1. What’s a natural person?
A: An individual enjoying civil rights and assuming civil obligations in accordance with the laws after born. Each of us is a natural person. When we open a shop and do business in the name of an individual, the boss is a natural person (individual investor).

2. What’s a legal representative？
A: Legal representative: an organization incorporated by law and exercising rights and assuming obligations in one’s own name. It is not an independent legal concept. A legal representative is a natural person. The legal representative of a company is sole. A natural person can act as the legal representative of different companies.

3. What’s distribution？
A: it is a course from the product production to purchase of the user, a course completing sale of the product relying on the external resources.

4. What businesses of a domestic company need approval from the science, industry, trade and information technology Commission?
A: The trade company (wholesale, import and export) needs to register with the science, industry, trade and information technology Commission; the manufacturing company (self-manufacturing) needs to register with the administration for industry and commerce for the goods export. The domestic companies which have been approved for the import and export license can import and export directly. If not, it needs to fill in the foreign trade dealer registration form.

5. What’s a proportion of shares that a foreign investor holds in a domestic company if the company can be called a foreign-funded company?
A: if the foreign investor holds 25% or above of shares of the domestic company, the company can be called a foreign-funded company. Please refer to the Law of the Peoples Republic of China on Chinese-Foreign Equity Joint Ventures for details.

6. What’s a foreign-funded enterprise? What are modes of foreign-funded companies?
A: A foreign-funded company refers to a company wholly funded and operated by foreign investors in the territory of China in accordance with laws of China, excluding the branches and offices set up by foreign companies or other economic organizations in China. It can be divided into an enterprise jointly funded by foreign investors and domestic investors and an enterprise wholly funded by foreign investors.

7. What’s China-foreign equity joint venture enterprise?
A: it refers to a limited company jointly invested and operated by the Chinese party and the foreign party on the basis of the contract signed by and between them, which set up the board of directors and create the articles of association, operate the joint venture, share risks, enjoy profits and are liable for losses of the company jointly.

8. What’s a China-foreign contractual joint venture?
A: It refers to an enterprise incorporated in the territory of China by law with joint investment from the Chinese party and the foreign party on the basis of the contract signed by and between both parties.

9. What company does the foreign wholly-owned enterprise refer to?
A: it refers to an enterprise invested by an overseas investor which can be a foreign enterprise, other economic organization or natural person, i.e. individual investor.

10. What’s a foreign investment company limited by shares?
A: a foreign investment company limited by shares refers to an enterprise legal person incorporated in accordance with the Company Law, that the capital consists of equal shares which are owned by both the Chinese shareholders and foreign shareholders, the shareholders shall assume liability towards the company to the extent of their respective shareholdings and the company shall be liable for its debts to the extent of all its assets.

11. What’s a foreign joint venture company?
A: it refers to a company invested by two or more overseas investors and all the capitals of the company are offered by the foreign investors, i.e. multiple investors.

12. Under which condition a natural person of China can become a shareholder of a China-foreign equity joint venture enterprise?
A: a foreign investment company limited by shares refers to an enterprise legal person incorporated in accordance with the Company Law, that the capital consists of equal shares which are owned by both the Chinese shareholders and foreign shareholders, the shareholders shall assume liability towards the company to the extent of their respective shareholdings and the company shall be liable for its debts to the extent of all its assets.

13. What procedures can be handled with the sub-committees of science, industry, trade and information technology? What procedures must be handled with the science, industry, trade and information technology Commission?
A: the manufacturing enterprises without wholesale, import and export businesses, R&D enterprises, consulting enterprises, of which the total investment is below 30 million yuan, can handle the relevant procedures with the district bureau of trade and industry; in the event the total investment is above 30 million yuan and the enterprises involve in wholesale and export and import, the enterprises must come to the science, industry, trade and information technology Commission for the relevant review and approval.

14. Is there any limitation on the registered capital of the enterprises in the catalogue of encourage, in the catalogue of restricted projects or in the catalogue of non-restricted project?
A: Please refer to the Company Law and the relevant laws and regulations on limitation on the registered capital of different enterprises.

15. How to fill in the Counterfoil of Approval Certificate for Establishment of Enterprises with Foreign Investment (Taiwan, Hong Kong, Macao) in China, if a foreign investment enterprise needs the alteration approval?
A: if for the review and approval of the alteration of the foreign investment enterprises, only the alteration item is needed to be completed and no detail is needed for the rest items.

16. What’s an enterprise with encouraged projects, enterprise with permitted projects and the enterprise with restricted projects?
A: Please refer to the Provisions on Guiding the Orientation of Foreign Investment.

17. What’s equity merger and acquisition? Equity transfer?
A: the activity that a foreign company or foreigner acquires the domestic enterprise is called the equity merger and acquisition. (1) Investment participation: foreign investors invest in the domestic enterprise and change the enterprise into a China-foreign joint venture enterprise. Acquisition of a part of equity must be approved by the foreign investment department. (2)Establishment of a new company: foreign investors set up a new company in the territory of China, which is named foreign invested enterprise. (3) Foreign joint venture company: an overseas company and a domestic company establish a company jointly.

18. Can an individual set up a company in the territory of China?
A: an individual is not allowed to set up a company in the territory of China in the name of the individual. A foreigner can set up a company in his/her name. Foreign investors can set up a China-foreign equity joint venture enterprise with domestic companies.

19. How to set up a foreign capital enterprise?
A: First come to the administration of market supervision for the pre-approval of the enterprise name and the organization certificate code, then get approval from the science, industry, trade and information technology Commission and the written approval file and approval certificate (You can find the details in the administrative permit on the website of the science, industry, trade and information technology Commission). Then you will come to the administration of market supervision, the taxation bureau and the customs for registration and other procedures.

20. If the registered capital of a newly applied enterprise is 8 million yuan, how to calculate the commission fee?
A: It is free of charge for approval from the science, industry, trade and information technology Commission. All the fees are charged by the administration for industry and commerce.

21. If a citizen asks why he has not received any reply since he has submitted the materials required to the science, industry, trade and information technology Commission?
A: The science, industry, trade and information technology Commission will complete review and approval within 30 days upon receiving all the materials needed.