The Ministry of Commerce has issued a notice that, as of March 6, 2009, it will partially delegate the examination and approval authority for the establishment and change of foreign-funded investment companies and other foreign-funded enterprises. This is also the second time that the Chinese government has delegated foreign investment approval power since last year.

According to the notice, the establishment of an investment company with a registered capital of US $100 million or less and its changes (except for a single capital increase of more than US $100 million) by foreign investors shall be examined and approved by the provincial, district and city where the investment company is registered, as well as the city specifically designated in the state plan, Xinjiang production and Construction Corps, and vice provincial city commerce departments (hereinafter referred to as provincial commerce departments), and the provincial commerce departments shall be responsible for the examination and approval It is not allowed to delegate or entrust other departments for approval.

An enterprise invested by an investment company, or an enterprise jointly invested with other investors, such as a foreign party (referring to an investment company and other foreign investors), whose foreign exchange investment proportion is not less than 25% of the registered capital of the enterprise to be invested, may enjoy the treatment of an enterprise with foreign investment.

According to the circular, where foreign investors and enterprises with foreign investment merge and acquire domestic enterprises, and the amount of encouraged and permitted M & A transactions is US $100 million or less, and the amount of restricted M & A transactions is US $50 million or less, it shall be examined and verified by the local competent commerce department together with the relevant departments of industry and commerce, taxation, foreign exchange, etc.

■ statements of all parties

Experts say it is conducive to the stability of foreign investment the European Chamber of Commerce in China welcomes

Zhang Shiguo, deputy director of the research department of China Association for overseas industry development and planning, said that decentralization of the examination and approval authority is conducive to giving full play to the enthusiasm of local governments to stabilize foreign investment, and also to the integration of foreign-funded enterprises' business in China.

Yesterday, a statement issued by the European Chamber of Commerce welcomed the move of the Ministry of Commerce.

The European chamber also said it hoped local governments could substantially improve the transparency of the approval process.