Committee of Foreign Economic Relations and Trade of each district or county, Administration Committee of Pudong New District, Administration Committee of Waigaoqiao bonded area, each holding company, Caohebang development zone and Minhang development zone:

In order to meet the requirements of the 73rd document (1999) of the General Office of State Council and in order to simplify the procedures of examining and approving the establishment of foreign investment project and foreign company and speed up the process of examination and approval, the following suggestions are being put forward:

Firstly, all the investment projects of the foreign business that are established in the development zone at the national level, such as Pudong New District and the nine development zones of Shanghai City, such as Songjiang (except those projects which are restricted, forbidden or concerned with license administration or right of special permission), if the amount of money is no more than $300,000,000, can be examined and approved by the local district or county government and Administration Committee. The examination and approval of plausible research report can also be simplified: the plausible research report can be used in place of the project suggestion article; the industry and commerce department checks the name of the company according to the approval of the department which has given examination and approval; the department of examination and approval should fulfill its task at one time; the applying company should go to the industry and commerce department to register after getting the instrument of ratification. Procedures concerning applying for exempting from taxation of the equipment are the same as before: the Foreign Investment Committee of Shanghai Municipal is in charge of it.

Secondly, the companies of foreign investment which are established in the Waigaoqiao bonded zone and the special area which is permitted by the Municipal government, Zhangjiang development zone (except those projects which are restricted or those which are concerned with license administration, trade administration and right of special permission), if possible, can try out the method of registering and putting on record. The ratification certificate for the foreign investment will be gratified with the license. The Administration Committee of Pudong New District and Administration Committee of Waigaoqiao bonded zone and concerned departments should put forward the detailed rules of carrying out the suggestions we mentioned above and report to us for the record and then try them out.

Thirdly, each district, county and holding company should examine and approve applications according to the now available rights of examination and approval. And the examination and approval towards those projects which are encouraged by the government and the amount of money of the investment is less than $50,000,000 can be simplified (one time fulfillment).

Fourthly, those industrial projects which are encouraged by the government and the amount of money of investment is more than $300,000,000 should be jointly examined by the Foreign Investment Committee, Planning Committee and Economic Committee and ratified by the Foreign Investment Committee.

Fifthly, the principle that those who ratify the application should be responsible for it should be carried out. From now on, the files that are examined and approved by the district and county should be faxed to the Municipal Foreign Investment Committee for the record within three days (weekends are not counted). If there is no response from the Municipal Foreign Investment Committee three days after the fax being made, the file is approved.

Sixthly, investment-oriented company can invest in other projects that are encouraged or permitted by the government after it has handed in the registered capital. If the foreign exchange investment is more than 25% of the registered capital or with the help of other foreign investors the amount of the money of the foreign exchange investment is more than 25% and the investment of this company is more than 10% of the total amount, the examination and approval will be fulfilled by the concerning department according to its rights.

Seventhly, each examination and approval department should fulfill its duty according to the law and the “Instructing Catalogue of the Foreign Investment Trade”. While ensuring the economic security and economic planning and environmental protection, the examination and approval department should neither make big project smaller nor enlarge the industrial development zone. The foreign investment projects that are more than $10 million should be reported immediately. And the Foreign Investment Committee and Planning Committee and Economic Committee will put it into the information network of foreign investment employment.

Eighthly, as for the investment company, foreign investment limited enterprises and foreign investment enterprises that has changed into joint ventures and restricted enterprises, the examination and approval of the license will still be carried out by the Foreign Investment Committee, so will the administration on them.

Shanghai Foreign Investment Committee
                                                                                 Shanghai Planning Committee
                                                                                 Shanghai Economic Committee