Administrative Provisions on Foreign-Invested Telecommunications Enterprises (Revised in 2016)

Order of the State Council of the People's Republic of China No. 666

February 6, 2016

(Promulgated by Order of the State Council of the People's Republic of China No. 333 on December 11, 2001, first revised in accordance with the Decision of the State Council on Revising the Administrative Provisions on Foreign-Invested Telecommunications Enterprises on September 10, 2008, and revised again in accordance with the Decision of the State Council on Revising Some Administrative Measures on February 6, 2016)

Article 1 For the purpose of satisfying the need to open up the telecommunications industry to the outside world and promoting the development of the telecommunications industry, these Provisions are formulated in accordance with the relevant laws and administrative regulations concerning foreign investment and the Telecommunications Regulations of the People's Republic of China (hereinafter referred to as the "Telecommunications Regulations").

Article 2 A foreign-invested telecommunications enterprise refers to an enterprise lawfully established by Chinese and foreign investors within the territory of the People's Republic of China by way of a Chinese-foreign equity joint venture to engage in telecommunications services.

Article 3 Foreign-invested telecommunications enterprises shall, in addition to observing these Provisions in their telecommunications business activities, abide by the provisions of the Telecommunications Regulations and other relevant laws and administrative regulations.

Article 4 Foreign-invested telecommunications enterprises may engage in basic telecommunications services and value-added telecommunications services, the specific business classifications for which shall be subject to the provisions of the Telecommunications Regulations.
The geographical areas in which foreign-invested telecommunications enterprises may conduct business shall be determined by the industry and information technology department under the State Council in accordance with the relevant provisions.

Article 5 The registered capital of a foreign-invested telecommunications enterprise shall comply with the following provisions:
1. The minimum registered capital for any enterprise that provides basic telecommunications services throughout the country or across different provinces, autonomous regions or municipalities directly under the central government shall be CNY1 billion, and for any enterprise that provides value-added telecommunications services, shall be CNY10 million;
2. The minimum registered capital for any enterprise that provides basic telecommunications services within a province, autonomous region or municipality directly under the central government shall be CNY100 million, and for any enterprise that provides value-added telecommunications services, shall be CNY1 million.

Article 6 The proportion of capital contributed by the foreign investor(s) in a foreign-invested telecommunications enterprise that is engaged in basic telecommunications services (other than radio paging services) shall not ultimately exceed 49%.
The proportion of capital contributed by the foreign investor(s) in a foreign-invested telecommunications enterprise that is engaged in value-added telecommunications services (including radio paging business as part of its basic telecommunications services) shall not ultimately exceed 50%.
The proportion of capital contributed by the Chinese and foreign investors in a foreign-invested telecommunications enterprise at different stages shall be determined by the industry and information technology department under the State Council in accordance with the relevant provisions.

Article 7 In order to engage in telecommunications business, a foreign-invested telecommunications enterprise shall not only meet the requirements specified in Articles 4, 5 and 6 of these Measures, but shall also meet those specified in the Telecommunications Regulations for engaging in basic telecommunications business or value-added telecommunications business.

Article 8 The major Chinese investor in a foreign-invested telecommunications enterprise that is engaged in basic telecommunications business shall meet the following requirements:
1. It is a lawfully established company;
2. It has capital and professional staff commensurate with its business operations; and
3. It satisfies the requirements of the industry and information technology department under the State Council applicable to prudence and specified industries.
The term "major Chinese investor in a foreign-invested telecommunications enterprise" as used in the preceding paragraph shall be the investor that makes the largest contribution among all Chinese investors and has a share of 30% or more of the total amount invested by all Chinese investors.

Article 9 The major foreign investor in a foreign-invested telecommunications enterprise that is engaged in basic telecommunications business shall meet the following requirements:
1. It has the status of a legal person enterprise;
2. It has obtained a license for engaging in basic telecommunications business in the country or region where it is registered;
3. It has capital and professional staff commensurate with its business operations; and
4. It has a record of good performance and operating experience in basic telecommunications business.
The term "major foreign investor in a foreign-invested telecommunications enterprise" as used in the preceding paragraph shall refer to the investor that makes the largest contribution among all foreign investors and has a share of 30% or more of the total amount invested by all foreign investors.

Article 10 The major foreign investor in a foreign-invested telecommunications enterprise that is engaged in value-added telecommunications business shall have a record of good performance and operating experience in managing value-added telecommunications business.

Article 11 To establish a foreign-invested telecommunications enterprise with a view to engaging in basic telecommunications business or value-added telecommunications business in two or more administrative regions of provinces, autonomous regions or municipalities directly under the central government, the major Chinese investor shall file an application with the industry and information technology department under the State Council and submit the following documents:
1. A project application report;
2. Proof of the qualifications of the investors in the joint venture or other relevant certification as specified in Article 8, 9 and 10 of these Provisions; and
3. Certification that the other requirements applicable to engaging in basic telecommunications business or value-added telecommunications business have been met, and other certification specified in the Telecommunications Regulations.
The department of information industry under the State Council shall examine the relevant documents as specified in the preceding paragraph as of the date on which the application is received. If the application made is to engage in basic telecommunications business, the examination shall be completed within 180 days and a decision made on whether to approve or decline the application; if the application made is to engage in value-added telecommunications business, the examination shall be completed within 90 days and a decision made on whether to approve or decline the application. If the application is approved, an Examination Decision on Foreign Investment in Telecommunications shall be issued; if the application is declined, the applicant shall be informed in writing and the reasons shall be given.

Article 12 To establish a foreign-invested telecommunications enterprise with a view to engaging in value-added telecommunications business within a province, autonomous region or municipality directly under the central government, the major Chinese investor shall file an application with the telecommunications administrative organ of the province, autonomous region or municipality concerned directly under the central government, together with the following documents:
1. Proof of qualifications or certification as specified in Article 10 of these Provisions; and
2. Certification or other documents demonstrating that the other requirements applicable to engaging in value-added telecommunications business as specified in the Telecommunications Regulations have been met.
The administrative organ of the province, autonomous region or municipality directly under the central government shall make a decision within 60 days of receiving the application. If the application is approved, it shall be transferred to the industry and information technology department under the State Council; if the application is declined, the applicant shall be informed in writing and the reasons shall be given.
The industry and information technology department under the State Council shall, within 30 days of receiving a decision to approve an application made by the telecommunications administrative organ of any province, autonomous region or municipality directly under the central government, complete its examination and decide whether to approve or decline it. If the application is approved, an Examination Decision on Foreign Investment in Telecommunications shall be issued; if the application is declined, the applicant shall be informed in writing and the reasons shall be given.

Article 13 The main contents of a project application report for the establishment of a foreign-invested telecommunications enterprise shall include: the names of and basic information on the parties to the joint venture, the total amount to be invested and the registered capital of the joint venture to be established, the proportions of the contributions to be made by the parties concerned, the type of business to be engaged in and the term of the joint venture, etc.

Article 14 To establish a foreign-invested telecommunications enterprise, if the investment project is subject to approval by the development and reform department of the State Council pursuant to state provisions, the industry and information technology department under the State Council shall, prior to issuing an Examination Decision on Foreign Investment in Telecommunications, transfer the application materials to the administrative department of planning under the State Council or the comprehensive administrative department of economy under the State Council for examination and approval. If the application materials are transferred to the administrative department of planning under the State Council or the comprehensive administrative department of economy under the State Council for examination and approval, the time limit for examination and approval as stipulated in Articles 11 and 12 of these Provisions may be extended by 30 days.

Article 15 To establish a foreign-invested telecommunications enterprise that is to be engaged in basic telecommunications business or value-added telecommunications business in two or more administrative regions of provinces, autonomous regions or municipalities directly under the central government, the major Chinese investor shall, on the basis of the Examination Decision on Foreign Investment in Telecommunications, submit to the competent commerce department under the State Council the contracts and articles of association of the foreign-invested telecommunications enterprise to be established; if the foreign-invested telecommunications enterprise is to be engaged in value-added telecommunications business within a province, autonomous region or municipality directly under the central government, the major Chinese investor shall, on the basis of the Examination Decision on Foreign Investment in Telecommunications, submit to the competent commerce department of the people's government of the province, autonomous region or municipality concerned directly under the central government the contracts and articles of association of the foreign-invested telecommunications enterprise to be established.
The competent commerce department under the State Council or the competent commerce department of the people's government of the province, autonomous region or municipality concerned directly under the central government shall, within 90 days of receiving the contracts and articles of association of the foreign-invested telecommunications enterprise to be established, complete its examination and decide whether to approve or decline the application. If it is approved, an Approval Certificate for the Establishment of a Foreign-invested Enterprise shall be issued; if it is declined, the applicant shall be informed in writing and the reasons shall be given.

Article 16 The major Chinese investor in a foreign-invested telecommunications enterprise shall first apply to register the enterprise at the administrative organ for industry and commerce by presenting the Approval Certificate for the Establishment of a Foreign-invested Enterprise, and then apply to the competent authority of industry and information technology under the State Council for a telecommunications business operating license by presenting the Approval Certificate for the Establishment of a Foreign-invested Enterprise and the enterprise's business license.


Article 17 To engage in cross-border telecommunications business, a foreign-invested telecommunications enterprise shall obtain approval from the industry and information technology department under the State Council and conduct such business through the Entry and Exit Bureau of International Telecommunications established upon the approval of the industry and information technology department under the State Council.

Article 18 Any person who violates Article 6 of these Provisions shall be ordered by the industry and information technology department under the State Council to take remedial action within a prescribed period of time and be fined between CNY100, 000 and CNY500, 000. Where the violator fails to take remedial action within the period of time prescribed, the industry and information technology department under the State Council shall revoke its Telecommunications Business Operating License and the competent commerce department that issued the Approval Certificate for the Establishment of a Foreign-invested Enterprise shall revoke such certificate.

Article 19 Any person who violates Article 17 of these Provisions shall be ordered by the industry and information technology department under the State Council to take remedial action within a prescribed period of time and be fined between CNY200,000 and CNY1 million. Where the violator fails to take remedial action within the period of time prescribed, the industry and information technology department under the State Council shall revoke its Telecommunications Business Operating License and the competent commerce department that issued the Approval Certificate for the Establishment of a Foreign-invested Enterprise shall revoke such certificate.

Article 20 Where any person obtains approval by presenting false or counterfeit proof of qualifications or certification in making its application to establish a foreign-invested telecommunications enterprise, the approval shall be invalidated and the violator shall be fined between CNY200,000 and CNY1 million by the industry and information technology department under the State Council, its Telecommunications Business Operating License shall be revoked, and the competent commerce department that issued its Approval Certificate for the Establishment of a Foreign-invested Enterprise shall revoke such certificate.

Article 21 Any foreign-invested telecommunications enterprise that violates the Telecommunications Regulations or any other relevant laws or administrative regulations in the course of its telecommunications business shall be punished by the relevant administrative organ(s).

Article 22 These Provisions shall apply to companies and enterprises from the Hong Kong and Macao Special Administrative Regions and Taiwan that invest in the Chinese mainland to engage in telecommunications business.

Article 23 These Provisions shall come into effect on January 1, 2002.