“Examination and approval for confirmation of encouraged foreign-invested enterprise projects” is cancelled

The China State Council had announced that effective from May 01, 2015, examination and approval for confirmation of encouraged foreign investment projects in China (Letter of Confirmation) is no longer required in order to speed up application process of duty-free imported equipment. How do we should response to this change? This “Letter of confirmation” has long been an important part in the process course of duty free equipment. What impacts would this change bring to us?
  • With regard to encouraged foreign-invested projects, the competent commerce departments will no longer issue the letter of confirmation on Domestic or Foreign-invested Projects Encouraged by the State, and will no longer review the list of equipment imported duty-free for foreign-invested companies.

  • Before issuing the Approval Certificate to companies, the competent commerce departments will enter required information into a database centre of foreign investment projects.

  • As for new companies (including those who have made capital increase) approved before 22 July 2014 but without Letter of confirmation and those approved to set up between July 22,2014 to April 30, 2015, if their establishment falls under the encouraged industries in the Catalogue for the Guidance of Foreign Investment Industries or under the foreign investments in the Catalogues of Foreign-invested Advantage Industries in Central and Western China, the competent commerce departments will require a Summary Table for the Information on Encouraged Foreign-invested Projects to be completed.

Case suggestions:

  • Should carefully look into the catalogue of the Encouraged Foreign–invested Projects to see if there is any items of your business scope falls within the “catalogue” and complete details for the Summary Table for the Information on Encouraged Foreign –invested Projects.

  • Strengthen the effective communication with the customs and the relevant departments before the event in order to avoid unnecessary problems during the application process under the new system adjustment.

  • Keep abreast of changing procedures due to the change at all time. Make necessary changes in business operation to respond positively to adapt any arising problems and to gain more benefits instead.

As the new policy is still in pilot run phase, different regions have progress of implementing the policy, we will keep you informed of updates and provide further suggestions on this.