Most Read Contributor in Hong Kong, September 2016
Written by Elaine Lo, Partner of Johnson Stokes & Master
(11 Apr 2003)
The State Administration of Press and Publishing
("SAPP") and the Ministry of Foreign
Trade and Economic Co-operation
("MOFTEC") jointly promulgated the
Measures for the Administration of Foreign-Invested
Enterprises for distributing Books, Newspapers and
Measures") on 17 March 2003, which set out the
regulatory framework for the establishment of foreign-invested
enterprises ("FIEs") to conduct
wholesaling and retailing of books, newspapers, magazines and
periodicals. The Publications Measures will become effective
on 1 May 2003.
1. Methods of Making Investments in the Publications
The Publications Measures permit FIEs, engaged in the
wholesaling and retailing of books, newspapers and periodicals, to
be established in the form of an equity joint venture, co-operative
joint venture or wholly foreign-owned enterprise. It is also
possible for foreign investors to acquire shares in PRC domestic
publications distribution enterprises, thereby converting such
enterprises to FIEs.
However, the Publications Measures will not apply to the
establishment of FIEs for conducting wholesale distribution of
publications prior to 1 December 2004, as foreign-invested
wholesaling enterprises to distribute publications can only be
established after 1 December 2004.
2. Qualifications and Criteria
The Publications Measures lay down certain criteria for the
establishment of FIEs to engage in the distribution of
publications. These are:
(a) both the Chinese and foreign investors must have
the capability to engage in distribution of books, newspapers and
periodicals, and have no record of illegal operations during the
preceding 3-year period;
(b) the legal representative or general manager of the FIE must
possess the relevant professional qualification certificate (medium
level or above) in the publications distribution business, and the
sales personnel of the FIE should possess the relevant professional
qualification certificates (primary level or above) in the
publications distribution business;
(c) the FIE should have a permanent place of operation which, in
the case of an FIE established to engage in wholesaling of
publications, should be not less than 50 square meters. If
the publications wholesaling FIE's business premises are
independent, then such premises should have an area of not less
than 500 square meters;
(d) the registered capital of an FIE engaged in
wholesaling of publications shall be not less than RMB30 million,
while that of an FIE engaged in retailing of publications shall be
not less than RMB5 million;
(e) the term of operation of the FIE cannot exceed 30 years.
3. Approval Procedures
The establishment of an FIE, or the purchase of shares by
foreign investors in PRC publications distribution enterprises, is
required to be approved, first, by SAPP, and secondly, by MOFTEC
(now replaced by the Ministry of Commerce). SAPP is in charge
of approving the project proposal, feasibility study, the
qualifications of the Chinese and foreign investors, the asset
appraisal report and other relevant documents. After
SAPP's approval has been obtained, the joint venture contract,
articles of association and name list of directors of the FIE,
together with the approval document issued by SAPP, should then be
submitted to MOFTEC for approval.
Once MOFTEC's approval is granted, the applicant is required
to apply to the local State Press and Publishing Agency for a
"Publications Operating Permit" by presenting the
Certificate of Approval issued by MOFTEC.
The original email legal update is copyright Johnson
Stokes & Master at the date written first above. All rights
reserved. This publication provides information and comments on
legal issues and developments of interest to our clients and
friends. The foregoing is intended to provide a general guide to
the subject matter and is not intended to provide legal advice or a
substitute for specific advice concerning individual situations.
Readers should seek legal advice before taking any action with
respect to the matters discussed herein. Please also read the JSM
legal publications Disclaimer.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Anyone with standard form contracts who deals with small business must review the contracts for potential unfair terms.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).