The amount of capital contributions made by all of the shareholders in currency shall not be less than 30 percent of the registered
capital of a company with limited liability. 

Article 28　A shareholder shall pay, on schedule and in full, the amount of the capital contributions subscribed for in accordance
with the provisions of the articles of association of a company. Where a shareholder makes capital contributions in currency, he
shall deposit the full amount of such capital contributions in currency in the bank account opened by the company with limited liability;
and where a shareholder makes capital contributions with non-corrency property, he shall, according to law, go through the formalities
for the transfer of his property rights. 

Where a shareholder fails to make capital contributions in accordance with the provisions of the preceding paragraph, in addition
to paying to the company of his portion of the capital contributions in full, he shall be liable for breach of contract towards the
shareholders who have, on schedule and in full, made their capital contributions. 

Article 29　After the shareholders have made their capital contributions, such capital contributions shall be subject to capital
verification by a capital verification authority set up according to law, which shall issue capital verification certificates. 

Article 30　After the initial capital contributions made by shareholders have been verified by a capital verification authority
set up according to law, a representative designated by all the shareholders or a proxy jointly entrusted by them shall submit to
the company registration authority such documents as a written application for registration of the company, the company’s articles
of association and the capital verification certificates, in order to apply for registration of the incorporation of the company. 

Article 31　Where after the incorporation of a company with limited liability, it is discovered that the actual amount of the value
of the non-currency property used as capital contributions for the incorporation of the company is obviously less than the amount
of the value prescribed in the company’s articles of association, the shareholders that made such contributions shall make up the
difference; and the others who are shareholders at the time of the incorporation of the company shall bear joint and several liability
therefor. 

Article 32　After a company with limited liability is incorporated, it shall issue investment certificates to its shareholders. 

In an investment certificate the following items shall be specified: 

(1) the name of the company; 

(2) the date on which the company is incorporated; 

(3) the registered capital of the company; 

(4) the name or post_title of the shareholder, the amount and date of capital contributions; and 

(5) the serial number of the investment certificate and the date of its verification and issue. 

An investment certificate shall bear the seal of the company. 

Article 33　A company with limited liability shall prepare a roster of its shareholders in which the following items shall be recorded: 

(1) the names or post_titles and domiciles of the shareholders; 

(2) the amounts of the capital contributions made by the shareholders; and 

(3) the serial numbers of their investment certificates. 

The shareholders recorded in the roster of the shareholders may claim to exercise their rights in such capacity on the basis of the
said roster. 

The company shall register with a company registration authority the names or post_titles of its shareholders and the amount of their
capital contributions; and where items of registration are altered, it shall have the registration altered accordingly. Without registration
or without registration for alteration, the company shall not act against the third party. 

Article 34　A shareholder shall have the right to consult and duplicate the company’s articles of association, the minutes of
the meeting of the shareholders assembly, the resolutions of the board of directors, the resolutions of the board of supervisors,
and the financial and accounting reports of the company. 

A shareholder may request to consult the accounting books of the company. To do that, the shareholder shall submit a written request
to the company and explain his purposes. Where the company deems, on reasonable grounds, that it is for illegitimate purposes that
the shareholder requests to consult its accounting books, which may damage the lawful interests of the company, the company may refuse
to provide its accounting books for the shareholder to consult, and shall, within 15 days from the date the shareholder submits the
written request, give a written reply to the shareholder and state its reasons. Where the company refuses to provide its accounting
books, the shareholder may request the people’s court to demand the company to provide such books. 

Article 35　Shareholders shall draw dividends in proportion to the capital contributions they made; and when a company increases
its capital, its shareholders shall have the right of first refusal to make their subscriptions in proportion to the capital contributions
they made, except where all the shareholders have agreed to draw the dividends not in proportion to their capital contributions or
to do without the right of first refusal in proportion to their capital contributions when making subscriptions. 

Article 36　Once a company is incorporated, its shareholders shall not secretly withdraw their capital contributions. 

Section 2　Organizational Structure 

Article 37　The shareholders assembly of a company with limited liability shall be composed of all of its shareholders. The shareholders
assembly is the organ of power of the company and shall exercise its functions and powers in accordance with this Law. 

Article 38　The shareholders assembly shall exercise the following functions and powers: 

(1) to decide on the operational policy and investment plan of the company; 

(2) to elect or replace directors and supervisors who are not representatives of the staff and workers, and to decide on　matters
concerning the remuneration of the directors and supervisors; 

(3) to examine and approve reports of the board of directors; 

(4) to examine and approve reports of the board of supervisors or the supervisors; 

(5) to examine and approve the annual financial budget plan and final accounts plan of the company; 

(6) to examine and approve the company’s plans for profit distribution and for making up losses; 

(7) to adopt resolutions on the increase or reduction of the registered capital of the company; 

(8) to adopt resolutions on the issue of corporate bonds; 

(9) to adopt resolutions on the merger, division, dissolution, liquidation or transformation of the company; 

(10) to amend the articles of association of the company; and 

(11) other functions and powers provided for in the company’s　　　articles of association. 

Where the shareholders express, in writing, their unanimous agreement on the matters specified in the preceding paragraph, they may
directly make a decision without convening a meeting of the shareholders assembly, and all the shareholders shall sign their names
on and affix their seals to the documents of the decision. 

Article 39　The first meeting of the shareholders assembly of a company shall be convened and presided over by the shareholder who
has made the greatest capital contributions to the company, and he shall exercise the functions and powers in accordance with the
provisions of this Law. 

Article 40　The meetings of the shareholders assembly shall be divided into regular meetings and interim meetings. 

Regular meetings shall be convened on schedule as specified by the provisions of the company’s articles of association. An interim
meeting shall be convened when it is proposed by shareholders representing one-tenth or more of the voting rights, by one-third or
more of the directors, by the board of supervisors, or by the supervisors of a company without a board of supervisors. 

Article 41　Where a board of directors is set up in a company with limited liability, the meeting of the shareholders assembly shall
be convened by the board of directors and presided over by the chairman of the board of directors; where the chairman of the board
cannot perform such function or fails to do so, the meeting shall be presided over by the vice-chairman of the board; and where the
vice-chairman cannot perform the function or fails to do so, the meeting shall be presided over by a director jointly elected by
half and more of the directors. 

Where no board of directors is set up in a company with limited liability, the meeting of the shareholders assembly shall be convened
and presided over by the executive director. 

Where a board of directors or the executive director cannot perform or fails to perform the duty of convening a meeting the shareholders
assembly, such a meeting shall be convened and presided over by a board of supervisors or the supervisor of a company where no board
of supervisors is set up; and where the board of supervisors or the supervisor fails to convene and preside over the meeting, the
shareholder representing one-tenth or more of the voting rights may convene and preside over such a meeting on his own. 

Article 42　All the shareholders shall be notified 15 days prior to the convening of a meeting of the shareholders assembly, except
where otherwise provided for by the company’s articles of association or agreed upon by all of the shareholders. 

The shareholders assembly shall keep minutes of the decisions that are made on the matters discussed at the meeting, and the shareholders
present at the meeting shall sign the minutes. 

Article 43　Shareholders shall exercise their voting rights at a meeting of the shareholders assembly in proportion to their respective
capital contributions, except where otherwise provided for by the company’s articles of association. 

Article 44　The modes of meeting and voting procedures of the shareholders assembly shall, in addition to what is provided for in
this Law, be stipulated by the company’s articles of association. 

Resolutions made at a meeting of the shareholders assembly on amendment to the company’s articles of association, the increase
or reduction of the registered capital, or on the merger, division, dissolution or transformation of the company shall be subject
to adoption by the shareholders representing two-thirds or more of the voting rights. 

Article 45　A company with limited liability shall set up a board of directors, which shall be composed of 3 to 13 members, except
where otherwise provided for by Article 51 of this Law. 

The members of the board of directors of a company with limited liability that is incorporated with the investment of two or more
State-owned enterprises or two or more State-owned investment entities shall include representatives of the staff and workers of
the company; and the members of the board of directors of other companies with limited liability may include representatives of the
staff and workers of the companies. The representatives of the staff and workers on the board of directors shall be democratically
elected by the staff and workers of the company through the conference of the representatives of the staff and workers, the general
meeting of the staff and workers, or through other forms. 

A board of directors shall have a chairman and may have a vice-chairman. The measures for the election of the chairman and vice-chairman
of the board shall be stipulated by the company’s articles of association. 

Article 46　The term of office of a director shall be stipulated by the company’s articles of association, but each term of office
shall not exceed three years. A director may, if reelected upon expiration of his term of office, serve consecutive terms. 

Where no election is conducted in time before the expiration of the term of office of a director, or the number of the directors
is less than the statutory number due to the resignation of a director within his term of office, the existing director shall, before
the director-elect takes office, continue to perform his duty as a director in accordance with the provisions of laws, administrative
regulations or the company’s articles of association. 

Article 47　The board of directors shall be accountable to the shareholders assembly and exercise the following functions and powers: 

(1) to convene the meeting of the shareholders assembly, and to report on its work to the board; 

(2) to implement the resolutions adopted by the shareholders assembly; 

(3)

MEASURES FOR THE INSPECTION ON IMPORTED VEHICLES

The State Administration for Entry and Exit Inspection and Quarantine

Order of the State Administration for Entry and Exit Inspection and Quarantine of the People’s Republic of China

No.1

The Measures for the Inspection on Imported Vehicles are hereby promulgated, and shall come into force as of Jan.1,2000.

Director general of the State Administration for Entry and Exit Inspection and Quarantine Li Changjiang

November 22,1999

Measures for the Inspection on Imported Vehicles

Article 1

These Measures have been formulated in accordance with the Law of the People’s Republic of China on the Inspection of Imported and
Exported Commodities and the corresponding implementing rules for the purpose of enhancing the administration of inspection on imported
vehicles.

Article 2

The State Administration for the Entry and Exit Inspection and Quarantine (hereinafter referred to as State Administration for Inspection
and Quarantine) shall be in charge of the inspection on imported vehicles throughout the country. Entry and exit inspection offices
shall be in charge of the inspection on imported vehicles within the quality guarantee period.

Article 3

When imported vehicles are transferred to the inland, the clearance location shall be regarded as the customs port. Inspection shall
be conducted by inspection offices of the port in accordance with These Measures.

Article 4

After imported vehicles have been transported to the customs port, the consignee or his agents shall make inspection application to
the port inspection offices for inspection, subject to the submission of contracts, invoices, bills of lading, packing lists and
other relevant certificates and technical materials. After checking and approving, the customs inspection offices shall issue “a
clearance note for entry”.

Article 5

Inspections on imported vehicles conducted by the customs port inspection offices shall include the inspection of ordinary items,
safety performance and quality.

Article 6

In the inspection of ordinary items, the safety symbols of imported vehicles shall be checked one by one upon their entry into the
territory. The items for inspection shall include the specifications, models, quality, appearance, utensil attached to the vehicle,
spare parts of technical materials, etc..

Article 7

Safety inspection shall be conducted in accordance with the laws, regulations and mandatory criteria on safety and environment protection,
and the Procedures for Safety Inspection on Imported and Exported Vehicles (SN/T0792-1999).

Article 8

For the quality inspection, the inspection, the criteria and method to be applied shall be stipulated in the contract or its Attachment.
When there is no such stipulation in import contract or the stipulation is not clear, the Procedures for Quality Inspection on Imported
and Exported Vehicles (SN/T0971-1999) shall be applied. When importing for the first time more than 300 new brand vehicles by the
gross (including 300 vehicles, calculated on the basis of the same contract, the same brand and the same producer) or the imported
value is more than US$ 1 million (including US$1 million), quality inspection must be conducted. When importing fewer than 300 new
brand vehicles or the imported value is less than US $1 million, or importing new brand vehicles after the first time, quality inspection
may be conducted on samples by inspection and quarantine offices according to the conditions of quality.

Quality inspection results shall be reported to State administration of Inspection and Quarantine and other competent relevant inspection
and quarantine offices.

Article 9

Inspection on imported vehicles shall be conducted by the inspection and quarantine offices independently or jointly with other agencies
or by the inspection agencies authorized by inspection and quarantine offices. Inspection certificates shall be issued by the inspection
and quarantine offices.

Article 10

In foreign trade contracts, foreign trade units and administrative units of receivers or users of imported vehicles shall stipulate
the pre-inspection, supervision on production or shipping before a large number of imported vehicles are shipped in exporting country.
When necessary, inspection and quarantine offices may send their staff to participate in or organize such inspection in exporting
country.

Article 11

Customs port inspection and quarantine offices shall issue !0certificate of inspection and quarantine on imported goods to inspection
qualified imported vehicles, and each vehicle shall be issued inspection card attached to imported motor vehicle when quality inspection
on imported vehicles is conducted. The quality inspection report shall be annexed to “certificate of inspection and quarantine on
imported goods”.

In the event that the vehicles could not pass the inspection, the inspection and quarantine office shall issue a certificate of inspection
and quarantine so that it may be used for claim from the providers.

Article 12

Sellers of imported vehicles shall go through the formalities of registration with local industrial and commercial administrations
for the sale of imported vehicles within the territory, subject to the submission of “inspection card attached to imported motor
vehicle” issued by inspection and quarantine offices and other relevant certificates.

Article 13

When purchasing imported vehicles within the country, users must obtain “an inspection card attached to imported motor vehicle” issued
by the inspection and quarantine offices and invoices of purchase of vehicles. Before applying for formal vehicle licenses, users
shall be registered for inspection at local inspection and quarantine offices so as to obtain “a certificate of inspection on imported
motor vehicle” which can be used as proof of getting formal licenses from vehicle administrative departments.

Article 14

Within the quality guarantee period, if users find quality problems in registered imported vehicles, they shall ask local inspection
and quarantine offices to inspect these vehicles and issue certificates.

Article 15

All inspection and quarantine bureaus directly under State Administration of Inspection and Quarantine may, when necessary, authorize
or appoint an eligible vehicle testing line to conduct safety inspections on imported vehicles and report to the State Administration
of Inspection and Quarantine for record. The State Administration of Inspection and Quarantine may supervise the tests and management
capacities of these testing lines by random checking.

Article 16

Inspection and quarantine offices shall handle with any imported vehicle without a safe import quality license, or any vehicle having
safe import quality license but without inspection and quarantine safety symbols, or any vehicle having not been inspected nor registered
in accordance with These Measures pursuant to the Law of the People’s Republic of China on the Inspection of Imported and Exported
Commodities and its corresponding Measures for Implementation.

Article 17

Inspection on imported motorcycles and other imported motor vehicles shall be conducted by local inspection and quarantine offices
of the place where the consignee reside with reference to These Measures.

Article 18

All inspection and quarantine offices directly under the State Administration of Inspection and Quarantine shall send quality analyses
on imported vehicles to the State Administration every six months, before July 15th and January 15th of the next year.

Article 19

The right of interpretation of These Measures shall remain with the State administration of Inspection and Quarantine.

Article 20

These Measures shall enter into force as of January 1st, 2000. The Circular of the State Administration of Inspection and Quarantine
Concerning Carrying out the Sprite of the National Conference on the Inspection of Vehicles for Export and Import (GuoJianYan [1990]
No.468) and the Circular Concerning “the Implementation of the New Approach for Inspection of Imported Motor Vehicle” and “the Uniform
Making of the Special Seal for Inspection of Imported Vehicles” (GuoJianYan [1994] No.30) as previously issued by the State Administration
shall be repealed simultaneously.

 
The State Administration for Entry and Exit Inspection and Quarantine
1999-11-22

 



CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE CONCERNING PRINTING AND DISTRIBUTING THE OPERATIONAL PROCEDURES FOR THE SALES OF AND PAYMENTS IN FOREIGN EXCHANGE AND VERIFICATION OF EXPORT RECEIPTS AND IMPORT PAYMENTS UNDER THE ITEM OF TRANSFER-BETWEEN-FACTORIES DURING FURTHER PROCESSING

The State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange Concerning Printing and Distributing the Operational Procedures for the Sales
of and Payments in Foreign Exchange and Verification of Export Receipts and Import Payments under the Item of Transfer-between-factories
during Further Processing

Huifa [1999] No.78

March 5,1999

(The circular is omitted here) Attachment:Operational Procedures for the Sales of and Payments in Foreign Exchange and Verification of Export Receipts and Import Payments under
the Item of Transfer-between-factories during Further Processing

In order to standardize the administration of the sales of and payments in foreign exchange under the item of transfer between factories
during further processing, relevant specific operational procedures are hereby stipulated as follows:

1.

In the case of supplied materials approved by Customs to be replaced by imported materials, the transferring-in enterprises are supposed
to conduct the sales of and payments in foreign exchange through DFEBs. DFEBs are supposed to make the sales of and payments in foreign
exchange for transferring-in enterprises against the following documents and to keep properly the documents evidencing the sales
of and payments in foreign exchange for five years for future examination:

(1)

Original declaration form of import goods attached with anti- falsification tag and affixed with Customs’ “proof seal” with the country
(region) of dispatch marked as “People’s Republic of China(142)” and the mode of trade marked as “further processing with imported
materials (0654)”, which is verified as authentic;

(2)

Copy of the transferring-out enterprise’s original declaration form of export goods attached with anti-falsification tag and affixed
with Customs’ “proof seal” with the country (region) of destination marked as “People’s Republic of China (142)” and the mode of
trade marked as “transfer of supplied materials (0255)”;

(3)

Transfer-between-factories contract;

(4)

Verification form of import payments of exchange.

The transferring-in enterprises and transferring-out enterprises are supposed to carry out their procedures of verification of import
payment and export receipts of exchange respectively.

2.

In the case of the imported materials approved by Customs to be replaced by imported materials, DFEBs are supposed to process relevant
procedures of the sales of and payments in foreign exchange or of domestic remittance of exchange for transferring-in enterprises
against the following documents and to keep properly the documents evidencing the sales of and payments in foreign exchange and the
remittance for five years for future examination:

(1)

Original declaration form of import goods attached with anti- falsification tag and affixed with Customs’ “proof seal” with the country
(region) of dispatch marked as “People’s Republic of China(142)” and the mode of trade marked as “further processing with imported
materials (0654)”, which is verified as authentic;

(2)

Copy of the transferring-out enterprise’s original declaration form of export goods attached with anti-falsification tag and affixed
with Customs’ “proof seal” with the country (region) of destination marked as “People’s Republic of China (142)” and the mode of
trade marked as “further processing with imported materials (0654)”;

(3)

Copy of the transferring-out enterprise’s original verification form of export receipts of exchange affixed with Customs, “proof seal”;

(4)

Transfer-between-factories contract;

(5)

Verification form of import payment of exchange.

The transferring-in enterprises and transferring-out enterprises are supposed to carry out their procedures of verification of import
payment and receipts of exchange respectively.

3.

In the case of the processing with supplied materials being changed as goods for domestic sale, DFEBs are supposed to carry out relevant
procedures of sales of and payments in foreign exchange for enterprises withdrawing export goods for domestic sale against following
documents and to keep properly the documents evidencing the sales of and payments in foreign exchange for five years for future examination:

(1)

Original declaration form of import goods attached with anti- falsification tag and affixed with Customs’ “proof seal” with the country
(region) of dispatch marked as “People’s Republic of China(142)” and the mode of trade marked as “supplied materials and components
for domestic sale (0425)” or “finished products made of supplied materials withdrawn for domestic sale (0345)”, which is verified
as authentic;

(2)

Approval documents for domestic sale issued by the competent authority of foreign economic and trade;

(3)

Relevant contract(s);

(4)

Verification form of import payments of exchange.

4.

DFEBs are supposed not to conduct out sales of and payments in foreign exchange and domestic remittance of exchange under the further
processing transfer-between-factories for their customers in other means.

5.

When DFEBs carry out settlement in respect of transfer-between- factories for enterprises with foreign investment, they are supposed
to make the external payments or the domestic remittance of exchange first with the exchange in own foreign exchange accounts of
enterprises with foreign investment and to sell exchange to FEES for the deficiency only if the payments exceed the balance of accounts
of enterprises with foreign investment.

6.

With respect to the exchange remitted domestically, the deposit bank of the transferring-in enterprise is supposed to mark the expression
of “domestic remittance in transfer-between-factories” when remitting out exchange, the deposit bank of transferring-out enterprises
of materials and components, upon receipt of exchange remitted domestically into its account, is supposed to carry out purchase of
exchange or to keep it in the customer’s accounts in accordance with “Rules for the Implementation of Regulations on Verification
and Cancellation of Foreign Exchange Export Proceeds Collection” and other relevant regulations against the enterprise’s original
verification form of foreign export proceeds collection affixed with Customs’ “proof seal”, and to issue “special copy for verification
of foreign exchange export proceeds collection” as well as to mark the expression of “domestic remittance for transfer between factories”
and the name of the transferring-in enterprise in the “Memorandum” column.

Transferring-out enterprise is supposed to carry out the procedures of verification in SAFE and its branches with the above “special
copy for verification of foreign exchange export proceeds collection”. SAFE, upon verifying, is suppose to check carefully the name
of the transferring-in enterprise in the “special copy for verification of foreign exchange export proceeds collection” against the
name of the transferring-in enterprise in the declaration form and to make clear whether they are consistent with each other.

In the event enterprises make verification by the way of offsetting, SAFE is supposed to check the declaration forms of import or
export goods against Customs’ electronic data and, if there is no discrepancies, to affix the seal of “verified” into the declaration
form of import goods, and carry out the verification of foreign exchange export proceeds collection and to keep the declaration forms
along with the documents for the verification of foreign exchange export proceeds collection for five years for future examination.

7.

SAFE is supposed to inspect the enterprises engaged in the trade under the item of transfer-between-factories during further processing
on an irregular basis and to give penalties in accordance with relevant provisions to those enterprises violating this Operational
Procedures and other regulations of foreign exchange administration.

8.

These Operational Procedures shall enter into force as of March 15, 1999, and the interpretation hereof is supposed to be rested with
SAFE.

 
The State Administration of Foreign Exchange
1999-03-05

 



CIRCULAR OF THE STATE DEVELOPMENT PLANNING COMMISSION, THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION FOR ENTRY-EXIT INSPECTION AND QUARANTINE ON LOWERING THE CHARGING STANDARD OF THE QUALITY INSPECTION OF PROCESSING TRADE AND FOREIGN INVESTMENT PROPERTY APPRAISAL

Circular of the State Development Planning Commission, the Ministry of Finance and the State Administration for Entry-exit Inspection
and Quarantine on Lowering the Charging Standard of the Quality Inspection of Processing Trade and Foreign Investment Property Appraisal

JiJiaGe [1999] No.472
April 23, 1999

The price bureaus (commissions) and finance departments (bureaus) of various provinces, autonomous regions and municipalities directly
under the Central Government, the directly subordinate bureaus for import and export commodity inspection :

For the purpose of easing the burden of enterprises and supporting the expansion of exports of foreign trade, it is decided that the
charging standard of the quality inspection of processing trade and foreign investment property appraisal should be lowered temporarily,
the matter concerned is notified as follows:

I.

The quality inspection of processing trade

(I)

The charge for the quality inspection of the incoming materials processing goods is levied at 70% rate of the standard at present
prescribed by the state, the charge of co-test is levied at 35% rate of the standard at present prescribed by the state, the charge
of verification test is levied at 17.5% rate of the standard at present prescribed by the state .

The importing material of incoming material of processing trade is not imposed quality test at all.

(II)

The charge for the quality inspection of the exported goods of processing trade of incoming materials is levied at 70% rate of the
standard at present prescribed by the state, the charge of co-test is levied at 35% rate of the standard at present prescribed by
the state, verification inspection is levied at 17.5% rate of the standard at present prescribed by the state

II.

The appraisal of foreign investment property

(I)

the range of appraisal

The range of appraisal of foreign investment property is confined to the foreign-funded enterprises and various foreign compensation
trades. The overseas investors (Hong Kong, Macao and Taiwan included) invest by entity or the foreign-funded enterprises entrust
the investors abroad to purchase the property from abroad by the investment fund.

(II)

the charging standard

1.

charging 2.5￿￿f property value which is under 5 million dollars, changing from the original charge of 4￿￿3￿￿nd other various
rate of property value

2.

charging 2￿￿f property value which is between 5 million dollars and 10million dollars

3.

charging 1￿￿f property value which is between 10 million dollars and 0.1 billion dollars

4.

charging 0.5￿￿f property value which is between 0.1billion dollars and 0.15 billion dollars

5.

free of charge for the parts of the property value of over 0.15 billion dollars

(III)

There is no charge for quality inspection if the appraisal of foreign investment property and quality inspection are handled together.

III.

The hereinabove charging standard enter into force as of May 1, 1999.The hereinabove regulations cease execution until the new charging
standard of inspection and quarantine of the imports and exports of come out.



 
The State Development Planning Commission, the Ministry of Finance, the State Administration for Entry-exit Inspection
and Quarantine
1999-04-23

 






INTERPRETATION BY THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS REGARDING PARAGRAPH 4 IN ARTICLE 22 AND CATEGORY (3) OF PARAGRAPH 2 IN ARTICLE 24 OF THE BASIC LAW OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE’S REPUBLIC OF CHINA

Interpretation by the Standing Committee of the National People’s Congress Regarding Paragraph 4 in Article 22 and Category (3) of
Paragraph 2 in Article 24 of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China

(Adopted at the 10th Meeting of the Standing Committee of the Ninth National People’s Congress on June 26, 1999) 

At its 10th Meeting, the Standing Committee of the Ninth National People’s Congress discussed the State Council’s Proposal for Giving
an Interpretation to Paragraph 4 in Article 22 and Category (3) of Paragraph 2 in Article 24 of the Basic Law of the Hong Kong Special
Administrative Region of the People’s Republic of China.  It is in order to respond to the report submitted by the Chief Executive
of the Hong Kong Special Administrative Region in accordance with the relevant provisions of Article 43 and those of Category (2)
of Article 48 of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China that the State Council
has put forward the proposal. In view of the fact that the issue raised in the proposal concerns the interpretation of the relevant
articles of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China by the Court of Final
Appeal of the Hong Kong Special Administrative Region in its judgment made on January 29, 1999, that these provisions concern affairs
which are the responsibility of the Central Authorities and the relationship between the Central Authorities and the Hong Kong Special
Administrative Region, that the Court of Final Appeal, before making its judgment, failed to seek an interpretation of the provisions
from the Standing Committee of the National People’s Congress in accordance with the provisions of Paragraph 3 in Article 158 of
the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China and that the interpretation of the
Court of Final Appeal is not in conformity with the original legislative intent, the Standing Committee of the National People’s
Congress, after consulting its Committee for the Basic Law of the Hong Kong Special Administrative Region, decides to give the following
interpretations to the relevant provisions in the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic
of China in accordance with the provisions of Category (4) of Article 67 of the Constitution of the People’s Republic of China and
Paragraph 1 in Article 158 of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China: 

1.The provisions of Paragraph 4 in Article 22 of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic
of China ” for entry into the Hong Kong Special Administrative Region, people from other parts of China must apply for approval”,
mean that persons from provinces, autonomous regions and municipalities directly under the Central Government, including the children
of permanent residents of the Hong Kong Special Administrative Region born in the mainland with Chinese nationality, who request
to enter the Hong Kong Special Administrative Region with whatever reason shall, in accordance with the provisions of relevant laws
and administrative regulations of the State, apply for approval from the relevant government department in the place of their residence
and may only enter the Hong Kong Special Administrative Region with valid certificates issued by relevant authorities. It’s illegal
for any persons or children mentioned above to enter the Hong Kong Special Administrative Region without going through due approval
procedures in accordance with the provisions of relevant laws and administrative regulations of the State. 

2.The first three categories of Paragraph 2 in Article 24 of the Basic Law of the Hong Kong Special Administrative Region of the
People’s Republic of China provide:  ” The permanent residents of the Hong Kong Special Administrative Region shall be: 
(1) Chinese citizens born in Hong Kong before or after the establishment of the Hong Kong Special Administrative Region; (2) Chinese
citizens who have ordinarily resided in Hong Kong for a continuous period of not less than seven years before or after the establishment
of the Hong Kong Special Administrative Region; (3) Persons of Chinese nationality born outside Hong Kong of those residents listed
in categories (1) and (2)”.” Among these people, the persons provided for in Category (3) ” Persons of Chinese nationality born outside
Hong Kong of those residents listed in categories (1) and (2)” mean that those persons, at the time of their birth, no matter whether
they were born before or after the establishment of the Hong Kong Special Administrative Region, whose parents or whose fathers or
mothers are Chinese citizens as provided for in Category (1) or Category (2) of Paragraph 2 in Article 24 of the Basic Law of the
Hong Kong Special Administrative Region. The original legislative intent elucidated by this Interpretation and the original legislative
intent of the other categories of Paragraph 2 in Article 24 of the Basic Law of the Hong Kong Special Administrative Region have
been embodied in the Opinions on the Implementation of the Second Paragraph of Article 24 of the Basic Law of the Hong Kong Special
Administrative Region of the People’s Republic of China, which were adopted at the Fourth Plenary Meeting of the Preparatory Committee
for the Hong Kong Special Administrative Region of the National People’s Congress on August 10, 1996. 

After promulgation of this Interpretation, the courts of the Hong Kong Special Administrative Region shall, in applying the relevant
articles of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, follow this Interpretation.
This Interpretation does not affect the right of abode in the Hong Kong Special Administrative Region granted to the litigating party
in the case through the judgment made by the Court of Final Appeal of the Hong Kong Special Administrative Region on January 29,
1999. As to whether any other person conforms to the provisions of Category (3) of Paragraph 2 in Article 24 of the Basic Law of
the Hong Kong Special Administrative Region, the matter shall be decided according to this Interpretation.

Notice: All Rights Reserved to the Legislative Affairs Commission of the Standing Committee of the National People’s Congress.






REGULATIONS ON ADMINISTRATION OF TOUR GUIDES

Category  TOURISM Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1999-05-14 Effective Date  1999-10-01  


Regulations on Administration of Tour Guides



(Promulgated by Decree No. 263 of the State Council of the People’s Republic of China on May 14, 1999, and effective as of October 1,1999)

    Article 1  These Regulations are formulated in order to standardize tour-guiding activities, to protect the lawful rights and interests
of tourists and tour guides, and to promote the healthy development of tourism.

    Article 2  Tour guides mentioned in these Regulations refer to those who have obtained a Tour Guide Certificate according to these
Regulations, and accept appointment of a travel agency to provide tourists with guiding, introducing and other related tourism services.

    Article 3  The State exercises a system of nationwide uniform examination of qualification for tour guides.

    Any citizen of the People’s Republic of China, who has an academic degree conferred by a high school, a secondary
specialized school or higher, is in good health, and possesses basic knowledge and language skills catering to the needs of tour-guiding,
may take part in the examination for tour guide qualification; those who have passed the examination shall be issued a Tour Guide
Qualification Certificate by the tourism administration department of the State Council or the tourism administration departments
of the people’s governments of provinces, autonomous regions or municipalities directly under the Central Government delegated by
the tourism administration department of the State Council.

    Article 4  A Tour Guide Certificate shall be obtained in order to conduct tour-guiding activities within the territory of the People’s
Republic of China.

    Only after concluding a labor contract with a travel agency or registering with a tour guide service company,
may those with a Tour Guide Qualification Certificate apply to the tourism administration departments of the people’s governments
of provinces, autonomous regions or municipalities directly under the Central Government for obtaining a Tour Guide Certificate on
the strength of the labor contract and documents certifying the registration.

    For anyone who possesses the language skills of a special language but has not obtained a Tour Guide Certification
Certificate, if a travel agency needs to employ him to temporarily conduct tour-guiding activities, the travel agency shall apply
to the tourism administration departments of the people’s governments of provinces, autonomous regions or municipalities directly
under the Central Government for obtaining a Temporary Tour Guide Certificate for him.

    The design and format of Tour Guide Certificate and Temporary Tour Guide Certificate are laid down by the
tourism administrative departments of the State Council.

    Article 5  Anyone falling under any of the following circumstances shall not be issued with a Tour Guide Certificate:

    (1) having no capacity for civil conduct or having a limited capacity for civil conduct;

    (2) suffering from contagious diseases;

    (3) having received criminal punishment, except for involuntary crimes;

    (4) having ever been has Tour Guide Certificate revoked.

    Article 6  The tourism administration department of the people’s government of a province, autonomous region or municipality directly
under the Central Government shall issue Tour Guide Certificate within 15 days from the date of receiving application for obtaining
a Tour Guide Certificate; if it is found that any circumstance stipulated in Article 5 of these Regulations exists, therefore no
Tour Guide Certificate shall be issued, a written notice shall be send to the applicant.

    Article 7  Tour guides shall continuously improve their professional skills and ethics.

    The State exercises a system of grade testing system for tour guides. The standards and measures for grade
testing for tour guides are to be worked out by the tourism administration department of the State Council.

    Article 8  When conducting tour-guiding activities, tour guides shall bear their Tour Guide Certificate.

    The Tour Guide Certificate has a term of validity of 3 years. If the holder of a Tour Guide Certificate intends
to continue to conduct tour-guiding activities after the expiration of the term of validity, he shall, before 3 months of the expiration
of the term of validity, apply to the tourism administration department of a province, autonomous region or municipality directly
under the Central Government to undergo the procedures for reissue of a Tour Guide Certificate.

    The term of validity of a Temporary Tour Guide Certificate shall not be more than 3 months, and shall not
be renewed.

    Article 9  A tour guide must be appointed by a travel agency in order to conduct tour-guiding activities.

    A tour guide shall not privately contract to, or directly contract to in any other form, engage in tour business
and conduct tour-guiding activities.

    Article 10  When conducting tour-guiding activities, tour guides’ personal dignity shall be respected, and their personal safety shall
not be endangered.

    Tour guides are enpost_titled to refuse any unreasonable request that affronts their dignity or infringes their
professional ethics.

    Article 11  When conducting tour-guiding activities, tour guides shall conscientiously protect the interests of the State and national
dignity; any words and behaviors impairing the interests of the State or national dignity shall be avoided.

    Article 12  When conducting tour-guiding activities, tour guides shall obey professional ethics, dress decently, behave politely,
respect tourists’ religious belief, ethical customs and living habits.

    When conducting tour-guiding activities, tour guides shall give explanation to human and natural conditions
of the touring place, and make introduction into social customs and habits; however, they shall not mix any vulgar and indecent elements
into their explanation and introduction for catering to vulgar interests of some tourists.

    Article 13  Tour guides shall strictly follow the travel agency’s hosting plan to arrange tourists’ travel and sightseeing activities,
shall not arbitrarily add or reduce any tour items or cease his tour-guiding activities.

    In the cause of leading tourists to travel and sightsee, if encountering any emergent situations that possibly
endanger the tourists’ personal safety, the tour guide may, upon consent of the majority of tourists, adjust or modify the hosting
plan, but a prompt report shall be made to the travel agency.    

    Article 14  In the cause of leading tourists to travel and sightsee, the tour guide shall truthfully state the situations that possibly
endanger the tourists’ personal or property safety and give clear warnings to the tourists, and shall adopt measures to prevent the
occurrence of the danger according to the travel agency’s instructions.

    Article 15  When conducting tour-guiding activities, tour guides shall not sell any goods to or buy any goods from tourists, nor seek
tips for tourists in explicit or implied ways.

    Article 16  When conducting tour-guiding activities, tour guides shall not deceive or force tourists to consume or collude with proprietors
to deceive or force tourists to consume.

    Article 17  For an act of a tour guide violating the provisions of these Regulations, tourists are enpost_titled to file a complaint towards
the tourism administration departments.

    Article 18  For anyone who conducts tour-guiding activities without a Tour Guide Certificate, the tourism administration department
shall order him to make corrections and make the matter public, and impose a fine of not less than 1,000 yuan nor more than 30,000
yuan; if there are illegal earnings, such illegal earnings shall be confiscated.

    Article 19  If, without appointment of the travel agency, a tour guide conduct tour-guiding activities by privately contracting to,
or directly contracting to in any other form, engage in tour business, the tourism administration department shall order him to make
corrections, and impose a fine of not less than 1,000 yuan nor more than 30,000 yuan; if there are illegal earnings, such illegal
earnings shall be confiscated; if the circumstances are serious, the Tourism administration department of the people’s government
of a province, autonomous region or municipality directly under the Central Government shall revoke his Tour Guide Certificate and
make the matter public.

    Article 20  If, when conducting tour-guiding activities, a tour guide has any words and behaviors impairing the interests of the State
or national dignity, the tourism administration department shall order him to make corrections; if the circumstances are serious,
the Tourism administration department of the people’s government of a province, autonomous region or municipality directly under
the Central Government shall revoke his Tour Guide Certificate and make the matter public; the travel agency to which the tour guide
in question belongs to shall be given a warning, and even have its business suspended for rectification.

    Article 21  If, when conducting tour-guiding activities, a tour guide does not carry out his Tour Guide Certificate, the tourism administration
department shall order him to make corrections; if the making of correction is refused, a fine of not more than 500 yuan shall be
imposed.

    Article 22  If a tour guide falls under any of the following circumstances, the tourism administration department shall order him
to make corrections and temporarily revoke his Tour Guide Certificate for from 3 to 6 months; if the circumstances are serious, the
Tourism administration department of the people’s government of a province, autonomous region or municipality directly under the
Central Government shall revoke his Tour Guide Certificate and make the matter public:

    (1) arbitrarily adding or reducing any tour items;

    (2) arbitrarily changing the hosting program;

    (3) arbitrarily ceasing his tour-guiding activities.

    Article 23  If, when conducting tour-guiding activities, a tour guides sells any goods to or buys any goods from tourists, or seek
tips for tourists in explicit or implied ways, the tourism administration department shall order him to make corrections and impose
a fine of not less than 1000 yuan nor more than 30,000 yuan; if there are illegal earnings, such illegal earnings shall be confiscated;
if the circumstances are serious, the Tourism administration department of the people’s government of a province, autonomous region
or municipality directly under the Central Government shall revoke his Tour Guide Certificate and make the matter public; the travel
agency appointing the tour guide in question shall be given a warning, and even have its business suspended for rectification.

    Article 24  If, when conducting tour-guiding activities, a tour guide deceives or forces tourists to consume or colludes with proprietors
to deceive or force tourists to consume, the tourism administration department shall order him to make corrections and impose a fine
of not less than 1000 yuan nor more than 30,000 yuan; if there are illegal earnings, such illegal earnings shall be confiscated;
if the circumstances are serious, the Tourism administration department of the people’s government of a province, autonomous region
or municipality directly under the Central Government shall revoke his Tour Guide Certificate and make the matter public; the travel
agency appointing the tour guide in question shall be given a warning, and even have its business suspended for rectification; if
a crime is constituted, criminal liability shall be investigated according to Law.

    Article 25  Any staff members of tourism administration departments who neglect their duties, abuse their powers, practise favoritism
for personal interests shall be investigated for criminal liabilities if crimes are constituted, or given administrative sanctions
if no crimes are constituted.

    Article 26  Measures for administration of tour guides in scenery sites or scenery zones are to be formulated by the people’s governments
of provinces, autonomous regions and municipalities directly under the Central Government by reference to these Regulations.

    Article 27  These Regulations take effect as of October 1, 1999. The Interim Measures for Administration of Tour Guides approved by
the State Council on November 14, 1987 and promulgated by the State Tourism Bureau on December 1, 1987 shall be repealed simultaneously.





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CONSTITUTION ACT, 1982 – page 22

NOTES (1) The enacting clause was repealed by the Statute Law Revision Act, 1893, 56-57 Vict., c. 14 (U.K.). It read as...

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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