SHANGHAI, Jan. 1 – On  October 1, 2006, the Shanghai Municipal Government issued a notice delegating authority for approving certain categories of Foreign Invested Commercial Enterprises (FICE) to the district level, in other words, to the level of administration below Shanghai Municipality (there are 18 districts and one county in Shanghai).

According to this notice, should the business scope of a proposed FICE be “wholesale,” it can be approved by the district level office of State Administration for Industry and Commerce (SAIC), rather than the municipal level. Meanwhile, FICEs in the retail business; those offering services in a fixed location or through television, telephone, mail order, internet, and automated means; and special types involved in grain, cotton, vegetable oil, edible sugar, medicines, cigarettes, automobiles, crude oil and other agricultural material manufacturing must still submit applications to the municipal SAIC in Shanghai.

However, this is further welcome step beyond the earlier delegation of approvals from the national Ministry of Commerce level to provincial and municipal SAICs in March 2006. It will be interesting to see what impact this move has on the time to achieve approvals, and whether any other municipalities or provinces follow Shanghai’s lead. As we noted in the November issue of China Briefing, Guangdong has recently put in place some measures to “fast track” applications, with approval times down to less than one month for most cases.

Dezan Shira & Associates maintain an office in Shanghai, advising foreign investors on legal administration, corporate establishment, due diligence and tax policy in the city. Please contact Olaf Griese or visit the Shanghai office website for more information.