Ministry of Commerce and Hong Kong and Macao Affairs Office of the State Council, Verification Matters Concerning the Investment and Establishment of Enterprises in the Hong Kong and Macao Special Administrative Regions by Mainland Enterprises Provisions

Promulgated: August 31 2004
Effective: as of date of promulgation
Interpreting authority: Ministry of Commerce
Applicability: "Investment and establishment of enterprises in Hong Kong and Macao regions by Mainland enterprises" refers to investment and establishment by mainland enterprises of enterprises with legal person status at the locality in such areas as trade, project contracting, labour cooperation, production and manufacturing, communications and transportation, tourism, service industry, research and development, investment, and science and technology, as well as investment and establishment of enterprises in the Hong Kong and Macao regions by enterprises established in Hong Kong, Macao, or other countries or regions by mainland enterprises (Article 3). In case of a conflict between the previous administrative procedures and the Provisions, the Provisions shall prevail (Article 14).

Main contents: Investment and establishment of enterprises shall be made by way of new establishment (namely, wholly-owned enterprises, and equity and cooperative joint ventures), takeovers, mergers, equity participation, capital injection and equity exchange (Article 4). Verification authorities shall carry out enterprise application verification by considering whether it will be beneficial to the Mainland's reform, opening-up and modernized construction or beneficial to the prosperity and stability of the Hong Kong and Macao regions, whether it can make the most of the advantageous conditions of the Hong Kong and Macao regions to increase foreign trade and attract capital, advanced technology and management expertise, and whether it is beneficial to strengthening economic and technological cooperation between the Mainland and the Hong Kong and Macao regions (Article 6). Articles 8 to 12 detail the application procedures.
Related legislation: Mainland/Hong Kong Closer Economic Partnership Arrangement, Jun 29 2003; Mainland/Macao Closer Economic Partnership Arrangement, Oct 17 2003; PRC Administrative Licensing Law and State Council, Setting the Administrative Licensing for Administrative Examination and Approval Requirements that Truly Have to be Retained Decision