Establishment of Foreign-controlled and Wholly Foreign-owned Travel Agencies Tentative Provisions

(Promulgated by the China National Tourism Administration and the Ministry of Commerce on June 12 2003 and effective 30 days thereafter.)

Article 1: These Provisions have been formulated in accordance with relevant Chinese laws on foreign-invested enterprises, the Administration of Travel Agencies Regulations and relevant provisions, in order to adapt to the new situation after China's accession to the World Trade Organization, further expand the opening of the tourism industry to the outside world and promote the development of the tourism industry.

Article 2: These Provisions apply to the establishment of foreign-controlled or wholly foreign-owned travel agencies within the territory of the People's Republic of China during the transition period before the time limit prescribed by China's WTO accession commitments.

Article 3: A foreign investor of the foreign-controlled travel agency to be established shall comply with the following conditions:

(1) shall be an enterprise that is a travel agency or that mainly engages in the tourism business;

(2) shall have an annual trade volume in tourism of at least US$40 million;

(3) shall be a member of the tourist industry association in its home country (region);

(4) shall have a good international reputation and experience in modern travel agency management; and

(5) shall comply with Chinese laws and relevant regulations on the Chinese tourism industry.

Article 4: In addition to complying with the conditions prescribed in Items (1), (3), (4) and (5) of Article 3 hereof, the annual trade volume in tourism prescribed in Item (2) of the foreign investor of the wholly foreign-owned travel agency to be established shall be at least US$500 million.

Article 5: A foreign investor of a foreign-controlled travel agency shall fulfil the conditions set forth in Article 29 of the Administration of Travel Agencies Regulations.

Article 6: The foreign-controlled or wholly foreign-owned travel agency to be established shall fulfil the following conditions:

(1) shall comply with tourism development planning;

(2) shall fulfil the needs of the tourism market;

(3) its investors shall fulfil the conditions prescribed in the aforementioned Articles 3, 4 and 5; and

(4) shall have registered capital of at least
Rmb4 million.

Article 7: Qualified foreign investors may establish foreign-controlled or wholly foreign-owned travel agencies in State holiday resorts approved by the State Council and in five cities: Beijing, Shanghai, Guangzhou, Shenzhen and Xi'an.

Article 8: Each foreign investor applying to establish a foreign-controlled or wholly foreign-owned travel agency generally shall be approved to establish only one travel agency.

Article 9: Application for establishment of foreign-controlled or wholly foreign-owned travel agencies shall be handled with reference to the examination and approval procedure for foreign-invested travel agencies stipulated in the Administration of Travel Agencies Regulations.

Article 10: Foreign-controlled or wholly foreign-owned travel agencies shall not engage in, or surreptitiously engage in, tourism business for Chinese citizens travelling abroad or people travelling to the Hong Kong and Macao Administrative Regions and the Taiwan region from other places in China.

Article 11: The China National Tourism Administration and the Ministry of Commerce are responsible for interpreting these Provisions.

Article 12: These Provisions shall be effective 30 days after the date of promulgation.