Guangdong Streamlines the Registration Process for Foreign-Funded Companies

Posted on by Dezan Shira & Associates

According to the Department of Foreign Trade and Economic Cooperation of Guangdong Province and Guangdong Province Administration of Industry and Commerce (Guangdong AIC), a new streamlined registration and approval process for foreign-funded companies will be run across nine cities along the Pearl River Delta. The newly revamped procedures are currently being trialed in Dongguan, Foshan, and Guangzhou.

The discussion of streamlining the approval procedure came out of an article published in the Nan Fang Daily about the lengthy and complicated process a foreign-funded company went through to get registered in Guangdong. From the registration of the company name to the final approval, the company had to get permission from at least 10 different departments. Due to the number of government agencies involved in the process and the disjunction between them, the process could take up to one year or longer.

In response to the inconveniences associated with the existing registration and approval processes for foreign-funded companies, as well as to further implement the newly issued “Suggestions on Supporting the Acceleration of Guangdong’s Economic Transformation and Upgrading and the Construction of a Happy Guangdong (gongshangbanzi [2012] No.38)” (Suggestions), the Guangdong AIC is exploring a registration service that could be done mostly online and through a two-way courier service. Applicants in Dongguan and Guangzhou will be the first ones to benefit from this new streamlined system for processes including registration, approval, and issuance of business licenses and annual inspections.

Moreover, a parallel approval service with the provincial Development and Reform Commission and the provincial Supervision Department is under discussion, which looks to reduce the unnecessary waiting time.

This is not the first time that the Guangdong government has made efforts to streamline the registration and approval process for companies. According to China Daily, there have been four rounds of cuts in the number of required items for registering a company between 2000 and 2009. The government intends to reduce another 30 percent of the items required in the process in the near future.

Besides streamlining the approval process and setting up an online system, the State Administration for Industry and Commerce has granted Guangdong with the authority to handle the registration of enterprise names of foreign-invested companies (excluding those in administrative divisions). Previously, the Guangdong AIC was only authorized to register enterprise names of domestic enterprises (excluding those in administrative divisions).

This measure will largely ease the administrative burden for the registration of foreign-invested companies in Guangdong and reduce the processing time, as the application does not need to go all the way from the provincial authorities to Beijing for approval. Instead, foreign-invested enterprises can be registered with the Guangdong AIC directly.

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