China has issued new registration rules for foreign invested
partnership enterprises (FIPEs), confirming that approval by the
Ministry of Commerce will not be necessary for establishment of
these entities. The rules will come into effect on 1 March.
In order to implement the Measures for the Administration of the
Establishment of Partnership Enterprises inside China by Foreign
Enterprises or Individuals (see our Alert on
4 December 2009), the State Administration for Industry and
Commerce (SAIC) has promulgated the Measures for the Administration
of Foreign Invested Partnership Enterprises Registration (the
The Measures try to follow the registration rules that apply to
domestic partnership enterprises, while at the same time conforming
to the rules applicable to foreign invested enterprises. They also
detail what a FIPE may or may not be allowed to do and how a FIPE
can be established, changed or cancelled.
Items subject to registration
The Measures require certain items to be registered, including
The managing partner (zhixing shiwu hehuoren) who is equivalent
to a legal representative in a company;
The scope of business;
The partners' names and addresses; and
Manner in which liability is borne.
If there is an agreement as to the term of a partnership
enterprise, the term must also be registered. The significance of
the above items is that if any of them change, then the FIPE needs
to apply for a change in registration to relevant SAIC.
In order to establish a FIPE, the applicant must submit the
following documents to the registration authority:
An explanation executed by all partners that foreign investment
industry polices have been complied with. This is an unusual
requirement, peculiar to FIPEs, and is intended to make up for the
fact that the bureau of commerce will not have reviewed the
The approval letter, if a business of a FIPE is subject to
prior approvals or its business scope includes a business requiring
Differences with domestic partnership registrations
Unlike registration of a domestic partnership enterprise, there
are some requirements specially imposed on FIPEs:
In the first place, for any change of partners, address, the
manner in which liability is borne, amount of capital, date of
contribution, method of capital contribution and method of
evaluation, the signatures of all partners must be notarized by a
Chinese public notary.
Secondly, a FIPE must apply for foreign exchange, tax, customs
registration procedures which are required for foreign invested
Finally, a FIPE with investment focus must comply with rules
applying to foreign invested enterprises regarding its domestic
Restrictions that go beyond foreign invested companies
Under the Measures, a FIPE will be subject to stricter
restrictions than other foreign invested enterprises. They are
generally prohibited from investing in businesses which are listed
in the Catalogue for the Guidance of Foreign Investment Industries
as not open to WFOEs.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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