On 18 May 2016, the Ministry of Commerce (MOFCOM) issued the Measures on the Administration of the Record-filing of Hong Kong and Macau Service Suppliers Investing in the Mainland (Trial)(商务部公布《港澳服务提供者在内地投资备案管理办法(试行)) . The measures help to implement the Agreement on Trade in Services under CEPA (服务贸易协议), which was concluded by Mainland China and each of the Hong Kong Special Administrative Region and Macau Special Administrative Region in November 2015 (CEPA Agreement). The measures and each CEPA Agreement took effect on 1 June 2016.

The measures apply to the establishment and amendment of companies in the area of Trade in Services in Mainland China by service providers qualified under each CEPA Agreement, except in relation to each of the following:

To establish a company in Mainland China, the measures require qualified Hong Kong or Macau service providers to complete the record-filing procedure on MOFCOM’s online foreign investment record filing information system, after pre-approval of the company name (Article 7, the measures).

On completion, the newly established company is treated as a foreign invested enterprise (FIE). This means it must carry out post-establishment registration formalities with the other departments in charge, it is subject to China’s laws and regulations, and supervision as an FIE, and (where otherwise required) it must obtain approval to operate from an industry regulator.

After establishment, the measures require the company to use the online record-filing system to record any significant changes to the record-filing (Article 8, the measures).

If a qualified Hong Kong or Macau service supplier had already established a company before the measures took effect, the company subject to the measures is required to surrender its approval certificate and carry out an amendment of record-filing on MOFCOM’s online system (Article 9, the measures).

For more information on the CEPA Agreement, see Legal update, Hong Kong and Macau sign CEPA trade services agreements with Mainland.

To determine how to qualify as a Hong Kong or Macau service provider, see Practice note, Telecommunications and internet content regulation in China: overview, How to qualify as a Hong Kong or Macau service provider.

Source: Administration of the Record-filing of Hong Kong and Macau Service Suppliers Investing in the Mainland (Trial) (商务部公布《港澳服务提供者在内地投资备案管理办法(试行))