Wholly Foreign-Owned Medical Institutions Allowed in Shanghai Free Trade Zone

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Dec. 2 – The Shanghai People’s Government released the “Provisional Measures on the Administration of Wholly Foreign-Owned Medical Institutions in the China (Shanghai) Free Trade Zone (hufubanfa [2013] No.63, hereinafter referred to as the ‘Measures’)” on November 13, which specify the requirements and application materials for foreign investors who wish to set up wholly foreign-owned medical institutions in the Shanghai Free Trade Zone (Shanghai FTZ). Detailed information can be found below.

Establishment Requirements
According to the Measures, foreign investors applying to set up a wholly foreign-owned medical institution in the Shanghai FTZ shall be the legal persons that bear civil liabilities independently, and shall have engaged in the investment and management of medical institutions for more than five years.

Moreover, such foreign investors shall meet one of the following conditions:

  • Be able to provide internationally-advanced management experience, management modes and service modes of medical institutions;
  • Be able to provide internationally-advanced medical technologies and equipment; and
  • Be able to supplement or improve the local medical service capacity, medical technologies, medical funds and medical facilities.

A wholly foreign-owned medical institution to be established in the Shanghai FTZ shall satisfy the following conditions:

  • It shall be an independent legal person;
  • Its total investment shall be no less than RMB20 million; and
  • Its operating period shall not exceed 20 years (can be renewed).

Application Materials
Foreign investors applying to set up a wholly foreign-owned medical institution in the Shanghai FTZ shall submit the following materials to the competent industry and commerce authority in the zone:

  • Written application for the establishment of the medical institution;
  • Project proposal and feasibility study report;
  • Registration certificate of foreign investors (photocopy), identification certificate of legal representatives (photocopy) and bank credit certificate;
  • Project site selection report, project land use and lease certificate and project construction plan;
  • Certificate proving that the foreign investors have engaged in the investment and management of medical institutions for more than five years;
  • Articles of association of the wholly foreign-owned medical institutions to be established;
  • List of members of the board of directors of the wholly foreign-owned medical institution to be established;
  • Pre-approval notice of institution’s name;
  • Application materials for the establishment of the enterprise; and
  • Other materials specified by laws and regulations.

The relevant authorities will decide whether or not to approve such application within 40 days and issue the Establishment Approval Certificate for Medical Institutions, Approval Certificate for Foreign-invested Enterprise and Enterprise Business License to qualified applicants.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia.

For further details or to contact the firm, please email china@dezshira.com, visit www.dezshira.com, or download the company brochure.

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