State Administration for Industry and Commerce and Ministry of Commerce, Administration of Foreign-invested Advertising Enterprises Provisions

Promulgated: March 2 2004
Effective: as of date of promulgation
Interpreting authority: State Administration for Industry and Commerce and Ministry of Commerce
Applicability: "Foreign-invested advertising enterprises" is defined as Sino-foreign equity joint ventures or Sino-foreign cooperative joint ventures lawfully engaged in the advertising business, and wholly foreign-owned advertising enterprises (Article 2).
Investing in and establishment of advertising enterprises in the Mainland by investors from Hong Kong, Macao or Taiwan shall, mutatis mutandis, be handled in accordance with the Provisions (Article 21).
Application for including advertising businesses in the scope of business of foreign-invested enterprises shall, mutatis mutandis, be handled in accordance with the Provisions (Article 22).
Investment in advertising through merger or acquisition with domestic advertising enterprises shall be handled in accordance with relevant provisions on merger or acquisition with domestic enterprises by foreign investors and by the Provisions (Article 20).

Main contents: The Provisions specify the procedures, criteria and documents required for the establishment of Sino-foreign advertising joint ventures and wholly foreign-owned advertising enterprises as well as for the establishment of branches of such joint ventures and enterprises. To establish a Sino-foreign joint advertising enterprise, the parties should all be enterprises engaged in an advertising business and have been in operation for at least two years (Article 9). In the case of a wholly foreign-owned advertising enterprise, the investor should be engaged mainly in advertising and have been operating for at least three years (Article 10). Foreign-invested advertising enterprises applying to establish a branch should have fully paid in their registered capital and have an annual sales volume of not less than Rmb20 million (Article 11). Starting from the effective date of the Provisions, foreign parties of Sino-foreign advertising joint ventures are allowed to hold up to 70% of the equity interest. Wholly foreign-owned advertising enterprises will be allowed starting from December 10 2005 (Article 23). Service providers from Hong Kong or Macao are allowed to establish wholly-owned advertising companies in the Mainland from January 1 2004 (Appendix).
Related legislation: PRC Sino-foreign Equity Joint Venture Law (2nd Revision), Mar 15 2001, CLP 2001 No.3 p5; PRC Sino-foreign Cooperative Joint Venture Law (Revised), Oct 31 2000, CLP 2000 No.10 p4; PRC Wholly Foreign-owned Enterprise Law (Revised), Oct 31 2000, CLP 2000 No.10 p4; PRC Advertising Law, Oct 27 1994, CLP 1994 No.10 p19; Administration of Advertising Regulations, Oct 26 1987, CLP 1987 No.10 p6; Qualification Standards for Advertisers and Advertisement Broadcasters and Approved Wording for Advertising Business Guidelines
Repealed legislation: Establishment of Foreign Investment Advertising Enterprises Several Provisions, Dec 31 1994, CLP 1995 No.2 p4 and other documents in conflict with the Provisions