(Promulgated on November 3, 1994)
Article 1
These Regulations are hereby formulated with a view to promoting the advertising industry of China to serve for the open-to-the-outside-world, assuring the high quality of the foreign-invested advertising enterprises, and pushing forward the healthy development of the advertising industry of China.
Article 2
For the purpose of these Regulations, the term "foreign-invested advertising enterprises" means the enterprises that are engaged in advertising business in the form of either a Chinese-Foreign equity joint
venture or a Chinese-foreign cooperative joint venture.
Article 3
To apply for the establishment of a foreign-invested advertising enterprise, related laws, regulations and rules shall be followed, such as Law of the People's Republic of China on Chinese-foreign Equity Joint Ventures, Law of the People's Republic of China on Chinese-foreign Cooperative Joint Ventures, The Advertising Law of the People's Republic of China, Regulations on Advertising Administration, Qualification Standards of Advertising Operators and Phraseology Norm for the Examination and Ratification of the Advertising Business Scope, etc.
Article 4
The project proposals and the feasibility study reports of foreign-invested advertising enterprises shall be examined and approved by the State Administration for Industry and Commerce. The business scopes of foreign-invested advertising enterprises that are classified as the different scopes like designing, producing, media-buying and acting for advertising business both at home and abroad, shall be approved by the State Administration for Industry and Commerce, in accordance with The Qualification Standards of Advertising Operations and Phraseology Norm for the Examination and Ratification of the Advertising Business Scope and in the light of the different types of foreign-invested advertising enterprises. The contracts and the articles of association of foreign-invested advertising enterprises shall be examined and approved by the Ministry of Foreign Trade and Economic Cooperation.
Article 5
For the establishment of a foreign-invested advertising enterprise, the following procedures shall be followed:
(1) The Chinese party to an equity joint venture advertising enterprise (including the party to Chinese-foreign cooperative joint venture, similarly hereinafter) shall submit the project proposal and feasibility study report for the establishment of a foreign-invested advertising enterprise to the local administration for industry and commerce which is authorized to ratify and register enterprises with foreign investment. With the preliminary examination comments of the local administration, the administration for industry and commerce at the level of province, autonomous region, municipality directly under the Central Government or the municipalities specifically listed in the State plan shall examine and transfer those documents to the State Administration for Industry and Commerce for final examination and approval.
In case the Chinese Party is an enterprise directly under the ministries, commissions or bureaus of the State Council, the Chinese party shall submit to the department in charge the project proposal and feasibility study report for the establishment of a foreign-invested advertising enterprise. Upon examination and consent by the department in charge, those documents shall be submitted to the State Administration for Industry and Commerce for final examination and approval.
Upon receipt of all the documents required, the State Administration for Industry and Commerce shall, within 30 days, make a decision of approval or disapproval over the establishment of the foreign-invested advertising enterprise.
(2) After the issuance of the "Certificate of Examination and Approval Opinions for Foreign-Invested Advertising Enterprises" by the State Administration for Industry and Commerce, the Chinese party shall submit the contract and articles of association of the foreign-invested advertising enterprise to the local foreign trade, and after being checked by the foreign trade and economic cooperation authorities at the level of province, autonomous region, municipality directly under the Central Government or the municipalities specifically listed in the State plan, the relative documents shall be transferred to the Ministry of Foreign Trade and Economic Cooperation for final examination and approval.
In case the Chinese party is an enterprise directly under the ministries, commissions or bureaus of the State Council, the Chinese party shall submit to the department in charge the contract and articles of association for the establishment of a foreign-invested advertising enterprise. After being checked and consented by the department in charge, the documents mentioned-above shall be transferred to the Ministry of Foreign Trade and Economic Cooperation for final examination and approval.
The Ministry of Foreign Trade and Economic Cooperation shall, according to the State laws and regulations governing foreign investment, decide whether to approve or disapprove the establishment of such an enterprise within the stipulated time limits.
(3) The Chinese party shall, with the "Certificate of Examination and Approval Opinions for Foreign-invested Advertising Enterprises" issued by the State Administration for Industry and Commerce, the approval certificate issued by the Ministry of Foreign Trade and Economic Cooperation and other documents stipulated by the laws and regulations, submit, according to the relative regulations on enterprise registration, to the State Administration for Industry and Commerce or the local administrations for industry and commerce authorized to check and register enterprises with foreign investment for handling the formalities of registration for an enterprise legal person.
The application of a foreign-invested advertising enterprise for setting up a branch shall be examined and approved by the foreign trade and economic cooperation department of the province, autonomous region, municipality directly under the Central Government or the municipalities specifically listed in the State plan, and then transferred to the Ministry of Foreign Trade and Economic Cooperation which shall, after gathering opinions from the State Administration for Industry and Commerce, decide whether to approve or disapprove it.
Article 6
To apply for establishing a foreign-invested advertising enterprise, the following conditions shall be fulfilled in addition to the conditions stipulated in the relative laws and regulations:
(1) all parties to a foreign-invested advertising enterprise must be a fair-sized enterprise legal person which is mainly engaged in advertising business;
(2) being able to introduce the world's advanced advertising technology and equipment;
(3) having the capability for market investigation, advertising plan and advertising effect measurement;
(4) being able to train the Chinese personnel in the aspects of advertising plan, creation, design, production and management; and
(5) the registered capital being no less than US $ 300000.
Article 7
The foreign-invested advertising enterprise which intends to apply for setting up a branch shall fulfill the following main conditions:
(1) the registered capital has been contributed in full;
(2) the annual volume of business shall not be lower than RMB 20 million yuan; and
(3) in the place where the branch is to be located, there must be more than 3 relatively permanent advertising customers.
Article 8
When applying for the establishment of a foreign-invested adverting enterprise, the Chinese party shall, according to the stipulations set forth in Article 5 of these Regulations, submit to the State Administration for Industry and Commerce the following documents:
(1) the application report for the establishment of a foreign-invested advertising enterprise;
(2) the approval documents issued by the department in charge of the Chinese party;
(3) the project proposal for the establishment of a foreign-invested advertising enterprise;
(4) the feasibility study report worked out jointly by all the parties;
(5) the registration testimonials for each party;
(6) the financial credit documents for each party;
(7) the documents for the main equipment used and technology adopted, and their original sources;
(8) its advertising administration system; and
(9) the preliminary examination opinions of the local administrations for industry and commerce.
Article 9
When applying for the establishment of a foreign-invested advertising enterprise, the Chinese party shall, in accordance with the procedure provided in Article 5 of these Regulations, submit to the Ministry of Foreign Trade and Economic Cooperation the following documents:
(1) the documents reported by local foreign trade and economic cooperation departments or the ministries, commissions or bureaus directly under the State Council;
(2) the "Certificate of Examination and Approval Opinions for Foreign-invested Advertising Enterprises" issued by the State Administration for Industry and Commerce;
(3) the contract and articles of association for the establishment of the foreign-invested advertising enterprise;
(4) the project proposal and feasibility study report;
(5) the registration testimonials for each party;
(6) the financial credit documents for each party;
(7) the verification and approval documents for the name of the enterprise issued by the administration authorities for industry and commerce; and
(8) the name list of members of the board of directors and the appointment documents for the directors from each party.
Article 10
Even after obtaining the approval certificate through examination, the foreign-invested advertising enterprise shall, according to the procedure stipulated in Article 5 of these Regulations, apply for approval in any of the following cases:
(1) to change any party; or
(2) to change the business scope.
Article 11
These Regulations shall be applicable as a measure of reference to enterprises with foreign investment if they apply for enlarging their business scope to advertising business.
Article 12
These Regulations shall come into force as of January 1, 1995.
This translation, together with any explanatory material, is provided courtesy of Lehman Tax & Accounting.
