Decree of the State Administration for Industry & Commerce and the MOFCOM

No. 35

The Provisions on the Administration of Foreign-invested Advertising Enterprises, which were amended by the State Administration for Industry & Commerce (SAIC) and the MOFCOM, is hereby promulgated and shall enter into force as of Oct.1, 2008.

Zhou Bohua, Minister of the SAIC
Chen Deming, Minister of the MOFCOM

Provisions on the Administration of Foreign-invested Advertising Enterprises

Article 1 For the purpose of strengthening the administration on the foreign-invested advertising enterprises and promoting the sound development of advertising industry, the Provisions are formulated pursuant to the laws and administrative regulations related to the administrations of foreign investments and advertisements.

Article 2 "Foreign-invested advertising enterprises" herein refers to Sino-foreign equity joint ventures and Sino-foreign contractual joint ventures (hereinafter referred to as Sino-foreign advertising joint ventures, the same below) and wholly foreign-invested advertising enterprises that are lawfully engaging in advertising businesses.

Article 3 Any entity or individual that establishes a foreign-invested advertising enterprise shall abide by the Provisions as well as the Law of the People’s Republic of China on Sino-foreign Equity Joint Ventures, the Law of the People’s Republic of China on Sino-foreign Contractual Joint Ventures, the Law of the People’s Republic of China on Foreign-invested Enterprises, the Advertising Law of the People’s Republic of China, Regulations on the Administration of Advertisements, and other relevant laws, regulations and rules.

Article 4 The project proposal and the feasibility study report of a foreign-invested advertising enterprise shall be approved by the SAIC and its authorized administrations for industry and commerce at provincial level. The contracts and articles of associations of a foreign-invested advertising enterprise shall be approved by administrations of commerce at provincial level.

Article 5 A foreign-invested advertising enterprise that meets the prescribed conditions may engage in designing, making, issuing, or acting as an agency of various advertisements businesses both home and abroad. The specific business scope shall be subject to the approval of the SAIC and its authorized administrations for industry and commerce at provincial level according to law.

Article 6 Any entity or individual that establishes a Sino-foreign advertising joint venture shall go through procedures as follows:
(1) The main Chinese partner shall submit the documents as provided for in Article 12 to the administration for industry and commerce competent for reviewing and approving the registration of foreign-invested enterprises in the place where it is located, and the latter shall give an opinion on the preliminary review, and then submit the aforesaid documents to the administration for industry and commerce at provincial level authorized by the SAIC for approval, or to the SAIC for approval via the administration for industry and commerce of a province, autonomous region, municipality directly under the Central Government or separately planning city after its review.

The SAIC and its authorized administration for industry and commerce at provincial level shall make a decision on approval or disapproval within 20 days upon the date when they received the complete set of documents.

(2) After obtaining the Opinion on the Approval of Foreign-invested Advertising Enterprise Project issued by the SAIC or its authorized administration for industry and commerce at provincial level, the main Chinese partner shall submit the documents as provided for in Article 13 to the administration of commerce at provincial level in the place where the to-be-established enterprise is located. If it is approved by the administration of commerce at provincial level, a Foreign-invested Enterprise Approval Certificate shall be issued. If it is disapproved, written explanations shall be given.

(3) The main Chinese partner shall, pursuant to the relevant provisions on enterprise registration, handle the enterprise registration formalities in the SAIC or the administration for industry and commerce competent for reviewing and approving the registration of foreign-invested enterprise on the strength of the Opinion on the Approval of Foreign-invested Advertising Enterprise Project issued by the SAIC or its authorized administration for industry and commerce at provincial level, the Foreign-invested Enterprise Approval Certificate issued by the administration of commerce at provincial level and other documents as required by laws and regulations.

Article 7 Any entity or individual that establishes a wholly foreign-invested advertising enterprise shall go through procedures as follows:
(1) The foreign investor shall submit to the SAIC or its authorized administration for industry and commerce at provincial level the documents as provided for in Article 14.

The SAIC or its authorized administration for industry and commerce at provincial level shall make a decision on approval or disapproval within 20 days upon the date of receipt of the complete set of documents.

(2) After obtaining the Opinion on the Approval of Foreign-invested Advertising Enterprise Project issued by the SAIC or its authorized administration for industry and commerce at provincial level, the foreign investor shall submit the documents as provided for in Article 15 to the administration of commerce at provincial level at the place where the to-be-established enterprise is located. The administration of commerce at provincial level shall make a decision on approval or disapproval within 20 days upon the date of receipt of the documents. If it is approved, a Foreign-invested Enterprise Approval Certificate shall be issued.

(3) The foreign investor shall, pursuant to relevant provisions on the enterprise registration, go through the enterprise registration formalities in the SAIC or the administration for industry and commerce competent for reviewing and approving the registration of foreign-invested enterprise on the strength of the Opinion on the Approval of Foreign-invested Advertising Enterprise Project issued by the SAIC or its authorized administration for industry and commerce at provincial level, the Foreign-invested Enterprise Approval Certificate issued by the administration of commerce at provincial level and other documents as prescribed in laws and regulations.

Article 8 Where a foreign-invested advertising enterprise files an application for establishing a branch, it shall go through procedures as follows:
(1) It shall submit the documents as provided for in Article 16 to the administration of commerce and the administration for industry and commerce at provincial level in the place where it is located separately;

(2) The aforesaid administration of commerce at provincial level shall make a decision on approval or disapproval after consulting the aforesaid administration for industry and commerce at the same level. Where it approves, it shall simultaneously send a copy of approval document to the administration of commerce and the administration for industry and commerce at provincial level in the place where the to-be-established branch is located; if it disapproves, it shall give written explanations; and

(3) It shall handle the enterprise registration formalities in the administration for industry and commerce competent for reviewing and approving the registration of foreign-invested enterprises in the place where the to-be-established branch is located on the strength of the approval documents on the establishment of branches and other documents as prescribed by laws and regulations.

Article 9 Establishing a Sino-foreign advertising joint venture, an applicant shall meet the following requirements besides the conditions as provided for in the relevant laws and regulations:
(1) All partners shall be enterprises engaging in advertising business;
(2) All partners shall have existed and engaged in advertising business for over two years since establishment; and
(3) Having certain advertising business performances.

Article 10 Establishing a wholly foreign-invested advertising enterprise, an applicant meet the following requirements besides the conditions as provided for in the relevant laws and regulations:
(1) The investor shall be an enterprise mainly engaging in advertising business; and
(2) The investor has existed and engaged in advertising business for over three years since establishment.

Article 11 Where a foreign-invested advertising enterprise files an application for establishing a branch, it shall meet the following conditions:
(1) Having paid up the registered capital; and
(2) Its annual business volume is no less than RMB20 million.

Article 12 Applying for the establishment of a Sino-foreign advertising joint venture, the main Chinese partner shall submit the following documents to the SAIC or its authorized administration for industry and commerce at provincial level according to the procedures as provided for in Article 6:
(1) The application for the establishment of Sino-foreign advertising joint venture;
(2) The Notice on the Pre-approval of Enterprise Name;
(3) The resolutions made by the general meetings of shareholders of partners (board of directors);
(4) The project proposal for the establishment of Sino-joint advertising joint venture and the feasibility research report jointly formulated by all partners;
(5) The registration certificates of all partners;
(6) The credit-standing certificates of all partners;
(7) The advertising management system; and
(8) The preliminary review opinions of the local administration for industry and commerce.

Article 13 Applying for the establishment of a Sino-foreign advertising joint venture, the applicant shall, in accordance with procedures as provided for in Article 6, submit the following documents to the administration of commerce at provincial level:
(1) The Opinion on the Approval of Foreign-invested Advertising Enterprise Project issued by the SAIC or its authorized administration for industry and commerce at provincial level;
(2) The contract for establishing a foreign-invested advertising enterprise and articles of association;
(3) The project feasibility research report;
(4) The registration certificates of all partners;
(5) The credit-standing certificates of all partners;
(6) The Notice on the Pre-approval of Enterprise Name;
(7) The name list of the directors of the joint venture and the delegation letters of directors of all parties; and
(8) The preliminary review opinions of the local administration of commerce.

Article 14 Applying for the establishment of a wholly foreign-invested advertising enterprise, the investor shall submit the following documents to the SAIC or its authorized administration for industry and commerce at provincial level according to the procedures as provided for in Article 7:
(1) The application for the establishment of a wholly foreign-invested advertising enterprise;
(2) Resolutions of the general meeting of shareholders of the investor (board of directors);
(3) The project proposal and the feasibility research report prepared by the investor;
(4) The registration certificate of the investor;
(5) The credit-standing certificate of the investor; and
(6) The Notice on the Pre-approval of Enterprise Name.

Article 15 Establishing a wholly foreign-invested advertising enterprise, the foreign investor shall submit the following documents to the administration of commerce at provincial level according to the procedures as provided for in Article 7:
(1) The application for establishing a wholly foreign-invested advertising enterprise;
(2) The Opinion on the Approval of Foreign-invested Advertising Enterprise Project issued by the SAIC or its authorized administration for industry and commerce at provincial level;
(3) The project proposal and feasibility research report prepared by the investor;
(4) The registration certificate of the investor;
(5) The credit-standing certificate of the investor; and
(6) The articles of association for the establishment of the wholly foreign-invested advertising enterprise.

Article 16 Where a foreign-invested advertising enterprise files an application for establishing a branch, it shall submit the following documents to the administration of commerce at provincial level and the administration for industry and commerce at the same level:
(1) The application of a foreign-invested advertising enterprise for establishing a branch;
(2) The resolution of the board of directors;
(3) The annual audit report on advertising operations;
(4) The Enterprise Business License;
(5) The business place certificate; and
(6) The enterprise?capital verification report

Article 17 After established, a foreign-invested advertising enterprise shall, in any of the following
circumstances, report for approval separately and alter the registration of the enterprise according to the procedures as provided for in Articles 6 and 7:
(1) Changing any partner or transferring equity;
(2) Changing the scope for advertising business; or
(3) Changing the registered capital.

Article 18 When establishing an advertising enterprise, a foreign investor may entrust a qualified agency to handle the application formalities for it/him.

Article 19 All the documents required to submit according to the Provisions shall be in Chinese.

Article 20 Where a foreign investor who invests in advertising industry by merging a Chinese advertising enterprise, it/he shall comply with relevant regulations on the acquisition of Chinese enterprises by foreign investors and the Provisions.

Article 21 Where an investor from Hong Kong, Macao and Taiwan establishes advertising enterprises in the mainland of China, it/he shall abide by the Provisions.

Article 22 Where a foreign-invested enterprise files an application for increasing advertising business, it shall abide by the Provisions.

Article 23 The SAIC and the MOFCOM are responsible for the interpretation of the Provisions.

Article 24 The Provisions shall enter into force as of Oct.1, 2008. The Provisions on the Administration of Foreign-invested Advertising Enterprises promulgated as the No.8 Decree of the SAIC and the MOFCOM on Mar.2, 2004 shall be simultaneously abolished.

Annex:

For the purpose of promoting a closer economic and trade relationship between the mainland of China and Hong Kong and Macao, and encouraging service providers from Hong Kong and Macao to establish advertising enterprises in the mainland, the following supplementary provisions governing Hong Kong and Macao investors?investments in advertising industry are formulated as follows in accordance with the Mainland and Hong Kong Closer Economic Partnership Arrangement and the Mainland and Macao Closer Economic Partnership Arrangement:

1. As of Jan.1, 2004, service providers from Hong Kong and Macao are allowed to establish wholly Hong Kong/Macau-invested advertising enterprises.

2. Service providers from Hong Kong and Macao shall meet the definition of "the service providers" and other relevant requirements in the Mainland and HK Closer Economic Partnership Arrangement or in the Mainland and Macao Closer Economic Partnership Arrangement
respectively.

3. A service provider from Hong Kong or Macao shall be a legal person engaging in advertising businesses (including the circumstance that the advertising is non-core business).

4. Where any other provisions on the investments in the Mainland advertising industry made by service providers from Hong Kong and Macao contradictory to the Provisions, the latter shall prevail.