China Promulgates Regulations on Administration of Foreign-Invested Partnership Enterprises

On November 25, 2009, State Council promulgated the Administration Regulations on Establishment of Partnership Enterprises in China by Foreign Enterprises or Individuals (“Regulations”), which will become effective on March 1, 2010.

As ancillary administrative regulations to the PRC Partnership Enterprise Law (“Partnership Enterprise Law”), the Regulations have been promulgated under the framework of Partnership Enterprise Law to regulate the partnership enterprises established by foreign enterprises or individuals in China (“Foreign-Invested Partnership Enterprise”). 

Under the Regulations, the establishment of foreign founded partnership enterprises does not need the approval procedure by the government commerce authority. Apart from setting up new partnership enterprises, the foreign investor can also purchase the shares of an existing partnership enterprise.