Anyone wanting to set up a foreign-backed enterprise needs to go through a registration and approval system in accordance with Chinese law, with the approval depending on the amount of investment, and the type of project as specified in the catalogue for the Guidance of Industries for Foreign Investment.

The catalogue states that the provincial economic cooperation department is responsible for the establishment or alteration of a company by a foreign-funded enterprise, and that an investment of $300 million or less puts it in the "encouraged" and "permitted" category, while an investment of $50 million puts it in the "restricted" category.

The amount of investment is to the same as the registered capital of a foreign-invested joint stock enterprise, or the net assessed assets of a restructured one, or the volume of transactions for a Chinese enterprise acquired by or merged with a foreign investor.