On December 23, 2011, the National Administration of Surveying, Mapping and Geoinformation ("NASMG") issued the "Circular on Further Strengthening the Administration of the Qualification for Online Mapping Services" (the "Circular").
Pursuant to the Circular, qualified online mapping services suppliers with foreign investment (the "Suppliers") are required to apply for licenses in accordance with the "Interim Measures for the Administration of the Surveying and Mapping Conducted by Foreign Organizations or Individuals in China (2011 Amended) "(the "Measures"). Under the Measures, the maximum ownership a foreign investor is permitted to have in any online mapping services company is 50% and only if such company does not purport to provide other type of online mapping related services, such as real estate surveying. If such other services will be provided, then the Chinese partner must have majority ownership of the Chinese-foreign joint venture, even though such venture may be in the form of a cooperative joint venture. Prior to the Measures’ amendment in 2011, Chinese parties were required to be controlling shareholders, holding 51% or more of any joint venture that is involved in online mapping. Certain activities, however, are still prohibited to be engaged by foreign invested venture, such as geodesic surveying, aerial photography of surveying and mapping, administrative boundary surveying and mapping, marine surveying and mapping, etc.
In addition to the above licensing requirement, the Circular imposes the following additional restrictions; First, to provide online mapping services, Suppliers must use the maps approved by NASMG or its provincial counterparts. Second, Suppliers are prohibited from providing links to offshore online mapping services. Third, Suppliers are only allowed to publish street view maps subject to the authority’s examination. Fourth, from February 1, 2012, Suppliers established before then and which have not applied for the license required by the Measures are prohibited from engaging in online mapping services. For Suppliers that have already submitted applications, any new content of online mapping services is also forbidden until a new license has been issued. Any Suppliers without a license and continues to provide online mapping services may find its operations suspended by NASMG or its local counterpart.
In spite of these restrictions imposed by the Circular, the Circular is one-step towards the opening of this business to additional foreign investment and involvement.