The main issues are as follows:
¡¤ FIE branches and liaison offices The company registration authority will no longer accept registration of liaison offices of FIEs. Existing liaison offices should be either de-registered or upgraded to branches upon expiration of their business licenses. Branches of FIEs can engage in liaison and consulting business within the business scope of FIEs. The registration procedure for establishment and de-registration of branches has been simplified. ¡¤ Schedule for capital contribution The first instalment of capital contribution should be at least 15 percent of registered capital, and must be injected within 3 months since its establishment. For capital increases, the first instalment should amount to at least 20 percent of the increment in registered capital. ¡¤ Cash contribution by foreign investors Loans borrowed in the name of a foreign shareholder are deemed to be self-owned funds of the shareholder and can be used as capital contribution to an FIE. ¡¤ Time limit for submitting applications for registration Newly established Equity Joint Ventures should register with the company registration authority within 90 days of approval. The time limit for Contractual Joint Ventures and Wholly Foreign-Owned Enterprises (WFOEs) is 30 days. ¡¤ WFOEs with a sole shareholder WFOEs set up by a single investor should follow the "sole shareholder company" rule provided in the new Company Law with respect to minimum registered capital. WFOEs set up by a single individual should abide by additional requirements applicable to a sole shareholder company according to the new Company Law when making re-investment in China. ¡¤ Additional documentation required for approval and registration Additional documents are required for the registration of new FIEs, including the original attestation documents from overseas notarization authorities and the relevant Chinese Embassy certifying the identity of the foreign investor, and a Power of Attorney on Delivery of Legal Documents entered into between the foreign investor and its authorized agent.
