ANNOUNCEMENT 12 Dec 2011In December 2011, the government of China announced altered domestic business conditions for foreign investors.
NUMBER OF INTERVENTIONS
On 12 December 2011, the Ministry of Commerce issued Article No. 5 of 2011, replacing the previous Article No. 15 of 2007 with the new "Administrative Measures for the Record Filing of Commercial Franchises." This new commercial franchise measure will be effective on 1 February 2012.
According to the Article No. 5 of 2011, foreign companies with general "operation activities by means of franchising" in their business scope and the "Certification of Foreign Investment Approval" from the authority concerns are now allowed to conduct franchise business activities in China.
Previously, foreign enterprise wishing to operate franchise business were restricted in China, according to the 2007 Industry Catalogue for Guidance of Foreign Investments. Foreign companies should go through several approval processes by providing specific franchising information in their business scope, in order to get approved to establish their business in China. In 2011, the Ministry of Commerce revised the Industry Catalogue for Guidance of Foreign Investments, and removed the frachising activities from the restriction list.
The affected trading partner are selected based on the 2011 FDI statistic of Ministry of Commerce. These top 10 countries account for 91.6% of the 2011 FDI in China.