A foreign invested commercial enterprise means a foreign invested enterprise, which engages in following areas:
1. Agency with commission: selling other owned goods and providing related services by sales agency of goods, broker, or auctioneer or other wholesaler on the basis of contractual relationship.
2. Wholesale: selling goods and providing related services to retailer, industrial user, commercial user, organizational user and other wholesaler.
3.Retail: selling goods and providing related services to individual or collective consumer in fixed locations or by means of television, telephone, internet and automat.
4. Franchise: licensing of trademark, trade name and business mode by entering into a contract with others for the purpose of returns and license fee.
Effective December 11, 2004, all foreign investors are able to establish WFOEs in commercial sectors, hence the term Foreign invested Commercial Enterprise (FICE). The development has affected the following types of business activities in China.
1.Commission agency
2. Wholesaling
3.Retailing
4. Franchise stores
A wholesale FICE may carry out wholesaling, commission agency, import and export, and other auxiliary activities. FICEs may directly establish and operate new stores, and authorize others to open franchise stores.
The development has reduced the minimum registered capital previously required, lifted the geographical limitations and also simplified the approval procedures. There are, however, certain restrictions on the products and business activities related to China’s WTO commitments.
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