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New PRC Policies on Annual Inspection




by:
Xinlan Liu
Sheppard Mullin Richter Hampton LLP - Los Angeles Office

 
March 5, 2014

Previously published on March 3, 2014

On February 19, 2014 the state-level General Administration for Industry and Commerce (the “AIC“) issued a notice to officially cancel the annual inspection for all types of enterprises including domestic entities, representative offices, branches and foreign invested entities since March 1st, 2014. Following this state-level AIC notice, many local AICs in Beijing, Shanghai, Guangdong, Hubei and Sichuan have also published their own respective notice of new rules and procedures governing their annual inspection this year.

In accordance with the state AIC’s notice, all of the local AICs have changed from annual inspection approval registration to annual inspection filing. From this year forward, all types of enterprises only need to complete online annual inspection in the AIC system instead of the previous requirement to complete both online and onsite annual inspections with AIC. Additionally, the enterprises only need to print out online the AIC approval notice as the record for their passing the annual inspection. Previously, enterprises needed to have their business license chopped by AIC.

This new policy has released enterprises from the previous heavy workloads of the annual tax return filing, the auditor’s report preparation and the annual inspections. But in any case, the auditor’s report is still necessary for enterprises to complete the online annual inspection filing because most of the information to be provided in the annual inspection filing system (e.g., business/production data, foreign investor’s equity data, etc.) is specifically based on the auditor’s report.

Procedures for the online annual inspection filing are as follows:

Step 1: Register in the AIC annual inspection system to obtain user name and password;

Step 2: Complete online filing of the required 14 forms;

Step 3: Review and finalize information and data provided in the filing forms;

Step 4: Complete online submission;

Step 5: Print electronic approval notice for annual inspection;

The fourteen forms to be completed shall include the following:

1. Enterprise Basic Information Form;
2. Preliminary Approval Information Form;
3. Foreign Investor Information Form;
4. Chinese Investor Information Form;
5. Capital Contribution Information Form;
6. Instalment Capital Injection Information Form;
7. Annual Production/Business Information Form;
8. Import & Export Information Form;
9. Overseas Investment Information Form;
10. Branch Information Form;
11. Confirmation Form for Foreign Investor’s Equity;
12. Company Secretary (Contact Person) Registration Form;
13. Information Form for Legal Document Receiver of Foreign Shareholder (Promoter);
14. Additional Information Form for New Industries[1]

There might be a slight difference in a specific requirement for the annual inspection from city to city. Therefore, we suggest that each enterprise contact its local AIC for more information about its online annual inspection filing for this year.

[1] If an enterprise is classified in the energy saving and environment protection industry, new IT industry, biology industry, high-tech equipment manufacturing industry, new energy industry, new material industry and new energy auto industry, it needs to complete this form to provide some additional information on its listing status, high-tech certification, etc.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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