The State Administration for Industry and Commerce (the
"SAIC") issued Circular 31 on 10 February , 2010, as a
further step in the development of foreign-invested partnerships
("FIPs") following its issuance of Circular 47, the
Administrative Measures for the Registration of Foreign-invested
Partnership Enterprises (the "Registration Measures"), in
Circular 31 provides guidance to various SAIC offices and market
supervision and administration offices at the province, autonomous
region, certain municipality and sub-provincial levels (the
"Authorities") in understanding and interpreting the
Measures for the Administration on the Establishment of Partnership
Business by Foreign Enterprises or Individuals in China (the
"Measures"), issued by the State Council in November
2009, and in implementing the Measures and the Registration
Measures. Circular 31 highlights the work priorities of the
Authorities and requires the Authorities to understand and observe
the following in implementing the Measures and the Registration
Understanding the importance of the Measures and FIPs, as a new
model of foreign investments, in promoting China's continuous
reform and opening up polices, stabilising and expanding foreign
investments and increasing and improving the modes of foreign
investments in China. Circular 31 emphasizes the new task of the
Authorities in administrating the registration of FIPs under the
Measures and the Registration Measures, which permit private equity
funds, in the form of FIPs, to be registered with a SAIC office at
the province or sub-provincial level without approval from the
Ministry of Commerce.
Undertaking steps to improve training for their personnel in
understanding and implementing the Measures.
Standardising the FIP registration process to provide
convenient and efficient registration services for FIPs. Circular
31 reiterates certain key registration requirements for FIPs with
investments as the main purpose, i.e., private equity funds,
specified in the Registration Measures and requires the Authorities
to focus their work on the registration and administration of
private equity funds.
Establishing a sophisticated regulatory and supervisory
framework for FIPs, in particular, on the compliance of FIPs with
foreign investment policies and foreign investment industry
restrictions in the Catalogue for the Guidance of Foreign
Investment Industries. The Authorities are further required to
review applicable approvals during the course of registering
FIPs' re-investments in China.
Strengthening interdepartmental coordination and cooperation to
ensure the smooth implementation of the Measures.
Circular 31, together with Circular 47, provides the basis for
the local SAIC offices in registering FIPs, including private
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