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Q & A for CEPA Trade in Services - Part 1
Extracted from the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) and related laws
Note: All information in this document is for reference only. In case of ambiguity, relevant laws, regulations, administrative rules, and requirements from the state or government departments shall prevail.
Frequently Asked Questions |
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Procedures for Macao investors to set up enterprises (wholly owned companies or joint ventures) in the Mainland
The procedures are similar, mainly including 3 categories:
Service Industry |
Formalities of Evaluation and Approval |
Evaluation and approval authorities |
Real estate, management consulting services, restaurants and hotels, and warehousing |
Approval from departments governing the relevant industries under the State Council is not required. |
Local departments of Foreign Trade and Economic Cooperation in the region where the enterprise is established. (Investment projects of more than USD 30 million must be notified the Ministry of Commerce) |
Medical and dental services, advertising, telecommunications, distribution of audio-visual products, cinemas, distribution services, travel agencies, sea transport and road transport services. |
Applicant companies must seek for opinions from departments governing the relevant industries under the State Council or submit project proposals first to those departments |
Firstly, applicant companies must submit project proposals or feasibility studies for approval to local authorities governing the relevant industries. Upon receiving the authorization documents, the companies concerned can proceed with registration with local departments of Foreign Trade and Economic Cooperation. |
Construction, convention and exhibition, freight forwarding agencies, logistics. |
Applicant companies may apply directly to local departments of Foreign Trade and Economic Cooperation, which will consult the departments governing the relevant industries for evaluation and approval. |
Banking, insurance, securities |
After approval by departments governing the relevant industries, applicant companies will obtain the Certificate of Approval for Investment of Foreign-invested Enterprises from local departments of Foreign Trade and Economic Cooperation |
Applicant companies may apply directly to local departments governing the relevant industries (China Banking Regulatory Commission, China Insurance Regulatory Commission, and China Securities Regulatory Commission). After approved, the companies concerned will obtain the Certificate of Approval for Investment of Foreign-invested Enterprises from local departments of Foreign Trade and Economic Cooperation |
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Minimum registered capital requirements
According to the regulations of the Company Law of PRC (revised in 2005), the minimum registered capital for limited liability companies should be no less than RMB 30,000. However, subsequent legal and administrative regulations have set a higher bar, with following requirements:
The minimum registered capital for specific industries is as follows:
Industry |
Minimum registered capital |
Wholesale and retail services |
RMB 30,000 |
Shareholding or individually owned travel agencies |
RMB 2,500,000 |
Advertising |
USD 300,000 |
Management consulting |
RMB 100,000 |
International maritime freight transport |
RMB 5,000,000 |
International air freight forwarding |
RMB 3,000,000 |
International road freight forwarding / International Express |
RMB 2,000,000 |
International freight forwarding agency |
USD 1,000,000 |
Wholly-owned shipping services |
USD 1,000,000 |
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After setting up wholly-owned enterprises or joint ventures in the Mainland, when long should the enterprises want until they are allowed to establish subsidiaries?
The enterprises can set up subsidiaries at any times, depending on their business development, in accordance with the laws and regulations of the Mainland. (except for the specific requirements on freight forwarding agencies. Please refer to information about freight forwarding agency lin this document).
How can existing enterprises restructure themselves into wholly-owned enterprises (enterprises with investment in the Mainland)?
The investors may transfer shares among themselves so as to restructure the enterprises into wholly-owned enterprises. Also, wholly-owned enterprises can be established through mergers and acquisitions, as long as they comply with relevant regulations on mergers and acquisitions of domestic enterprises by foreign investors.
Can Macao branches of foreign companies enjoy the benefits of CEPA in entering the Mainland market?
If they fulfill the definition of a service supplier stipulated in Annex 5 of CEPA, they are entitled to the benefits of CEPA.
CEPA has stipulated that a company which is set up to provide particular services only for its parent company cannot enjoy the benefits of CEPA. If that company provides services not only to its parent company but also to other customers, can it enjoy the CEPA benefits?
It will depend on whether the services provided by the company are the same as those provided in the Mainland.
Application procedures (to become a lawyer in the Mainland after qualified to practice law)
- Must have completed an one-year internship in a Mainland law firm.
- Having finished the required training and proved qualified, the lawyer must apply for the license to practice law from the competent provincial judicial administrative departments in accordance with regulations.
- Submit copies of his or her identification documents and criminal record notarized by Hong Kong or Macao notaries who are China appointed attesting officers. Also, the applicant should clearly state whether he or she has already obtained the qualifications to practice law in Hong Kong, Macao, Taiwan or foreign countries, and whether he or she was employed by any law firms in the mentioned regions.
- A list of Hong Kong and Macao applicants permitted to practice law in the Mainland and relevant materials for their registrations should be submitted to the Ministry of Justice for archiving within 30 days after competent provincial judicial administrative departments have verified and approved the issuance of practicing licenses.
Association of Hong Kong, Macao and Mainland law firms
- In accordance with the General Principles of Civil Law in the Mainland, law firm cooperation in the form association can be classified into three categories, namely association between juridical persons, partnerships and contractual association.
- Cooperation between Hong Kong and Macao law firms in the form of association refers to Hong Kong or Macao law firms that have set up representative offices in the Mainland to operate in association with one Mainland law firm that are located in the same region as their representative offices to provide legal service to their clients in Hong Kong and Macao in accordance with the rights and obligations stipulated in the agreement.
- During the duration of the association, the legal status of the Hong Kong or Macao law firms and the Mainland law firms, the company names, and their properties remain independent. Also, the Mainland and the Hong Kong or Macao law firms will assume civil responsibilities independently.
Requirements and procedures to acquire the qualifications to sit for the State Judicial Examination
- According to relevant regulations, Macao permanent residents with Chinese citizenship are allowed to sit the legal qualifying examination of the Mainland. The application requirements, application time, subjects of the examination, scope of the examination, examination schedule, rules on referencing, passing criteria and award of the qualification are stipulated in the Interim Implementation Measures for State Judicial Examination, as well as other unified requirements for the Mainland’s judicial examination.
- During enrollment, the following valid documents must be submitted to the application authority:
(1) Identification documents
(2) Documents of academic qualifications
- If enrollment is carried out in the Mainland, proof for the applicants’ employment, study or residence in the Mainland must also be submitted.
- Qualified examinees who have passed the examination will be awarded the legal professional qualifications after verified and approved by the Ministry of Justice.
- After obtaining the legal professional qualifications, Macao lawyers are recognized as qualified lawyers and allowed to practice laws in the Mainland.
For more information on the examination, please visit the website of the Ministry of Justice ( http://www.legalinfo.gov.cn ) or the website of the Macao Legal Affaires Bureau (http://www.dsaj.gov.mo).
Accounting, and Auditing Services |
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Required annual residence for accountants under CEPA
According to Article 8 of the Provisions on Verification and Approval of the Registration of Chinese Certified Public Accountants with Foreign Nationalities, Chinese Certified Public Accountants with Foreign Nationalities must have worked in the Mainland for more than 6 months in a year. What amendments have been made to this stipulation in CEPA?
Under the commitments in CEPA, since 1st January, Macao auditors and accountants who have already been qualified as Chinese Certified Public Accountants (CPAs) and are allowed to practice in the Mainland (including partnership) are treated on par with Chinese CPAs in respect of the requirement for annual residence in the Mainland.
How much is the application fees for extending the validity period of the “Temporary Audit Business Permit”?
Starting from 1st January, 2004, no applications fees is charged for the “Temporary Audit Business Permit”.
Architectural and Real Estate Services |
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Real estate services on a fee or contractual basis are mainly divided into 2 types:
- Real estate intermediary services: consultancy, real estate valuation and brokerage activities.
- Property management services (excluding hotel management): owners pay all relevant costs in accordance with relevant property service contracts. In general, services include maintenance, conservation, and management of the premises, fixtures and fittings, and the related areas, as well as keeping the locations clean and orderly.
Medical and Dental Services |
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Application formalities for those who wish to sit the Mainland medical qualification examination
- In accordance with CEPA, examinees must have acquired the relevant academic qualifications and have practice in the SAR for at least a year.
- The examination center for the Macao permanent residents who are to sit the Mainland medical qualification examination will be set up in Zhuhai, Guangdong Province.
- In accordance with the Law for Medical Practitioners of the People’s Republic of China and the Interim Measures on Medical Qualification Examinations, enrollment for the examination should be made before the announced deadline of each year.
- The Macao Health Bureau is responsible for coordinating the enrollment for the examination in Macao. For any enquiries, please call 28713734 or 28713735 (Medical License Division).
- Applicants need to fill in the “Application for verification to sit the National Medical Qualification Examination by Permanent Residents of Macao SAR” and the “Application for Sitting the National Medical Qualification Examinations and Conferment of the Medical Qualifications to Permanent Residents of the Hong Kong and Macao Special Administrative Regions”.
- Submit relevant required documents
- The Zhuhai Medical Qualifications Examination Office and the Medical Qualifications Examinations Board of Guangdong Province will issue admission certificates to qualified candidates.
For relevant details about the examination, please visit the websites of the Ministry of Health of PRC (http://www.moh.gov.cn) or the National Medical Examination Center (http://www.nmec.org.cn).
Procedures for establishing wholly owned advertising companies
- Advertising services is a non-restricted item for foreign investment in the Mainland.
- Macao companies must obtain approval from the State Administration for Industry and Commerce and the Ministry of Commerce before proceeding with relevant company registration.
- Company registration must be carried out in accordance with the “Provisions on the Administration of Foreign-invested Advertising Enterprises”.
Management Consulting Services |
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Management consulting services include the following services:
Management consultancy services, including general management consulting services, financial management consulting services (except industrial tax), marketing management consulting services, human resources management consulting services, production management consulting services, public relations services and other management consulting services.
Can a management consulting company provide services across the country?
Management consulting companies can provide services in any parts of the Mainland.
Convention and Exhibition |
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Is it possible for Macao convention and exhibition companies to host international exhibitions in the Mainland? Can they organize Mainland companies to participate in exhibitions outside the Mainland?
- Companies must apply for authorization to host international exhibitions in the mainland in accordance with the Interim Administrative Measures on International Economic and Technological Exhibition in the Mainland.
- Organizing Mainland enterprises to participate in exhibitions held overseas is not permitted at the moment; however, Mainland enterprises set up by Macao Service Suppliers may provide services for outbound exhibitions held in Hong Kong and Macao.
Are Macao companies allowed to open RMB bank accounts to receive payment for the convention and exhibition services provided by their Mainland companies? Are the participation fees for Macao exhibitors the same as those of Mainland exhibitors?
- They can open RMB bank accounts to receive payment.
- Macao exhibitors participating in Mainland exhibitions should be charged on par with the exhibition fees for foreign exhibitors.
What is the minimum registered capital requirement?
There is no minimum registered capital requirement, but companies should be established in accordance with the regulations stipulated in the “Company Law”.
Can a Macao company apply for an exhibition permit not through relevant agencies in the Mainland? What are the procedures and rules? Can the company provides services across the Mainland?
- The exhibition permit can be applied directly by the company.
- The applications should be carried out in accordance with the Interim Administrative Measures on International Economic and Technological Exhibition in the Mainland. Upon approved, companies can provide relevant services across the country.
Value-added Telecommunications |
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Procedures for establishing value-added telecommunication companies in the Mainland
- Macao companies are only allowed to establish joint ventures with Mainland companies in providing telecommunications services. Also, applications should be made by the Chinese partner of a joint venture.
- There are three stages in the examination and approval procedures.
Stage One: Setting up a company
- For inter-provincial telecommunications services, applications should be approved by the Ministry of Information Industry of the People’s Republic of China.
- For intra-provincial telecommunications services, applications can be submitted to the provincial, regional or municipal departments of communications administration, together with relevant feasibility studies. After approved by the local departments of communications administration, the applications will be forwarded to the Ministry of Information Industry, and the “Opinions on the Approval of Telecommunications Services Provided by Foreign Invested Telecommunications Companies” will be issued.
Stage Two: Evaluation and approval of the contracts and memorandums of the joint ventures
- Depending on whether the companies provide inter-regional or intra-regional services, the memorandums of the companies and their contracts will be submitted to the Ministry of Commerce directly or through the competent provincial, regional or municipal governments. After approved, the companies will be granted the “Certificate of Approval for Investment of Foreign-invested Enterprises”.
Stage Three: Application for the Telecommunications Operation License
- Qualified telecommunications operators that have obtained the“Certificate of Approval for Investment of Foreign-invested Enterprises” should apply to the Ministry of Information Industry for the Telecommunications Operation License.
Can Chinese movies produced by Hong Kong and Macao enterprises be distributed in the Mainland by themselves or through chosen partners?
- After examination and approval by competent Mainland authorities, Chinese language motion pictures produced in Macao can be imported for distribution in the Mainland on a quota-free basis.
- The imported movies should be distributed by the Film Import and Export Corporation of the China Film Group Corporation and the Huaxia Film Distribution Company Ltd in the Mainland.
- Movies distributors can decide the showing schedule of Hong Kong and Macao movies, depending on the situation of the market.
Can movies jointly produced by companies from both sides be developed in any chosen locations?
According to the implementation rules of the “Administrative Measures on Sino-foreign Co-operation in Film Production”, the development and post production of jointly produced movies can be carried out in Hong Kong or Macao after approval of the State Administration of Radio Film and Television.
Can copies of movies produced in Macao enter the Mainland market under the zero tariffs benefits of CEPA?
- Currently, copies of movies are not included in the first batch of zero-tariff products in Annex 1of CEPA.
- Thus, copies of Macao produced movies still cannot enter the Mainland market with zero tariffs.
- Nevertheless, movie producers can apply to the Macao Economic Services for including the products into the zero-tariffs product list according to relevant CEPA regulations
Please explain the definition and the business scopes of “commission agents”, “wholesaling” and “retailing”.
The Measures on the Administration of Foreign-invested Commercial Enterprises have come into effect since 1st June, 2004, regulating the business structure for commission agents, wholesalers and retailers.
Commission agent |
Sales agents, brokers, auctioneers or other wholesalers selling goods that belongs to a third party and providing relevant services through collecting fees on a contractual basis. |
Wholesaler |
Selling goods or providing relevant services to retailers, industrial or commercial institutional clients, or to other wholesalers. |
Retailer |
Selling goods for the consumption and use of individuals or groups or proving relevant services at fixed locations or through television, telephone, mail order, internet, and vending machines. |
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When establishing foreign trade companies in the Mainland, Macao companies must meet the requirements on the average trade volume and minimum registered capital in the past three years prior to application. Does ‘the past three years’ refer to accounting year or calendar year? Concerning calculation and declaration, will the Hong Kong and Macao accounting standards or those of the Mainland be used?
- “The past three years” here refer to accounting year.
- Concerning calculation and declaration, Hong Kong and Macao investors should follow the Hong Kong or Macao accounting standards respectively.
Are there any new regulations for establishing wholesale or retail companies according to CEPA?
The criteria and application procedures must comply with the regulations set out in the Measures on the Administration of Foreign-invested Commercial Enterprises, which have come into effect since the 1st June, 2004.
How can the existing joint ventures restructure into wholly-owned enterprises under CEPA? What are the relevant procedures?
- The companies must apply in accordance with current procedures.
- The companies must submit to the Ministry of Commerce for approval through the competent local Foreign Trade and Economic departments.
Is it possible for manufacturers to establish retail outlets to distribute their own products in the Mainland?
Those manufacturers can establish branches to distribute their own products.
Are there any specific laws and regulations governing franchising businesses wholly owned by Hong Kong and Macao manufacturers?
Operation of those franchising businesses must comply with relevant provisions in the newly promulgated the Measures on the Administration of Foreign-invested Commercial Enterprises.
The Chinese Government promised that three years after their entry to WTO, all foreign companies would be able to have import and export rights. Does it imply that even under CEPA, Hong Kong and Macao investors still have to wait one year before they can secure import and export rights?
Hong Kong and Macao investors, upon fulfilling CEPA requirements, can establish wholesale, retail and foreign trade companies in the Mainland and acquire import and export rights from the 1st January, 2004.
Can wholly-owned retail companies established under CEPA engage in motor vehicle distribution business, including retail sales of imported motor vehicles?
Macao companies can establish retail companies in the Mainland to sell motor vehicles, including imported motor vehicles.
Are after-sales services included in the distribution services under CEPA?
According to the definition of distribution services in China’s WTO commitments, the scopes of business opened up under distribution services in CEPA only includes commission agents, wholesaling, retailing, direct marketing and franchising.
Are individually owned stores set up by Hong Kong and Macao residents in Guangdong regarded as foreign-invested enterprises? What are the registration formalities?
- The individually owned stores set up by Hong Kong and Macao permanent residents with Chinese citizenship under CEPA are not considered foreign-invested enterprises.
- Applications should be carried out according to the "Interim Rules on Individually Owned Stores in Cities and Rural Areas". For registration purpose, Applicants must also provide relevant identification documents.
Can a person establish several outlets in the same city or town or in several different cities and towns? (The establishment of individually owned stores by Hong Kong and Macao residents in the Guangdong Province)
According to the "Interim Rules on Individually Owned Stores in Cities and Rural Areas", a natural person can only establish one individually owned store in the Mainland. The Rules are also applicable to Hong Kong and Macao residents who are to open individually owned stores under CEPA.
Do the business scopes of individually owned stores established by Hong Kong and Macao residents include imports and exports for their own businesses and relevant complementary services?
The business scopes of individually owned stores do not include imports sand exports related services.
How can the assets of a company group formed through integration or strategic alliance of Hong Kong or Macao insurance companies be calculated?
- When assets are valuated, only those related to insurance count.
- Assets of overseas insurance businesses owned by the Hong Kong and Macao insurance companies can be calculated.
- Assets of insurance companies that are under the group but are located outside Hong Kong and Macao will not be calculated.
Do the Mainland insurance qualifications cover insurance agents and insurance brokers?
The Mainland insurance qualifications refer to the qualifications required for the insurance agent, the insurance loss adjuster / assessor, and the insurance broker in the Mainland.
Can Hong Kong and Macao insurance brokerage companies enter the Mainland insurance market under CEPA?
When Hong Kong and Macao insurance brokerage companies enter the Mainland insurance market, they must comply with the regulations in relation to brokerage companies in China’s WTO commitments.
In order to take advantage of the CEPA benefits, what are the application procedures for Hong Kong and Macao banks?
When Hong Kong and Macao banks establish subsidiaries, corporations, and finance companies or when their Mainland subsidiaries apply for operation of RMB business in the Mainland in accordance with CEPA, they should comply with the implementation rules stipulated in the Regulations on the Administration of Foreign Financial Institutions of the People's Republic of China and the relevant operational details.
What is the definition of ‘Macao professionals’ in the securities industry?
Since there are still no specific regulations governing the registration of futures and securities professionals in Macao, the requirements for Hong Kong securities professionals are also applicable in Macao. In other words, the term ‘professionals in securities industry’ refers to Hong Kong permanent residents who have been holding relevant licenses issued by the Hong Kong Securities and Futures Commission in the last three years.
What are the formalities for Hong Kong professionals to apply for the Mainland qualifications?
Hong Kong securities and futures professionals can apply for the professional qualification and the practicing qualification in the Mainland in accordance with relevant simplified procedures. If applicants pass the required examinations and submit applications in compliance with relevant procedures in the Mainland, qualified applicants will be awarded the professional qualification recognized by the Securities Association of China or the China Futures Association.
What are the regulations and formalities for establishing joint venture travel agencies in the Mainland?
There will be no geographic restriction for Macao travel agencies forming joint venture travel agencies in which the Mainland agencies have majority shareholding in the Mainland.
The requirements and formalities are as follow:
- The required minimum registered capital is RMB 2.5 million
- The Hong Kong and Macao investors must be travel agencies or companies engaged primarily in tourism business. Their total annual revenue must be over USD 25 million, and they must be members of relevant travel industry associations in the Mainland.
- Applications can be submitted to the China National Tourism Administration and the Ministry of Commerce for approval through local competent departments.
Maritime transport services |
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Can Hong Kong and Macao shipping companies engaged in non-liner vessels business establish wholly-owned shopping companies in the Mainland under CEPA and provide relevant services for their own vessels?
Yes, they can.
Can Macao companies engage in shipping and cargo loading and unloading services in the Mainland as wholly-owned enterprises?
Yes, they can.
What are the customs procedures for Macao shipping companies utilizing liner vessels to move self-owned or leased empty containers in any Mainland ports?
- Firstly, the company needs to obtain the ‘Certificate of Empty Containers Movement Record for International Liner Vessels Operators’ issued by the Ministry of Communications of the People’s Republic of China. Also, the company or its agent must prepare the ‘Container Movement List’ and declare it to local customs services.
- The contents of this List include: loading or unloading of the containers, name of the vessel with loaded containers, shipping schedule, date, name of the vessel with empty containers, container number, container type, destination port, and number of containers, etc.
- When empty containers are being discharged, the vessel owner or its agent must present the Certificate and the List to local customs services. The local customs services will examine and verify the List and seal the containers, with a copy of the List inside.
- When empty containers are moved in, the vessel owner or its agent should submit the List to local customs services. The local customs services will then verify whether the List presented corresponds with the List sealed in the containers. If it does, the local customs services will give out loading or unloading instruction to port management departments.
- For containers that are to be moved to two or more ports, the customs from which the containers are moved out will seal up the containers in accordance with the List. The customs to which the containers are moved in must proceed with corresponding container movement according to the mentioned procedures.
Can ship management companies set up by Hong Kong and Macao companies in the Mainland under CEPA recruit crew members directly in the Mainland instead of through any agents or intermediaries?
According to Article 30 of the ‘Regulations of the People's Republic of China on International Maritime Transportation’, international ship management companies can be commissioned by shipping companies to provide crew recruitment, training and other supplementary services. If the services provided involve exports of services of crew members, relevant regulations must be complied
What are the application procedures and the minimum registered capital to establish a Hong Kong or Macao wholly-owned shipping company in the Mainland? How long after a shipping company has come into operation before they are allowed to open a branch? What is the minimum registered capital required for the branch?
- The application for establishing a wholly-owned shipping company has to be carried out in accordance with the ‘Provisions on Administration of Foreign Investment in International Maritime Transportation’ of the Ministry of Communications and the Ministry of Commerce.
- The registered capital must not be less than US$ 1 million.
- Subsidiaries can be set up one year after the company has come into operation.
- For every subsidiary established, the registered capital of the parent company should be increased by US$ 120,000.
What is the difference between the ‘road transport services’ and ‘road freight transport services’ in CEPA?
Road Freight Transport Services |
Direct Non-Stop Road Freight Transport Services |
Refers to the activities of using trucks for freight transportation on highways, and on roads in urban or rural regions. |
Refers to point-to-point express road freight transport between cites or provinces in Hong Kong / Macao and in the Mainland. The trucks passing through other cities or provinces during transportation must not be used in any other freight transportation activities. |
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Macao companies must establish equity or contractual joint ventures in the Mainland, after approval of the Ministry of Communications and the Ministry of Commerce, so as to provide direct non-stop road freight transport services.
What are the differences between direct non-stop road freight transport services and the existing freight transport services between the Mainland and Hong Kong / Macao? Is there only one terminus in the Mainland is allowed for direct non-stop road freight transport services?
There are three major differences:
Difference |
Direct Non-Stop Road Freight Transport Services |
Guangdong-Hong Kong or Guangdong- Macao Direct Non-Stop Transport Services |
(1) Different points of operation |
The possible destinations for Direct Non-Stop Road Freight Transport Services cover all Mainland provinces, municipalities and autonomous regions, including the Guangdong Province. |
Guangdong only . |
(2) Different eligible operators |
Services can only be provided through equity or contractual joint-ventures or wholly-owned enterprises set up by Hong Kong or Macao service suppliers in the Mainland. |
Not restricted to Hong Kong or Macao service suppliers |
(3)Different competent authorities |
The services are directly regulated by relevant departments under the Central Government or local competent authorities. |
The services are regulated by relevant Guangdong departments delegated by the Central Government. |
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Generally, only one terminus in the Mainland is allowed for direct non-stop road freight transport services. However, due to special needs for loading and unloading of goods in various provinces, municipalities or autonomous regions, more than one terminus, after approval by competent departments of public security, communications and commerce, will be allowed as exceptional cases.
Can trucks registered for direct non-stop road freight transport services also engage in road freight transport business in the Mainland?
Trucks registered for direct non-stop road freight transport services are still regulated under the Double Licensing System. Therefore, basically, trucks that have registered to provide direct non-stop road freight transport services are not allowed to provide road freight transport services in the Mainland.
What are the application procedures for Hong Kong and Macao companies engaging in road freight transport services and direct non-stop road transport services? Is there any minimum registered capital requirement?
Applications should be submitted to local competent municipal departments of communications, through which the applications will be transferred for approval to the Ministry of Communications and the Ministry of Commerce, in accordance with the ‘Regulations on the Administration of Foreign Investment in Road Transport Services’. There is no minimum registered capital requirement for setting up road transport companies. However, the applicant company should possess capital, facilities, premises and personnel that correspond to the scale of the business to be established and the scopes of the services to be provided.
What are the definition of ‘warehousing services’ and the scope of business?
- According to Article 381 of the Contract Law, A warehousing contract is ‘a contract whereby the warehouser stores the goods delivered by the depositor, and the depositor pays the warehousing fee’.
- According to this definition, warehousing services refer to a type of services in which the warehouser stores the goods delivered by the depositor, and receive warehousing fees from the depositor.
- The scope of warehousing services include various types of warehousing services, such as refrigerated warehousing and storage of fresh and live goods. However, bonded warehouses must be approved by competent customs authorities.
Aside from providing warehousing services for general goods, can Hong Kong and Macao invested warehousing companies build warehouses for self use and can they provide bonded warehousing services?
They can build warehouses for self use but operation of bonded warehouses requires prior approval from the Customs authorities.
Is there any minimum registered capital requirement for Hong Kong and Macao wholly-owned warehousing companies and what are the application procedures? What are the requirements for setting up branches?
- There is no minimum registered capital requirement for warehousing companies established by Hong Kong and Macao service suppliers and subsidiaries can be set up after the companies have come into operation.
- Direct application can be made to the local commercial administration authorities, which will proceed with evaluation and approval procedures in accordance with their delegated competence.
- If the total investment is over US$30 million, approval should be obtained from the Ministry of Commerce through the local commercial administration departments.
Freight forwarding agencies |
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What is the business scope of freight forwarding enterprises?
The freight forwarding service sector conceded under CEPA refers to international freight forwarding agency services. Its definition and business scope are as follows:
International freight forwarding agency services |
Deals with international freight forwarding and relevant businesses for their consignors in their consignors' name or their own name upon commission of the consignees or consignors of the imported and exported goods, and collects remunerations for the services it provides |
Business scope |
It includes:
- booking (ship leasing, air chartering and cabin chartering), consigning, storing and packaging
- supervision of loading and unloading of goods, consolidating and devanning, distribution, transferring and relevant short-distance transport services
- acting as an agent to make customs declarations, check and inspection, and to purchase insurance
- preparing the relevant documents, paying for the freight, settling and paying the miscellaneous expenses;
- transportation consulting services
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What are the minimum registered capital requirements and the conditions to set up branches?
- There are different requirements for different businesses:
- RMB 5 million for maritime freight businesses.
- RMB 3 million for air freight businesses.
- RMB 2 million for road freight businesses.
- An additional RMB 0.5 million is required for each branch established.
- Branches may only be set up after one year of the establishment of the international freight forwarding enterprise.
Are there any restriction concerning the use of freight facilities such as airports in the Mainland?
There are no restrictions.
If Hong Kong and Macao invested freight-forwarding companies handle air cargo, is approval from the General Administration of Civil Aviation of China needed apart from the approval of the Ministry of Commerce?
No approval is required from the General Administration of Civil Aviation of China if a wholly-owned international air freight forwarding enterprise is to be established.
Is it true that a logistics company after obtaining the operation license can provide various services such as road transportation, warehousing, loading and unloading, processing, delivery, consultancy and freight forwarding? What are the application procedures? What is the minimum registered capital requirement? How long the company has come into operation before it can establish a branch? Are there any minimum registered capital requirements for the branch?
- Different business licenses must be obtained according to the requirements of the businesses applied.
- When establishing foreign investment logistics enterprises, applications must be submitted to the local commercial administrative departments, with subsequent approvals issued by the Ministry of Commerce. ( which make a written decision within 30 days on whether to approve the application)
- According to the Circular on the Relevant Issues Concerning the Experimental Establishment of Logistics Enterprises with Foreign Investment from the Ministry of Commerce, foreign invested logistics enterprises must follow the minimum registered capital requirements and other criteria set out in the Measures on the Administration of Foreign-invested Commercial Enterprises, the Measures for the Administration of Foreign-funded International Freight Forwarding Enterprises, the Provisions on the Administration of Foreign-funded Road Transport Services and other laws and regulations related to foreign investment according to the services provided.
What are the differences in the definitions of ‘General road freight transport’ and ‘Domestic freight forwarding’? What are their respective business scopes?
Domestic freight forwarding |
General road freight transport |
It is a subsector of the road transport services. The operators serve as the agents of the owners of the goods but do not directly handle cargo transportation. |
The operators directly handle cargo transportation. |
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Can Hong Kong and Macao express delivery companies establish wholly-owned logistics companies in the Mainland to provide international express services?
Wholly-owned logistics companies can be established in the Mainland according to CEPA regulations, and international express services can be provided according to the regulations in the Measures for the Administration of Foreign-funded International Freight Forwarding Enterprises.
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