China has ratified new regulations that permit foreign companies to establish fully operational WFOE trading companies that can buy and sell in China-known as Foreign Invested Commercial Enterprises or FICEs.
The new regulations apply for the following five activities :- retailing - selling goods and related services to individual persons from a a fixed location, as well as through TV, telephone, mail order, internet, and vending machines
- wholesaling – selling goods and related services to companies and customers from the industry, trade or other organizations
- representative transactions on the basis of provisions(agent, broker)
- franchising
- import/export, distribution and retailing by existing manufacturing companies
- for wholesaling enterprises, RMB500,000
- for retailing enterprises, RMB300,000
Business duration is limited to 30 years for foreign trading companies set up in the developed coastal areas, such as Shanghai and the YRD. Foreign companies shall "possess a sound reputation and comply with Chinese law".
However, detailed implementation remains unclear, we are beginning to find evidence of some regional variations and there is something of a backlog of applications with MOFCOM in Beijing. A new guidance manual for applications was issued in early September and this may help to clarify matters. But if you are interested in this topic, seek expert professional advice for the most up-to-date situation.