Order of the Ministry of Commerce
[2005] No. 5
The Measures for the Administration of Foreign-capital Lease Industry were
deliberated and adopted at the 1st executive meeting of the Ministry of Commerce
on January 21, 2005. They shall go into effect as of March 5, 2005.
Minister Bo Xilai
February 3, 2005
Article 1 For the purpose of promoting the sound development of
foreign-capital lease industry, regulating the business operations of
foreign-capital lease industry and preventing operating risks, these Measures
are formulated in accordance with the Contract Law of the People's Republic of
China, the Company Law of the People's Republic of China, the Law of the
People's Republic of China on Foreign-capital Enterprises, the Law of the
People's Republic of China on Chinese-foreign Equity Joint Ventures, the Law of
the People's Republic of China on Chinese-foreign Contractual Joint Ventures and
other relevant laws and regulations
Article 2 These Measures shall apply to the foreign-capital companies,
enterprises and other economic organizations (hereinafter referred to as the
foreign investors) that establish foreign-capital enterprises within the
territory of China in the forms of Chinese-foreign equity joint venture,
Chinese-foreign contractual joint venture and solely foreign-capital enterprise
to conduct leasing business or financial leasing business.
Article 3 The foreign-capital lease industry may take the form of a limited
liability company or a joint-stock limited company.
A foreign-capital enterprise undertaking leasing business is a
foreign-capital leasing company. A foreign-capital enterprise undertaking
financial leasing business is a foreign-capital financial leasing company.
Article 4 All foreign-capital leasing companies and foreign-capital financial
leasing companies shall abide by the relevant laws, regulations and rules of the
People's Republic of China. Their proper business activities and legitimate
rights and interests shall be protected by the Chinese law.
The Ministry of Commerce (hereinafter referred to as the MOFCOM) is the
administrative department in charge of the foreign-capital lease industry and
also the administrative department responsible for the examination and approval
thereof.
Article 5 The leasing business as mentioned in the present Measures refers to
the business that the lessor offers a lessee the use and proceeds of a leased
property in exchange for rent.
The financial leasing business as mentioned in the present Measures refers to
the business that the lessor purchases a leased property from a seller in light
of a lessee's selection of the seller or the leased property, then offers the
lessee the use thereof in exchange for rent.
The foreign-capital financial leasing company may undertake its financial
leasing business by adopting the various forms of direct lease, sublease,
leaseback, leveraged lease, trust lease and joint lease.
Article 6 The leased property as mentioned in the present Measures includes:
(1) various movable properties such as production equipment, communication
facility, medical device, scientific research equipment, inspection and testing
apparatus, engineering machinery and office equipment;
(2) various transport facilities such as planes, automobiles and vessels;
(3) intangible assets accompanying the movable properties and transport tools
as mentioned in Items (1) and (2) of this article such as software and
technologies, but the value of such intangible assets may not exceed 1/2 of that
of a leased property.
Article 7 The total foreign-invested assets of a foreign-capital leasing
company or foreign-capital financial leasing company may not be less than US $ 5
million.
Article 8 A foreign-capital leasing company shall meet the following
conditions:
(1) Its registered capital meets the relevant requirements of the Company
Law;
(2) It meets the relevant requirements for the registered capital and total
investment of a foreign-capital enterprise; and
(3) The operating period for a foreign-capital leasing company in the form of
limited liability company shall not exceed 30 years in general.
Article 9 A foreign-capital financial leasing company shall meet the
following conditions:
(1) It has a registered capital not less than US$ 10 million;
(2) The operating period for a foreign-capital leasing company in the form of
limited liability company shall not exceed 30 years in general; and
(3) It has the corresponding professionals. Its senior managerial personnel
shall have the corresponding professional qualifications and at least 3 years of
experience of practice.
Article 10 The following materials shall be submitted to the examination and
approval department for the establishment of a foreign-capital leasing company
or foreign-capital financial leasing company:
(1) A written application;
(2) A report of feasibility study affixed with the signatures of all
investors;
(3) The contract and articles of association (a foreign enterprise is only
required to submit the articles of association);
(4) The credit standing certification issued by a bank, registration
certification (photocopy) and identity certification (photocopy) of the legal
representative of each investor;
(For more biz stories, please visit Industry Updates)
