Administrative Provisions on Foreign-funded Telecommunications Enterprises

Release Date: 2022-03-29

Effective Date: 2022-05-01

Chinese Title: 外商投资电信企业管理规 (2022修订)

(Promulgated on 11 December 2001 under Decree No. 333 of the State Council of the People’s Republic of China, revised for the first time on 10 September 2008 pursuant to the Decision of the State Council on the Revision to the Administrative Provisions on Foreign-funded Telecommunications Enterprises, revised for the second time on 6 February 2016 pursuant to the Decision of the State Council on the Revision to Certain Administrative Regulations, and revised for the third time on 29 March 2022 pursuant to the Decision of the State Council on Revision and Abolition of Certain Administrative Regulations)

Article 1 These Provisions are enacted pursuant to the relevant foreign investment laws and administrative regulations and the Telecommunications Regulations of the People’s Republic of China on (hereinafter referred to as the Telecommunications Regulations) for the purposes of adapting to the needs of opening up of the telecommunications industry and promoting development of the telecommunications industry.

Article 2 Foreign-funded telecommunications enterprises refer to enterprises established by foreign investors pursuant to the law within the territory of the People’s Republic of China to engage in telecommunications services.

Article 3 Foreign-funded telecommunications enterprises engaging in telecommunications services activities shall comply with, in addition to these Provisions, the provisions of the Telecommunications Regulations and other related laws and administrative regulations.

Article 4 Foreign-funded telecommunications enterprises may engage in basic telecommunications services and value-added telecommunications services; categorisation of services shall be subject to the provisions of the Telecommunications Regulations.The geographical scope for business operations of foreign-funded telecommunications enterprises shall be determined by the competent industry and information technology department of the State Council pursuant to the relevant provisions.

Article 5 The registered capital of a foreign-funded telecommunications enterprise shall comply with the following provisions:

(I) the minimum amount of 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 or CNY10 million for any enterprise that provides value-added telecommunications services; and

(II) the minimum amount of 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 or CNY1 million for any enterprise that provides value-added telecommunications services.

Article 6 Unless otherwise stipulated by the State, the capital contribution ratio of the foreign investor(s) in a foreign-funded telecommunications enterprise operating basic telecommunications services (except for radio paging business) shall not exceed 49% ultimately.The proportion of capital contributed by the foreign investor (s) in a foreign-invested telecommunications enterprise that is engaged in the value-added telecommunications services (including the radio paging business as part of its basic telecommunications services) shall not exceed 50% ultimately, unless it is otherwise provided for by the State.

Article 7 Foreign-funded telecommunications enterprises engaging in telecommunications services shall satisfy, in addition to the criteria stipulated in Articles 4, Article 5 and Article 6 hereof, the requirements for engaging in basic telecommunications services or value-added telecommunications services as set out in the Telecommunications Regulations.

Article 8 The major Chinese investor of a foreign-funded telecommunications enterprise engaging in basic telecommunications services shall satisfy the following criteria:

(I) It shall be a company established pursuant to the law;

(II) It shall have capital and professional staff commensurate with its business activities to be engaged in; and

(III) It shall satisfy the requirements for prudence and specific industries stipulated by the competent industry and information technology department of the State Council.The term “major Chinese investor of a foreign-funded telecommunications enterprise” referred to in the preceding paragraph shall mean the contributor that makes the largest contribution amount among all Chinese investors and whose contribution amount accounts for 30% or more of the total contribution made by all Chinese investors.

Article 9 The major foreign investor of a foreign-funded telecommunications enterprise engaging in basic telecommunications services shall satisfy the following criteria:

(I) It shall have the corporate capacity;

(II) It shall have obtained a basic telecommunications services permit from the country or region where it is registered; and

(III) It shall have capital and professional staff commensurate with its business operations.The term “major foreign investor in a foreign-invested telecommunications enterprise” as used in the preceding paragraph shall be the investor that makes the largest contribution among all foreign investors and whose contribution amount accounts for 30% or more of the total contribution amount of all foreign investors.

Article 10 A foreign-funded telecommunications enterprise shall, after carrying out market entity registration pursuant to the law, apply to the industry and information technology department under the State Council for a telecommunications services operating permit and submit the following documents:

(I) investor information statement;

(II) qualifications of investors stipulated in Article 8 and Article 9 hereof; and

(III) proofs or other confirmation documents for other conditions required for engaging in basic telecommunications services or value-added telecommunications services as set out in the Telecommunications Regulations.The competent industry and information technology department of the State Council shall examine the relevant documents prescribed in the preceding paragraph upon the receipt of an application. If the application is for engaging in basic telecommunications services, the examination shall be completed within 180 days from the date of acceptance of the application and a decision on approval or non-approval shall be made; if the application is for engaging in value-added telecommunications services, the examination shall be completed within 60 days from the date of acceptance of the application and a decision on approval or non-approval shall be made. If the application is approved, a Telecommunications Service Permit shall be issued; if the application is not approved, the applicant shall be notified in writing and the reasons shall be explained.

Article 11 The investor information statement of a foreign-funded telecommunications enterprise shall mainly include: the names and basic information of the investors, the proportion of capital contributed by each party, and the control of the foreign investor (s) over the foreign-funded telecommunications enterprise, etc.

Article 12 A foreign-funded telecommunications enterprise engaging in cross-border telecommunications services shall obtain approval from the competent industry and information technology department of the State Council, and shall operate the said services through the International Telecommunications Gateway Bureau established with the approval of the competent industry and information technology department of the State Council.

Article 13 The competent industry and information technology department of the State Council shall order anyone who violates the Provisions of Article 6 hereof to make a correction within a stipulated period and impose a fine ranging from CNY100,000 to CNY500,000 on the offender; where the offender fails to make a correction within the stipulated period, its Telecommunications Service Permit shall be revoked.

Article 14 In the case of provision of false or forged qualification certificates or confirmation documents in an application for establishment of a foreign-funded telecommunications enterprise, the approval shall be invalidated, and the competent industry and information technology department of the State Council shall impose a fine ranging from CNY200,000 to CNY1 million on the offender, and revoke its Telecommunications Service Permit.

Article 15 A foreign-funded telecommunications enterprise which violates the provisions of the Telecommunications Regulations and other relevant laws and administrative regulations in the operation of telecommunications services shall be punished by the relevant authorities according to the law.

Article 16 These Provisions shall apply mutatis mutandis to companies and enterprises from Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan investing and operating telecommunications services in the Mainland China.

Article 17 These Provisions shall come into force as of January 1, 2002.