On November 24, 2014, the Ministry of Commerce and the Ministry of Civil Affairs issued the Circular of the Ministry of Commerce and the Ministry of Civil Affairs on Matters Relating to the Investment in, and Establishment of, For-profit Elderly Nursing Homes by Foreign Investors (hereinafter, the "Circular") to provide detailed stipulations regarding the specific establishment process for establishing for-profit elderly nursing homes in China by foreign companies, enterprises and other economic organizations or individuals (hereinafter, the "Foreign Investors") in order to carry out the policy of encouraging foreign investment in the elderly nursing service sector under the Specific Opinion of the State Council on Accelerated Development of the Elderly Nursing Service Sector promulgated by the State Council on September 6, 2013.
The Circular permits and encourages the Foreign Investors to set up elderly nursing homes in China by sole proprietorship or joint venture and encourages them to develop large-scale or franchised nursing homes as well as quality brands for elderly nursing homes. Meanwhile, the Circular specifically provides that the Foreign Investors investing in for-profit elderly nursing homes shall enjoy the same tax incentives and be eligible for the same administrative fee exemption as that applying to a domestic investor's establishment of for-profit elderly nursing homes.
The Circular specifically provides that when establishing elderly nursing homes, the Foreign Investors are required to submit to the local provincial commerce authorities for establishing the nursing homes materials, such as an application, descriptions of the circumstance (including the venue, safety and medical and nursing arrangements), agreement, charter (a foreign-invested enterprise is only required to submit the charter), the roster of board members and director assignment letters, a prior name approval notice, descriptions, and supporting documents regarding the operating experience of the Foreign Investors or the actual controllers, and documentation describing the management team as well as their management experience in the elderly nursing service sector.
The Circular has specific requirements for the operating experience and management team of the Foreign Investors but does not require a capital size and investment amount of the investor per se. Upon receipt of the application, the provincial commerce authority should issue a written decision to approve or reject the application within 20 days upon acceptance of the application. If approval is granted, the Foreign Invested Enterprise Approval Certificate shall be issued. Within one month after the Foreign Invested Enterprise Approval Certificate is received, the Foreign Investors shall complete the foreign invested enterprise registration formalities with the industrial or commercial administrative authorities.
The requirements under the Circular should be referenced for for-profit elderly nursing homes established by investors in the Hong Kong Special Administrative Region, the Macao Special Administrative Region, and the Taiwan area.