China Company Registration
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In order to further improve the administration of processing trade, the Ministry of Commerce issued the Circular on Issues Relating to the Strengthening of Processing Trade Administration in April 2007, stating that better control of access to processing trade would be exercised. Greater efforts would be made to check the operation ability and production capacity of processing trade enterprises, whereby indices such as environmental protection, energy consumption, staff employment and technological level of equipment are included in the assessment of the business performance and production capacity of the enterprises. Steps are taken to restrict enterprises from engaging in low value-added processing activities with high energy consumption and high pollution.
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Checking the business performance and production capacity of processing trade enterprises
An enterprise seeking permission to engage in processing trade should make truthful declarations when applying for the Processing Trade Enterprise Business Performance and Production Capacity Certificate, which will be inspected and verified by the competent commerce department on the spot. If necessary, the enterprise may be required to provide documentary proof relevant to the declarations made.
Strictly enforcing environmental protection standards and encouraging enterprises to save energy and reduce energy consumption
Processing trade enterprises should meet the criteria set by environmental protection departments for the emission of major pollutants like sulfur dioxide (SO2) and chemical oxygen demand (COD), and should not exceed the local average level of comprehensive energy consumption per unit production value. Enterprises which fail to meet the environmental protection and energy consumption standards or have caused environmental incidents will be banned from engaging in processing trade.
Improving the employment system
Processing trade enterprises should go through employment registration formalities as required by the local labour and social security department. They should attach importance to workers' welfare and observe the local provisions on minimum wage and social insurance payment. Enterprises which fail to complete employment registration formalities, meet the minimum wage standard, or comply with local regulations regarding social insurance payment, will not be permitted to engage in processing trade activities. Those that had been given approval prior to the issuance of the above circular would be ordered to make rectifications before a stipulated date, and those that fail to make rectifications before the stipulated date will be banned from conducting processing trade.
Accelerating the elimination of backward production capacity
In accordance with the Catalogue for the Guidance of Industrial Restructuring, enterprises using backward production processes and equipment listed under the eliminated category are prohibited from engaging in processing trade, and no approval will be given to processing trade involving the production of backward products listed under the eliminated category. New enterprises using processes and equipment under the restricted category will no longer be allowed to engage in processing trade activities.
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For further queries, please do not hesitate to contact ATAHK at anytime, anywhere by simply calling China hotline at 86-755-82143422, 86-755-82143512, or emailing to anitayao@citilinkia.com.