Global Trade Alert

On 26 April 2012, the Ministry of Commerce (MOFCOM) of the People's Republic of China released the Supplementary Provisions V on the Administration Measures on Foreign Investment in the Commercial Sector. In accordance with those provisions, investors from Hong Kong and Macau who have opened 30 or more stores in mainland China for the sale of grains from different suppliers are now allowed to set up wholly foreign owned enterprises (WFOEs) within the Guangdong province. Investors from other foreign countries are still not allowed to set up WFOEs inChina (including Guangdong province). Those investors can only set up Sino-foreignjoint ventures with a shareholding ratio not exceeding 49 per cent. The latter also applies to investors from Hong Kong and Macau outside theGuangdong province.