China Regulatory Brief: Revision to Legislation Law and Requirements for Labor Dispatch Organization

March 9, 2015 Posted by China Briefing Reading Time: 4 minutes

Guangdong Filing Procedures for HK and Macau Service Providers Released

The Ministry of Commerce (MOFCOM) recently released the trial version of the “Administrative Provisions on Record Filing Systems for Hong Kong and Macau Service Providers in Guangdong,” which came into effect on March 1, 2015. The Provisions require Hong Kong and Macau-invested service providers to file corporate information with the Ministry of Commerce (MOFCOM) foreign investment credit archive system. The information needs to be submitted annually to the system before June 30.

The report needs to include details like corporate address, registered capital, business scope and equity proportions.

China Plans Landmark Revision to Legislation Law

Every year in early March, the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference hold their annual meeting. Colloquially known as the “Lianghui” or “The Two Meetings,” these two sessions are often used to introduce major legislative changes.The Lianghui are currently being held in Beijing.

On March 8, the NPC commenced the third review of the draft amendment of China’s Legislation Law. If completed, it would be the first revision of the Legislative Law, introduced in the year 2000. As the current draft stands, the creation of abolition of a tax or levy would need to be enacted by formal statute and passed by the NPC.

Currently, only three of China’s eighteen are incorporated in a formal statute. These are the Individual Income Tax, the Corporate Income Tax and the Vehicle and Vessel Tax. In addition, 235 prefecture-level cities may be granted the legislative power for local regulations and laws.

China Releases Requirements for Labor Dispatch Organization

The Chinese Academy of Labor and Social Security and two industry organisations, at the request of the Chinese government, jointly released two draft regulations, the “Basic Requirements of Labor Dispatch Organization” and the “Requirements for Labor Dispatch Services.” The documents suggest that investors wishing to establish a labor dispatch agency should meet the following requirements:

Obtain the “Labor Dispatch Business License” with the local Human Resource and Social Security Bureau;
Be registered with the Administration for Industry and Commerce with a business scope covering providing labor dispatch services; and
Have a registered capital of no less than RMB 2 million.

The regulations are still in a draft stage, awaiting public comment.

China Encourages Individuals to Invest in Museums

China’s State Council recently released the “Museum Provisions” to encourage private enterprises, social organizations and individuals to invest in the establishment of museums. The Provisions are the nation’s first specific regulation on museums, which clarify the establishment and closure procedures of a museum. It is encouraged to set up museums in former residences of famous people and old factories. Further, organizations and individuals setting up museums or making donations to museums will enjoy tax incentives provided by the government.

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