Following the issuance of the Provisions Concerning the Administration of Foreign Invested Venture Capital Enterprises (the “FIVCE Provisions”) in 2003 and the Circular of the Ministry of Commerce on Issues Concerning the Approval of Foreign Invested Venture Capital Enterprises and Venture Capital Management Enterprises (the “FIVCE Circular”) in 2009, the Ministry of Commerce (MOFCOM) issued the Circular on Improving the Administration of Record Filing for Foreign Invested Venture Capital Enterprises (Shang Zi Han [2012] No. 269, the “Filing Circular”) on May 7, 2012, which took effect on the same day. This filing Circular has further specified the requirements on filing for Foreign Invested Venture Capital Enterprises (FIVCE). The main points are summarized below.

  1. General Filing Requirements

Pursuant to the Filing Circular, when examining filing applications of proposed FIVCEs, the provincial level commerce authorities are required to file their opinions to MOFCOM through the approval administration system for foreign invested enterprises (the “Administration System”) in a timely manner. For the existing FIVCEs, the filing with MOFCOM shall be completed by the provincial level commerce authorities through the Administration System before May 31 of every year. MOFCOM will publish and update on its website a list of FIVCEs that have completed the filing procedures (the “FIVCEs List”). It is explicitly stipulated that only the enterprises indicated in the FIVCEs List can benefit from government polices, apply for changes of registration and carry out investment activities within China.

  1. FIVCE’s Investment

When an FIVCE is investing in “Encouraged” and “Permitted” industries under the Catalogue for the Guidance of Foreign Investment Industries or applying for changes of registration, local commerce authorities, based on the information included in the FIVCEs List, shall complete the filing procedures for the FIVCE’s proposed investment, and issue the certificate of approval for foreign invested enterprises to the investee company within five working days after the acceptance of all related filing documents from the FIVCE.

The filing documents include the application form for setting up new investments or changes of registration, the FIVEC’s certificate of approval, as well as its business license.

  1. Other Guidance

Foreign investors are encouraged to use RMB to set up new FIVCEs in China or to increase the registered capital of existing FIVCEs. In such circumstances, the “Notice of the Ministry of Commerce on Issues Concerning Cross-border Direct Investments in RMB” (Shang Zi Han [2011] No. 889, the “RMB Investment Notice”) shall apply, which stipulates that additional documents, including the statement on the source and use of the RMB capital, are required to be submitted to the authorities by the FIVCEs.

A FIVCE investing with RMB in the “Restricted” industries shall be subject to the regulation of Article 41 of the “FIVCE Provisions,” and shall file the submissions as required.

To conclude, currently MOFCOM is actively guiding and regulating the FIVCEs’ investments in China in order to ensure the sound development of FIVCEs’ business.