Wang Dan

1. Wang Dan
Guidance and Instruction Division
Enterprise (Foreign-Invested Enterprise) Registration Bureau,
State Administration for Industry and Commerce,
People’s Republic of China
March 2017
Overview on the Reform of Business System
And Facilitation of Enterprise Registration

2. To Government:
Easy entry and strict regulation
To Enterprises:
I am in charge of my company
I am responsible for my company
Relaxing market entry control, creating an
accommodative and convenient entry environment

3. Reform on registered capital of companies
Reform on “obtaining business license before getting
administrative permits”
Reform to establish the Registration System of “a Five-in-one
Business License with One Social Credit Code”
Reform to simplify domicile (place of business) registration
Complete electronic registration and electronic business license
Reform to simplify enterprise deregistration procedures
Reform to allow enterprises to report their chosen names
Reform on the registration of the business scope of enterprises
Eight reforming procedures on the control relax for
market entry

4. Before Reform
 Limited liability companies - ¥30,000 for
 One-person limited liability companies -
¥100,000 for
 Company limited by shares - ¥5 million for
 Limitation on scope of business
Minimum
requirements on
paid-up capital
 Initial paid-up capital shall be not less than
20 percent of registered capital.
 The remainder shall be fully paid up within
two years from the date the company is
incorporated.
 In the case of an investment company, it
must do so within five years.
Requirements on
payment period
 Paid-up registered capital
 Capital verification report
Payment of
registered capital
VS After Reform
Subscribed registered capital
Requirements lifted
Subject to agreement
Lowering the threshold of registered capital for
registration, helping start-ups to raise fund

5. Pre-
approval
Environmental
Protection
Hygiene
Food and Drugs
Regulations
……
general
businesses
businesses
subject to
permit
recruiting staff, renting premises,
building factories, getting loans
VS
Before
Reform
After
Reform
Post-
approval
Environmental
Protection
Hygiene
Food and Drugs
Regulations
……
general
businesses
businesses
subject to
permit
Reform on “obtaining business license before
getting administrative permits”, solving problems
of business qualification
Business
license
Business
license

6. Tax registration
certificate
Business license
Quality
Control
Taxation
Industry
and
Commerce
Organization Code
Tax registration No.
Registration No.
of enterprise
Business license Unified Social
Credit Code
Industry and
Commerce
Quality
Control
Taxation
StatisticsSocial
Insurance
Social
Insurance
Statistics
Social insurance
registration certificate
Statistic Certificate
Certificate of
Organization Code
VS
Before
Reform
After
Reform
Implementing “Five-in-one Business License with One
Social Credit Code”, enhancing administrative efficiency

7. Group registration
Secretarial companies,
centralized registration
Endorsing additional premises
One license with
multiple addresses
Maker space
One address for
multiple licenses
Registration of domestic premises,
garage companies
Residence
registration
Simplifying the registration of domicile,
enhancing utilization of premises

8. • Electronic documents and files with electronic signatures have the same legal
effect as the paper-based materials.
• Incorporating information security protection features, such as anti-forgery,
tamper-resistant and non-repudiation.
1 3 4
Electronic business
license 5
Application Processing
2
Vetting Issuance
Public
Notice
Complete electronic registration supported by
Electronic business license

9. Ordinary
deregistration
procedures
Set up a
liquidation team
Make public
announcement
Settle credits
and debts
Sort out assets
of the company
Set liquidation
plan
Distribute assets
of the company
Prepare
liquidation
report
Cancel
registration
Simplified
deregistration
procedures
Public announcement
+
Pledge
Cancel
registration
VS
Simplifying enterprise deregistration procedures,
establishing a convenient and orderly market exit
mechanism

10. Login to the
name reporting
system
Rules on
prohibited and
restricted names
Applicant
enquires and
checks against
the rules
Confirms no breach
of name rules and
reports the name
Measures to correct
inappropriate names
through the name
disputes handling
mechanism
Open enterprise
names database
Implementing pilot program for reforming registration
of enterprise name, exploring possibility of allowing
enterprises to report their chosen names

11. Industrial Classification
for National Economic
Activities
Types of industries
Industrial Classification for
National Economic Activities
Political documents
Industrial practices
Professional documentation
Types of industries
VSBefore Reform After Reform
Reform on the registration of the business scope , allowing
investors to decide their scope businesses for registration

12. According to the statistics, during the period from 1 March
2014 to end- January 2017,
A total of 43.87 million market entities were newly registered in
China.
Among them, 13.59 million were enterprises, 29.52 million were
privately or individually-owned businesses, and 829,700 were farmers’
professional cooperatives.
The number of daily average newly registered enterprises has increased
from 6,900 before the reform to 15,100 at present.
Statistics

13. Enterprise Information Publicity System
Supervision through inspections of randomly selected
entities by randomly assigned inspectors and public
release of inspection results
“Blacklist” mechanism
Information sharing and joint punitive action
Supervision via big data
Social co-governance
Six reforming procedures on the market regulation, for
maintaining a fair and competitive market environment

14. Supervision through publicity
Supervision through sharing
Enterprise Information Publicity System

15. (Issued by government departments) Administrative permits and administrative penalties, etc.
on enterprises’ credit information
(Provided by enterprises) Annual reports, instant information, etc.
Publicized information:
Enterprise Information Publicity System

16. Registration and
filing by market
entities
(87.6 million
entities)
Enterprises’
annual reports
(18.5 million
entities)
Enterprises’
instant
information
(17.5 million
messages)
Enterprises’
shareholders and
financing
(8.8 million
messages)
Changes of
shareholding
(1.6 million
messages)
Administrative
permits
(2.3 million
messages)
Administrative
penalties
(33,641
messages)
Number of
visitors of the
system
(31.6 billion)
Number of
enquiries made
to the system
(15.8 billion
cases)
Up to end-December 2016, the following information had been publicized
by the National Enterprise Credit Information Publicity System:
Enterprise Information Publicity System

17. Regulate law enforcement in the market
Resolving problems on enforcement such as arbitrary,
improper and lax enforcement and intrusive acts against
civilians
Random selection of entities for inspection
Random assignment of inspectors
Timely public release of inspection results
“One inspection, comprehensive examination”
Purposes
Requirements
Supervision through inspection of randomly selected
entities by randomly assigned inspectors public release
of inspection results

18. Number of enterprises included in the
List of Enterprises with Abnormal Operations:
4.7 million enterprises
Number of enterprises removed from the
Lists of Enterprises with Abnormal Operations:
689,500 enterprises
Enterprises Credit
Information Publicity SystemEnterprises will be included in the List of
Enterprises with Abnormal Operations
Failure to
submit annual
reports in
time
Failure to
observe the
rules to
publicize
information
Concealment
and trickery
found in the
publicized
information
Unable to
contact the
enterprises
through their
residences
“Blacklist” mechanism

19. Collusion in organizing or facilitation
multi-level marketing
Improper competitive acts
Suspension from acting as
trademark agency
Serious infringements on consumers’
rights and interests
Trademark infringements
Illegal direct marketing
Securing by fraudulent means change of
company particulars or cancellation of
registration, and de-registered entities
Blacklist
Publishing false advertisements
“Blacklist” mechanism
Credit Restriction
Cross-Departmental
Joint Punitive Action

20. An unified for publicized information on enterprises gathered
by different government departments - “Nationwide Network”
信息共享和联合惩戒Information Sharing and Joint Punitive Actions

21. Information sharing - “Nationwide Network”
Central Government –
56 Departments
Local Government –
31 Provinces
Offices of administration of industry and commerce across the nation
have provided a total of about 15.4 billion entries of data to other
departments and 7.18 million messages on joint punitive actions to
11,827 offices.
Information Sharing and Joint Punitive Action

22. Joint Punitive Actions Cooperation Memorandum on the Coordinated Supervision of and
Joint Discipline Actions and Penalties against Discredited Enterprises
Notice issued by the State Administration of Industry and Commerce on Taking
Credit Disciplinary Actions against Dishonest Persons According to the Law
Administrations for
Industry and Commerce
Supreme People’s Court
Departments of market
supervision
3.4 million
“long-term debtors”
71,084 persons
Legal representatives
Directors
Supervisors
Information Sharing and Joint Punitive Actions

23. Improving ability to assess and estimate risk
Promoting meticulous and scientific supervision
Reducing costs on supervision
Enhancing the effectiveness of supervision
Supervision by Big Data

24. Regulating market order
Enterprises
and its
trading
partners
Trade
associations
and chambers
of commerce
Media and
consumers
Launch pilot schemes on social
co-governance
Establish the concept of
“Internet Plus Market Regulation”
Tap into the forces of the market
and the society
Establish a new landscape of social
co-governance through corporate
autonomy, industry self-discipline,
social surveillance and government
supervision
Social Co-governance