In order to accurately apply laws, carry on examination, approval, registration, management of foreign investments on standardized, convenient and efficient basis, promote enterprises with foreign investments to properly develop, and improve the quality and level of the People’s Republic of China utilizing foreign investments, we offer the following enforcement opinions on how examination, approval, registration and management of companies with foreign Investment apply the Companies Law of the People’s Republic of China (hereinafter called as Companies Law), Regulations for Registration Management of Companies of the People’s Republic of China (hereinafter called as Regulations for Registration Management of Companies) as well as laws, administrative regulations and rules and policies of the People’s Republic of China involved with foreign investment.

Article 1 Registration management of companies with foreign investment is applicable to Companies Law and Regulations for Registration Management of Companies; if the laws relating with enterprises with foreign investments have separate regulations, it shall be applicable to these regulations; if the Companies Law, Regulations for Registration Management of Companies and other laws relating with enterprises with foreign investment have no provisions, it shall be applicable to administrative regulations and rules relating with enterprises with foreign investment, order of the Council of State and other regulations of the People’s Republic of China relating with foreign investment.

Article 2 Foreign Companies, enterprises and other economic organizations or natural persons (hereinafter called as foreign investors) may establish companies with Chinese enterprises and other economic organizations by law in the manner of Sino-foreign joint venture or Sino-foreign cooperation, and also may establish companies by law in the manner of foreign joint venture or exclusively foreign – owned enterprise.

In the event that one-person limited company is established in the manner of exclusively foreign – owned enterprise, the least amount of its registered capital shall be in conformity with the provisions of the Companies Law on one-person limited company; if a foreign natural person establishes one-person limited company, it shall also be in accordance with the provisions of the Companies Law on limitation of external investment of one-person limited company. Any company with exclusively foreign-owned investment incorporated by law before January 1, 2006 will maintain unchangeable, but it shall be conformity with the above regulations while the registered capital and foreign investment are altered.

Article 3 The board of directors of a company of limited liability in Sino-foreign joint venture or Sino-foreign cooperation is the agency of power of the company, and its institution is regulated by the company with the articles of association according to the Law of Sino-Foreign Equity Joint Venture, Law of Sino-Foreign Cooperative Joint Venture and Companies Law.

The institution of foreign joint venture, exclusively foreign-owned company of limited liability and company limited with foreign investment shall be in accordance with the provisions of Companies Law and the articles of association.

Article 4 The application term of establishing registration of company with foreign investment shall be in accordance with the provisions of Regulations for Registration Management of Companies. However, if the company is established in the manner of Sino-foreign cooperative, foreign joint venture, exclusively foreign-owned enterprise, it shall apply for registration of establishment to the company registration organization within 30 days as of the date of receiving the approval document according to the provisions of Law of Sino-Foreign Cooperative Joint Venture and the Law on Foreign-capital Enterprises. If the application for registration of establishment is overdue, the applicant shall report the examination and approval authority to confirm the effectiveness of the previous approval document or separately report for approval.

Article 5 When the company applying for foreign investment submits the qualification certificate or identification certificate on subject of foreign investor to the examination, approval and registration authority while examination, approval and registration of establishment, such certificates shall be made notarization by the notarial authority in the host country and authenticated by the embassy or consulate of the People’s Republic of China in this country. The qualification certificate or identification certificate on subject of those investors based in Hong Kong, Macao and Taiwan shall be offered by law with notarial documents issued by the local notarial institution.

For examination, approval and registration of establishment of the company applying for foreign investment, besides it shall submit the corresponding documents according to article 20 or article 21 of Regulations on Registration Management of Companies, it shall also submit Authorization on Service of Legal Documents between the foreign investor (authorizer) and the recipient of service of domestic legal documents (the authorized person) to the examination, approval and registration authority. Such authorization shall clearly authorize the domestic authorized person to receive the service of legal documents and state the address, contact manner of the authorized person. The authorized person may be a branch established by a foreign investor, a company to be set up (if the authorized person is a company to be set up, the authorization will become effective when the company is set up) or relevant domestic organizations or individuals.

If a company adds any new foreign investor, it shall also submit the above documents to the examination, approval and registration authority.

When a company with foreign investment is applying for registration of establishment, alteration registration of transfer of stock rights to the company registration organization, it is not necessary to submit contract of joint venture or cooperative contract and credit certificate of the investor.

Article 6 The company registration organization shall, upon request, register the type of companies with foreign investment by law respectively “limited liability company” or “company limited”, and correspondingly add the word “(Sino-foreign equity joint venture)”, “(Sino-foreign cooperative)”, “(foreign joint venture)”, “exclusive investment by a foreign corporation”, “exclusive investment by a foreign non-corporation economic organization”, “(exclusive investment by a foreign natural person)”, “joint venture between any investor based in Taiwan, Hong Kong and Macao and any foreign investor”, “joint venture between any investor based in Taiwan, Hong Kong and Macao and any domestic investor”, “cooperative joint venture between any investor based in Taiwan, Hong Kong and Macao and any domestic investor”, “joint venture between investors based in Taiwan, Hong Kong and Macao”, “exclusive investment by corporations based in Taiwan, Hong Kong and Macao”, “exclusive investment by a non-corporation economic organization based in Taiwan, Hong Kong and Macao”, “exclusive investment by a natural person based in Taiwan, Hong Kong and Macao” after “limited liability company” according to its establishment manner, and correspondingly add “(joint venture, not listed)”, “(joint venture, listed)”, “(foreign joint venture, not listed)”, “(foreign joint venture, listed)”, “(joint venture between any investor based in Taiwan, Hong Kong and Macao and any foreign investor, not listed)”, “(joint venture between any investor based in Taiwan, Hong Kong and Macao and any foreign investor, listed)”, “(joint venture between any investor based in Taiwan, Hong Kong and Macao and any domestic investor, listed)”, “(joint venture between any investor based in Taiwan, Hong Kong and Macao and any domestic investor, not listed)”, “(joint venture between any investor based in Taiwan, Hong Kong and Macao, listed)” after “company limited”.

The company registration organization may add relevant classification mark after type of company according to the national industrial policies on utilizing foreign investments and their relevant regulations (for example, “the ratio of foreign investment below 25%”, “(merger and acquisition of share A)”, “(25% or more of merger and acquisition of share A )”, etc.).

For any company with foreign investment that was established before January 1, 2006, the company registration organization shall make corresponding modification according to the above regulations while alteration of registration.

Article 7 Any company with foreign investment may carry on domestic investment by law after establishment. The company registration organization will not issue relevant qualification certificate for domestic investment.

For a company with foreign investment, if its business license does not indicate the detailed type of company according to article 6 of these Opinions and it applies for establishing one-person limited company, the company registration organization will issue the certificate of “exclusive investment by non-natural person” therefor.

Article 8 The registered capital of a company with foreign investment may be shown in RMB or any foreign currency that may be convertible. The conversion between the foreign currency and RMB or between foreign currencies as registered capital of the company shall be calculated according to middle price of exchange rate declared by the People’s Bank of China on that date of occurrence (payment).

Article 9 The amount of first subscribed capital of the shareholders of a limited liability company with foreign investment (including one-person limited company) shall be in conformity with provisions of laws and administrative regulations, if the full amount of subscribed capital will be fully paid in one installment, such amount shall be fully paid within six months as of establishment date of the company; if the full amount will be fully paid in installments, the amount of first subscribed capital shall not be less than fifteen per cent of its amount of capital subscribed, or shall not be less than the lease limit of legal registered capital, and it shall be fully paid within three months as of establishment date of the company, and the subscription dates of the residual part shall be in accordance with the provisions of the Companies Law, laws relating with foreign investment and Regulations on Registration Management of Companies. If there are any other laws and administrative regulations and rules that require shareholders to fully pay the full amount of subscribed capital when the company is established, these provisions shall be bound.

The subscription of a company limited with foreign investment shall be in conformity with the provisions of the Companies Law.

Article 10 The subscription manner of the shareholders of a company with foreign investment shall be in conformity with article 27 of the Companies Law, Article 14 of Regulations on Registration Management of Companies and Regulations on Registration Management of Registered Capital of Companies. Before the State Administration for Industry and Commerce, Ministry of Commerce together with relevant authorities make regulations on subscription of properties other than currency, kind, intellectual property, right to the use of land, if shareholders subscribe capital with properties other than those properties listed in paragraph 2 of article 14 of Regulations on Registration Management of Companies, an assessment institution legally established at home shall make price evaluation, verify properties and shall not make higher or lower price evaluation. If subscription in paid-in manner, a capital verification institution legally established at home shall make capital verification and issue certificate for verification of capital.

If shareholders of a Sino-foreign equity joint venture limited liability company subscribe in kind (including equipment), industrial property right and other non-monetary properties (except right to the use of land) as regulated in the Law of Sino-Foreign Equity Joint Venture, their prices may be appraised and agreed by the parties to the joint venture.

Article 11 The capital raised by a shareholder of a company with foreign investment in his name through loan or in other manners, after a capital verification institution has issued the certificate for verification of capital, may be deemed as the subscription of such shareholder.

Article 12 The term for a company with foreign investment applying for alteration of registration shall be in conformity with the provisions of Regulations on Registration Management of Companies. If laws, administrative regulations and rules or the state council decide that the company and the Registration items of the company shall be approved before alteration of registration, it shall apply for transacting alteration of registration within 30 days as of approval date of examination and approval authority. If the application is overdue, the applicant shall report the previous examination and approval authority to confirm the effectiveness of the approval document or separately report for approval.

Article 13 A company with foreign investment, if applying for alteration of registration, shall submit corresponding documents according to the provisions of article 27, 29, 31, 32, 33, 34 and 35 of Regulations on Registration Management of Companies. If the alteration of relevant registration items is made in following circumstances, it shall submit the examination and approval document of previous examination and approval authority and approval certificate after alteration:

(1) Registered capital;

(2) Type of company;

(3) Scope of business;

(4) Term of business;

(5) The amount of capital subscribed by shareholder or initiators, subscription manner;

(6) Merger and split of a company with foreign investment;

(7) Alteration of address under administration of several examination and approval authorities;

(8) Transfer of stock ownership of a limited liability company or transfer of shares of a company limited (except if not involved with items stated in business license and approval certificate).

Except the circumstances stipulated in the previous paragraph, if the alteration of registration items of a company with foreign investment is relating with amendment of articles of association, it shall transact alteration formalities by law to the examination and approval authority within 30 days after formalities for alteration of registration are completed.

Article 14 If a company with foreign investment removes (outside administration of previous company registration organization), it shall apply for transacting formalities for remove to the previous company registration organization. If outside the administration of the examination and approval authority, it shall lodge an application to the examination and approval authority at the place of immigration. The examination and approval authority at the place of immigration, upon receiving the application, shall solicit the opinions of the examination and approval authority at the place of emigration within five working days; the examination and approval authority at the place of emigration shall reply within five working days after receiving letter of soliciting opinions; the examination and approval authority at the place of immigration shall make response within three working days after receiving these opinions. The previous registration authority, upon receiving the application, shall solicit the opinions of the registration authority at the place of immigration within five working days; the registration authority at the place of immigration shall reply within five working days; the previous company registration organization takes over the business license and issues remove certificate according to the opinions of immigration permit of the company registration organization at the place of immigration and examination and approval authority, and removes the application materials and company’s registration files to the company registration organization at the place of immigration within ten working days. The company applying for removal, upon removal certificate and approval document issued examination and approval authority hands in the approval certificate to the examination and approval authority at the place of emigration for cancellation, takes approval certificate to the examination and approval authority at the place of immigration, applies for alteration of registration to the company registration organization at the place of immigration and receives business license.

Article 15 If a company with foreign investment increases its registered capital, the shareholders of limited liability company (including one-person limited company) and company limited as established in the manner of initiation shall pay the newly increased registered capital not less than 20% while applying for alteration of registration of registered capital, and the subscription dates of the residual part shall be in accordance with the provisions of the Companies Law, laws relating with foreign investment and Regulations on Registration Management of Companies. If there are any other laws and administrative regulations and rules separately prescribing, these provisions shall be bound.

If a company limited issues new shares for increase of registered capital, when shareholders subscribe new shares, it shall execute according to the relevant regulations on paying funds for shares for establishing a company limited.

Article 16 While an applicant applies for alteration of registered capital in the following circumstances, if the import cargo subscribed as kind may be duty free according to regulations, the applicant shall explain relevant situation to the customs, and first apply for handling discharge formalities of imported equipment upon guarantee according to Letter of Confirmation on Projects with Domestic and Foreign Investment as Encouraged Development by the People’s Republic of China, and handle relevant formalities for tax concession when obtaining business license after alteration:

(1) When a company with foreign investment increases its registered capital, it applies for investment in import kind and is approved by the examination and approval authority;

(2) When a foreign investor or a company with foreign investment acquires a domestic enterprise and increases its registered capital, it applies for investment in import kind and is approved by the examination and approval authority;

(3) If a company with foreign investment applies for import in kind due to other alterations of its registered capital and is approved by the examination and approval authority.

Article 17 The foreign exchange administration department, while transacting the following businesses, will not require the applicant to provide the business license of the company after alteration:

(1) A company with foreign investment, while adding registered capital, applies for alteration of registration of foreign exchange or opening or changing an account of capital;

(2) When a foreign investor or a company with foreign investment, while acquiring a domestic enterprise and adding registered capital, applies for handling registration of foreign exchange or opens an account of capital;

(3) If a company with foreign investment reduces its registered capital and applies for handling capital reduction approval document to the foreign exchange administration authority;

(4) A company with foreign investment handles other alterations of registration of foreign exchange due to change of capital.

Article 18 A company with foreign investment shall put on file to the company registration organization on the following affairs and their alteration:

(1) Bill of amendment of articles of association that is approved by the examination and approval authority and is not involved with registration items, or the articles of association after amendment (including alteration of total amount of investment);

(2) Directors, supervisors and managers of the company;

(3) Establishment and cancellation of a subsidiary of the company;

(4) List of members and person in charge of liquidation group of the company.

The shareholders of a company with foreign investment postpone investment, paid-in registered capital, it may not handle the formality of record, but it shall handle corresponding alteration of registration according to Regulations on Registration Management of Companies.

If a company with foreign investment handles matter of record, it shall submit the company registration organization with a report for reference, relevant documents certifying occurrence of matter of record as signed by the legal representative of the company (person in charge of liquidation group). If the documents for reference are complete, the company registration organization gives filing and issues filing certificate upon the request of the applicant.

Article 19 If a foreign investor (authorizer) alters the service receiver of domestic legal documents (the authorized person), it shall sign new Authorization on Service of Legal Documents and promptly put on file to the company registration organization. If the name, address and other items of the authorized person occur alteration, it shall also promptly put on file to the company registration organization. The company registration organization shall record in the company registration file.

If a foreign investor has not handled the above filing, the company registration organization will serve domestic legal documents to the authorized person recorded in the company registration organization, which is deemed as service to the foreign investor.

Article 20 If the shareholders of a company with foreign investment handle pledge filing of stock ownership, it shall submit letter of application of pledge filing of stock ownership issued by the company, approval document of examination and approval authority, contract of pledge. After the company registration organization receives the filing, upon request of applicant, it may issue the filing certificate, which indicates name of pledge shareholder, ratio of pledge stock ownership covering the stock ownership in the enterprise, name of pledgee, term of pledge, examination and approval authority of contract of pledge and other matters. During the period of pledge, without consent of pledgee, the pledge shareholders shall not transfer or re-pledge the pledged stock ownership, and shall not reduce the corresponding amount of subscribed capital.

Article 21 If a company with foreign investment applies for canceling alteration of registration according to article 22 of the Companies Law, it shall submit letter of application of canceling alteration of registration and the judgment document of people’s court to the company registration organization. If it is relating with examination and approval matters of foreign investment, the approval document from examination and approval authority shall be submitted. If it is in conformity with the provisions of Companies Law, the company registration organization makes the decision of permitting canceling alteration of registration, if it is relating with items recorded in the business license, it shall renew business license.

Article 22 When the matters for dissolution of a company with foreign investment appear, if the company fails to establish a liquidation group for liquidation in the period stated in the Companies Law, and the creditors also fail to request the people’s court to appoint a liquidation group for liquidation, the agency of power, shareholders, creditors of the company with foreign investment may apply for special liquidation to the examination and approval authority according to Regulations on Liquidation of Enterprises with Foreign Investment. The goods under supervision of customs shall be handled formalities of customs and be paid the corresponding taxation in arrears.

Article 23 If a company with foreign investment applies for cancellation of registration, it shall submit relevant documents according to article 44 of Regulations on Registration Management of Companies. The liquidation report thereof shall also attach certificate of cancellation of taxation authority, certificate of handling customs formalities issued by customs or certificate not handling customs registration formalities; if a company with foreign investment applies for cancellation of registration due to termination of business before expiration, it shall submit approval documents of examination and approval authority (except that the court judges dissolution, bankruptcy or administrative department charges closure, withdraws business license, withdraws establishment permit or withdraws establishment registration of company).

Article 24 If a company with foreign investment sets up or withdraws a subsidiary, it is not necessary for previous company registration organization to verify and transmit, it may directly apply for registration to company registration organization responsible for foreign investment at the place of the subsidiary.

If it needs approval of relevant departments for setting up and canceling a subsidiary according to laws, administrative regulations, order of the State Council or special regulations of the state relating with restricted projects of foreign investment and scope of service and trade, it shall apply for registration within 30 days as of approval date. If the application is overdue, the applicant shall report the examination and approval authority to confirm the effectiveness of the previous approval document or separately report for approval.

Article 25 The company registration organization will not handle registration of administrative body of a company with foreign investment. For the administrative bodies previously registered, it will not handle alteration or renewal formalities. After the term expires, it shall handle cancellation of registration or apply for establishing a subsidiary upon demand. A subsidiary of a company with foreign investment may be engaged in contact, consultation and other matters in the scope of business of the company.

If a company undertakes business activities in the name of administrative body, the company registration organization will investigate by law.

Article 26 If the shareholders or initiators of a company with foreign investment fail to pay or fail to pay on schedule the monetary or non-monetary assets as capital subscription, the company registration organization will conduct punishment according to the applicable principle of Regulations on Registration Management of Registered Capital of Company. The date of capital subscription of company established before January 1, 2006 shall be based on registration of establishment.

If a Sino-foreign cooperative company fails to perform the obligations of capital subscription in the due period, the company registration organization shall charge it to perform in a time limit according to the provisions of article 9 of Law of Sino-Foreign Cooperative Joint Venture; if it fails to perform these obligations exceeding the time limit, it will handle according to paragraph I of this article; for a foreign joint venture or a company with exclusive foreign investment, if it fails to pay in the due period, the company registration organization may handle according to paragraph I of this article and may also withdraw its business license according to the provisions of article 9 of Law on Foreign-invested Enterprises.

Article 27 If a company with foreign investment exceeds the scope of business verified for registration, and is engaged in the operation of projects encouraged and permitted in the Guide Directory of Industries with Foreign Investments without permission, the company registration organization will give punishment subject to the provisions of article 73 of Regulations on Registration Management of Companies.

If a company with foreign investment exceeds the scope of business verified for registration, and is engaged in the operation of projects restricted and prohibited in the Guide Directory of Industries with Foreign Investments, the company registration organization may determine “illegal operating activities, which exceeds the scope of business verified for registration, without permission deals in the operating activities required to obtain permit or other approval documents ”, and give punishment according to Rules on Investigation and Cancellation of Unlicensed Operation. If forming a crime, it shall investigate its criminal liabilities.

Article 28 For the companies established with investment by any investor based in Taiwan, Hong Kong Special Administrative Region, Macao Special Administrative Region, any Chinese citizen settled down abroad, the companies established with investment by the investment companies with foreign investment, growth investment companies with foreign investment, which examination, approval, registration and management are applicable to these opinions.